H2 Green Steel secures support for €3.5bn debt financing to build its hydrogen-powered plant
Summary
Once finalised, it would make the company one of the best capitalised climate tech projects in Europe.On Monday, the company said it had signed conditional senior debt agreements with commercial banks BNP Paribas, ING, UniCredit, Societe Generale and KfW IPEX-Bank, as well as the Swedish Export Credit Corporation. The agreements are worth a combined 3.3bn.It also has board approval from the European Investment Bank for a further 750m in senior debt funding and a letter of intent for a 500m junior debt facility from a Nordic infrastructure fund. The total cost of the plant is 5bn, with the remaining funding coming from equity raises which it hopes to complete next year, it told Sifted.H2 Green Steel replaces coking coal which is used in furnaces to produce steel with renewable energy and hydrogen. Steel production using coal accounts for around 8% of global greenhouse gas emissions, according to McKinsey.Steelmaking is an industry in which the challenge of decarbonisation is particularly difficult. The latest debt injection means the company has a similar level of capital to Northvolt, Europes best-funded climate startup, which has raised $5.5bn from investors.Henrik Henriksson, CEO of H2 Green Steel, says the deal underlines the business case of the company, its debt carrying capacity and the willingness of banks and credit agencies to support climate initiatives.The company also announced last week that it had raised 260m in equity, from investors including Kinnevik, Hitachi Energy and Kobe Steel.Freya Pratty is a reporter at Sifted.