Swedish green steel company Stegra is seeking another $1.1 billion financing

Stegra, a Swedish green steel startup, plans to raise an additional 975 million euro ($1.1 billion) for building its plant in the north of Sweden and bolstering finances.

Stegra (formerly H2 Green Steel) announced last year that it had secured funding of 6.5 billion euro for the plant in Boden, which will be using hydrogen produced on site from renewable electricity to power its production process.

Henrik Henriksson, CEO of Stegra, said that the new round of financing was to cover higher project costs as well as offset state grants on which Stegra relied but could not secure. He added that the funds would also increase the group's buffers.

In an email, he stated that "we already have initial equity committments from both the founders and leading investors."

Sweden is leading Europe in its efforts to switch from fossil fuels to carbon-free energy. The green transition in Sweden has been hampered by the bankruptcy of Northvolt, a battery manufacturer.

The transition to green hydrogen may be prohibitively costly for industries that are hard to electrify, like steelmaking and long distance transportation.

Stegra's spokesperson confirmed that the new funding would consist of a mixture of equity, debt, and strategic partnerships. The amount would also be added to the previously-announced 6.5 billion euro.

She said, "We are confident that we will be able to complete the factory and increase the volume."

Stegra stated in a press release that it has advanced discussions regarding outsourcing. Reporting by Anna Ringstrom, Editing by Terje Sollsvik and Joe Bavier

(source: Reuters)