Stegra, a Swedish company focused on decarbonising heavy industries, opens a new financing round to support its green-steel project in Boden.
Stockholm-based Stegra, a company accelerating the decarbonisation of hard-to-abate industries, has opened a new financing round to advance the construction of the world's first large-scale green-steel plant in Boden, Sweden.
The company, reportedly, plans to raise up to €975M to support its northern Sweden plant and strengthen its finances. The round follows commitments from existing investors.
Henrik Henriksson, CEO of Stegra, says, "The strong backing from our founders and lead investors, who are firmly committed to this project, is another testament to Stegra's strong business case. Stegra has a unique position in the green steel landscape with a strong order book, a competitive cost position, and proven execution capabilities."
The round is expected to contribute about 15 per cent of the project's total funding. It will include a mix of equity, debt, outsourcing, and strategic partnerships. Stegra is in talks with partners on outsourcing arrangements.
Henriksson adds, "We have progressed more than 60 per cent of the project and have clear visibility and a detailed plan for the full runway up to completion, including a timeline extension of three months to accommodate for the additional scope. We will now continue to advance the project with the additional strength that will be provided by this new financing round."
The round aims to fund the insourcing of certain infrastructure, cover increased project costs, maintain a financial buffer, and compensate for state grants that have not been disbursed despite EU Commission approval.
Funds from the new financing round will be used for the insourcing of railway and port infrastructure that were initially planned for external funding. These assets will now be developed and operated by Stegra to maintain direct oversight and control of the project.
Capital will also be applied to additional groundwork, material costs, construction activities, and installation work.
Stegra is facing a major funding gap of up to €1.5B, a threefold increase over the past three months, reports Financial Times. The shortfall comes amid cost overruns, construction delays, and the decision to bring key infrastructure in-house, including a railway and port near its Boden plant.
The company is burning through around €280M a month and could exhaust existing funds in less than two months without new financing.
Stegra secured up to €6.5B to develop the plant from major industrial investors, including Mercedes-Benz, Siemens, Scania, and sovereign wealth fund GIC. Some banks, including Citigroup, have expressed concern over the company's future and placed it in a "work out group." However, Just Climate, a major Stegra shareholder, says it remains "fully supportive" of the company.
According to the Financial Times, Stegra's funding has been complicated by the Swedish government's refusal to release a €150M grant that had EU approval. The company has also had conflicts with the government after raising concerns about delays from state-owned companies that impacted its expansion, electricity supply, and access to iron ore.
Despite the challenges, Stegra's executives have maintained that the company has strong customer demand, a proven business model, and ongoing support from major investors.
Founded in 2020, Stegra (formerly known as H2 Green Steel) was established to decarbonise hard-to-abate industries.
The company is developing an integrated plant in Boden, Sweden, to produce green hydrogen, green iron, and green steel. The facility aims to reduce emissions through the use of renewable electricity and hydrogen-based processes.
Stegra's work targets sectors that are difficult to decarbonise due to their dependence on fossil fuels. These industries, which include steelmaking, are central to global production but contribute significantly to carbon emissions. By focusing on steel, Stegra seeks to demonstrate that large-scale industrial transformation is achievable.
The company's first plant in Boden is under construction, with production of green steel planned to begin in 2026. The process is expected to reduce emissions by up to 95 per cent compared to conventional steel production. Stegra also intends to expand its approach to other industrial sectors in the future.
Stegra employs teams across its sites in Boden and Stockholm and plans to reach about 1,500 employees by the end of 2025.
The company positions its work as part of a broader shift toward low-carbon industrial production, using hydrogen and renewable energy to replace fossil-based methods. It views this transition as a necessary step for the global economy and a model for other industries to follow.