SSAB, a Nordic and US-based steel company that claims it ‘builds a stronger, lighter and more sustainable world through value added steel products and services, has secured EUR 2.3 billion of green financing for a transformation project to build a state-of-the-art fossil-free mini-mill in Luleå, Sweden.
The transformation project, claims SSAB, is key to enable the company to re-position its European business as a maker of premium products, to lower production costs, and to reduce CO2 emissions from operations. The financing package is covered by the Swedish National Debt Office (Riksgälden), the Italian Export Credit Agency (SACE) and the Nordic Investment Bank. Crédit Agricole CIB structured the transaction.
SSAB decided on the EUR 4.5 billion investment in its new steel mill in Luleå during 2024 and has now signed three green loan facilities all of which have a long-term maturity structured to support the full lifecycle of the project.
The loans are structured under the Green Loan Principles, in line with SSAB’s Green and Sustainability-linked Finance Framework.
“The investment in Luleå will enable us to build an even stronger and more competitive SSAB by reducing costs, accelerating the product mix improvement and virtually eliminating all CO2 emissions from Luleå production.”
Leena Craelius, chief financial officer, SSAB
“The great interest to participate in the financing underscores SSAB’s leading position in the steel industry, as well as our partners’ strong confidence in our transformation plan. We managed to secure favourable terms and the package gives us the financial flexibility we need for robust implementation of the transformation, in line with our financial targets. The investment in Luleå will enable us to build an even stronger and more competitive SSAB by reducing costs, accelerating the product mix improvement and virtually eliminating all CO2 emissions from Luleå production,” highlights Leena Craelius, chief financial officer of SSAB.
Crédit Agricole CIB has been acting as the global co-ordinator, Structuring Bank, and green loan co-ordinator for the financing package.
According to SSAB, the new mill will have a capacity of 2.5Mt/yr with two electric arc furnaces, advanced ladle metallurgy and an integrated rolling mill. The investment also includes a cold rolling complex, advanced galvanizing and continuous annealing and is key to the re-positioning of SSAB Europe as a maker of premium products.
Lower costs, shorter lead times, as well as a better ability to manage swings in demand are other advantages. The new steel mill will be able to use a flexible mix of fossil-free sponge iron, pig iron and recycled scrap.
When the new mini-mill is completed, SSAB plans to close the current blast furnace-based production system in Luleå, which will largely remove the CO2 emissions from existing operations. The reduction corresponds to 7% of Sweden’s current CO2 emissions, the company claims.
“We are proud to support SSAB in their transformative journey towards more sustainable production practices.”
André Gazal, global head of ECA and multi-laterial financing solutions, Credit Agricole CIB.
“We are proud to support SSAB in their transformative journey towards more sustainable production practices. Our commitment to strengthening their transformation strategy reflects not only our dedication to sustainability but also our expertise in providing tailored financing solutions,” says AndréGazal, Global Head of ECA & Multilateral Financing Solutions, Crédit Agricole CIB.