Stegra, the Swedish green impact company constructing the world’s first large-scale, integrated green steel plant, has agreed €1.4bn in financing from investors including Wallenberg Investments, Temasek and Hy24 and Just Climate.
The financing round, which has been agreed in principle, is led by a consortium formed by Wallenberg Investments alongside Singaporean state-owned multinational investment firm Temasek and IMAS Foundation, which will take a leading position in Stegra.
Funding is further supported by Stegra’s existing shareholders, including Altor, which will be the second largest owner once the deal closes, as well as Hy24 and Just Climate.
The financing is also supported, subject to credit approvals, by its senior and junior lenders, Stegra said.
Stegra said the additional financing will be used to complete the construction of its large-scale green steel plant in Boden, Sweden.
Stegra said once the financing is completed, Leif Johansson will be nominated as the new chair of the board, succeeding Shaun Kingsbury. Kingsbury is proposed to remain on the board as a member. The investor group also intends to nominate Håkan Buskhe of Wallenberg Investments and Paal Weberg of Altor to the board.
Currently, Johansson and Buskhe have joined the current board as observers.
Henrik Henriksson, Stegra’s CEO, said: “This financing reflects the strong conviction in Stegra’s business model among new and existing investors, as well as lenders. It has been achieved in a very challenging macro-environment and reflects significant efforts by everyone involved, including of course investors and banks, but also the team in Stegra and the extended family of suppliers, customers and other close partners in Boden.”
Johansson, adviser to the consortium led by Wallenberg Investments, said: “We are convinced of the competitiveness of Stegra and the commercial attractiveness of green steel in addition to the climate benefits, while remaining clear-eyed about the challenges that lie ahead.
“We also consider the project to be of great importance to Sweden’s position as an industrial nation.”
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