H2 Green Steel has received $189.4m in a funding round to enable the construction of a fossil fuel-free steel plant in Boden, Northern Sweden.

The fundraising was co-led by new investors GIC, AMF and Schaeffler, who were joined by existing investor Altor Fund V.

Other participants in the equity funding round include Swedbank Robur Alternative Equity, and existing shareholders Vargas, Kingspan, FAM, Marcegaglia, IMAS Foundation, Cristina Stenbeck and Daniel Ek.

H2 Green Steel plans to produce steel through a green hydrogen-powered plant in Boden in Northern Sweden.

“This financing milestone is a real statement of confidence in H2 Green Steel.''

Henrik Henriksson, H2 Green Steel CEO

H2 Green Steel CEO Henrik Henriksson said: “This financing milestone is a real statement of confidence in H2 Green Steel. Despite the uncertainty in global markets, a venture like ours, with both a strong business case and a strong sustainable purpose, is clearly attractive to investors.

“This financing round has allowed us to combine leading industrial companies and global financial institutions, with investors with a strong Swedish participation, creating the investor-base that will set us up for success.”

The Swedish green impact company aims to have an annual green steel production capacity of 5Mt by the end of this decade.

It has already committed to about 60% of its initial volumes from the proposed steel plant to customers in sectors including steel service centres, pipe and tube, passenger vehicles and heavy commercial vehicles.

Scheduled to start production as early as 2025, the fully integrated, digitalised and circular plant is expected to reduce 95% of CO₂ emissions compared to traditional steelmaking.