Europe's key industrial decarbonisation initiative receives a boost.

      Stegra, previously known as H2 Green Steel, has reached a preliminary agreement on new financing amounting to €1.4 billion ($1.65 billion), facilitated by a consortium led by Wallenberg Investments that includes Temasek and IMAS. The construction of the Boden plant had faced delays during the fundraising efforts. With this agreement, the Wallenberg family will become the largest shareholder in the company.

      Stegra, the Swedish green steel firm formerly identified as H2 Green Steel, has agreed in principle to a financing deal aimed at completing the construction of the world’s first large-scale green steel facility, located in Boden, northern Sweden. This funding round is spearheaded by a consortium formed by Wallenberg Investments, alongside Singapore’s Temasek and the IMAS Foundation.

      The Wallenberg family intends to contribute €250 million and will become Stegra's largest shareholder upon the deal's closing, while existing investor Altor will hold the position of the second-largest owner. Current shareholders Hy24 and Just Climate are also participating in this round. Both senior and junior lenders have offered their support, pending credit approvals.

      This announcement brings relief after a prolonged period of financial uncertainty surrounding a crucial industrial decarbonization initiative in Europe. The construction at the Boden facility had significantly slowed during the fundraising phase. Stegra indicated that it will now accelerate preparations, though the project schedule is being reassessed. The plant initially aimed for operational status by the end of 2025, but that timeline has already lapsed. Principal agreements are expected to be signed by the end of April, with the financing round's closing set for June 2026.

      Leif Johansson, an advisor for the Wallenberg-led consortium and a notable figure in Sweden's industrial sector, highlighted both confidence and caution in the investment. He stated, “We believe in Stegra's competitiveness and the commercial appeal of green steel, alongside its climate advantages, while remaining aware of the challenges ahead. We deem this project vital for Sweden's industrial standing.”

      After the financing is finalized, Johansson is anticipated to take over as Chair of the Board from Shaun Kingsbury. Additionally, Håkan Buskhe of Wallenberg Investments and Altor's Managing Partner Paal Weberg are expected to join the board. Johansson and Buskhe have already assumed roles as board observers.

      The involvement of the Wallenberg family brings more than just capital. According to a source familiar with the matter quoted by Swedish business daily Dagens Industri, “This should be viewed as more than an investment; the entry of the Wallenbergs signifies that Stegra will join the top tier of Swedish industry and will not face bankruptcy.” Historically, the family’s investment group has been known for its commitment and patience in the Scandinavian industrial sector, holding long-term stakes in companies like Ericsson, Saab, SKF, and Electrolux.

      Since its Series A round of €86 million in 2021, Stegra has raised over €2.1 billion in equity, with subsequent funding rounds including a Series B1 of €260 million in 2022, a €1.5 billion round in 2023—the largest private placement in Europe that year—and an additional €300 million along with over €4 billion in debt financing in 2024. The plant has also benefitted from a €250 million grant from the EU’s Innovation Fund. Its production process utilizes green hydrogen generated through electrolysis powered by renewable energy, replacing coking coal in steel production and achieving up to a 95% reduction in CO₂ emissions compared to traditional blast furnace methods.

      Steel production contributes approximately 7–8% of global CO₂ emissions and has historically been one of the most challenging sectors to decarbonize. The project has been overshadowed by Northvolt, the Swedish battery manufacturer that once shared early investors through Vargas Holding and declared bankruptcy in late 2025, which has compounded challenges during Stegra's fundraising efforts. Reports indicated that lenders, including Citigroup, were considering halting loans due to concerns regarding Stegra's future.

      The Wallenberg-led financing package seems to have addressed the immediate concerns, and CEO Henrik Henriksson remarked that securing this round involved considerable effort from all parties in what he described as a “very challenging macro-environment.”