Stegra Lands 1.4 Billion Euros From a Wallenberg-Led Consortium to Finish the World's First Large-Scale Green Steel Plant
The Swedish startup secured 1.4 billion euros to complete its hydrogen-based Boden plant, a rare bright spot as other European green steel projects stall.
Editor's Note ·
- Clarification:
- Three of this article's six cited sources are not on The Machine Herald source allowlist: stegra.com (the company's own press release and plant/Mercedes-Benz pages), eurometal.net (the trade publication EUROMETAL), and realassets.ipe.com (IPE Real Assets). The article's load-bearing facts — the EUR 1.4 billion (about $1.65 billion) figure and Wallenberg Investments as the lead investor — were verified against and corroborated across these sources together with the PR Newswire-distributed Stegra release, so the off-allowlist status does not undermine the article's accuracy. This note is filed for transparency under the corrections trail.
Overview
Swedish green steel startup Stegra has agreed in principle on 1.4 billion euros in new financing from a combination of new and existing investors, according to the company’s press release. The money is earmarked to complete construction of its large-scale green steel plant in Boden, Sweden, a project the company is building to make steel using hydrogen instead of coking coal.
The round is led by Wallenberg Investments, the investment vehicle of one of Sweden’s most prominent industrial families. According to Stegra, Wallenberg Investments has formed a consortium that will take a leading position in the company; alongside it, the consortium consists of Temasek and IMAS. Trade publication EUROMETAL put the figure at 1.4 billion euros, or 1.65 billion dollars.
What We Know
The financing arrives as a reprieve for a project that had slipped behind schedule. First steel production was initially expected this year, but the company previously confirmed a temporary construction break late last year, EUROMETAL reported. The new capital, subject to credit approvals, will enable the completion and commissioning of the Boden plant, according to the same report.
Stegra said the added financing of 1.4 billion euros will be used to complete the construction of the plant in Boden, including previously communicated scope expansions such as the insourcing of selected infrastructure components, coverage of increased project costs, and the establishment of a prudent financial buffer, per the company’s announcement. Funding is further supported by Stegra’s existing shareholders, including Altor, which will become the second-largest owner after closing, as well as Hy24 and Just Climate.
The deal carries a timeline. Stegra expects signing of the principal agreements at the end of April, with closing of the financing round occurring during June 2026, the company said.
It also reshuffles the board. Investors intend to nominate Leif Johansson as the new chair of the board, succeeding Shaun Kingsbury, who chaired the board while the company worked through the financing round, according to Stegra. IPE Real Assets reported that Kingsbury is proposed to remain on the board as a member, and that the investor group also intends to nominate Håkan Buskhe of Wallenberg Investments and Paal Weberg of Altor to the board.
“This financing reflects the strong conviction in Stegra’s business model among new and existing investors, as well as lenders,” Chief Executive Henrik Henriksson said, according to IPE Real Assets.
The Plant
The Boden facility is designed around green hydrogen rather than the coal-based blast furnaces that dominate steelmaking. By 2030, the company says it will be producing 5 million tonnes of green steel annually, drawing on a 700-megawatt hydrogen plant that makes hydrogen from water and renewable electricity, according to Stegra’s plant page. The hydrogen feeds a direct reduction process that strips oxygen from iron ore, and the company says the approach can cut CO2 emissions by up to 95 percent compared to traditional steelmaking.
Demand for that output has been lined up in advance. Stegra, formerly known as H2 Green Steel, struck a binding agreement with Mercedes-Benz covering volumes of about 50,000 tonnes per year to be produced at the Boden plant, according to a company announcement.
Against the Grain
The financing stands out because much of Europe’s green steel ambition has stalled. ArcelorMittal canceled the construction of direct reduced iron modules even with government funding, according to EUROMETAL. Thyssenkrupp put a hydrogen tender for its green steel plant on hold due to elevated prices but said it remains committed to the Duisburg site’s green transformation, the same publication reported. And SSAB postponed the start date for its green project from the end of 2028 to the end of 2029 because of technical challenges, notably delays in the modernization of the national power grid that will supply electricity to the facility, EUROMETAL reported.
Against that backdrop, Stegra’s raise keeps one of the few remaining large-scale European green steel projects on track toward completion.
What We Don’t Know
The announcement is an agreement in principle, and Stegra noted the financing remains subject to credit approvals. A precise date for first steel production was not given beyond the company’s previously stated 2030 target for full annual capacity, and the announcement did not detail how much steel the plant will produce in its initial ramp-up. The closing of the round, slated for June 2026, will determine when construction can fully accelerate again.