Stegra secures $1.4bn package to finish flagship hydrogen-based steel plant

Stegra has agreed in principle on a $1.4bn rescue package led by a major Swedish investment firm to complete its hydrogen-based green steel plant in Boden, Sweden.

The new capital, which is subject to lender credit approvals, will be used to complete the company’s flagship project, which exhausted prior funding.

Stegra said it will now “ramp up” construction activities at the plant, although the overall timeline is still being reassessed.

The company also plans to bring some previously outsourced construction work in-house while de-risking the project through added financial headroom and a stronger equity base.

The steel plant was due to begin operations in 2026 before ramping up to produce five million tonnes of green steel per year by 2030. It will use green hydrogen produced by a 700MW electrolyser system to convert iron ore into direct reduced iron (DRI) to feed steel production.

The refinancing is prompted by the project’s failure to reach completion using an initial $7.15bn development funding package, a second $1.07bn funding round, and $296m in EU commission grants.

Central asset management company Wallenberg Investment led the financing round, which saw participation from existing and new Stegra investors.

Henrik Henriksson, CEO of Stegra, said the financing represents strong confidence in the company’s business model amidst a challenging project environment.

“The investors will bring additional significant industrial expertise, and their investment reinforces Stegra’s position and the project’s Swedish anchoring,” he added.

Proceeding the funding round’s completion, Stegra investors intend to install Swedish businessman, Leif Johnansson, as the new Chair of the Board.

It underscores the capital intensity of developing a greenfield steel project using new technologies. Stegra is retaining responsibility for the project’s green hydrogen plant, DRI, electric arc furnace, and steel processing.

Various European steelmakers have delayed or shelved plans for green hydrogen-based operations due to high costs associated with the molecule.

Analysis by the steel decarbonisation lobby group SteelWatch in 2025 said importing green hydrogen-based DRI from renewables-rich countries to  could avoid costs for shipping and hydrogen.