Hy24’s investment in Stegra was awarded the Market Impact of the Year in Europe, with judges saying it was the clear winner.  

H2 Green Steel, what the company was known as before the rebranding to Stegra, is a first-of-a-kind project in sustainable manufacturing, setting a new standard for the steel industry. 

With €6.6 billion in financing secured – €4.2 billion ($4.5bn) in debt and €2.4 billion in equity – Stegra is constructing the world’s first large-scale real green steel plant. 

By 2026, it will produce 2.5 million tonnes of green steel annually, with a path to double output by 2030. 

As lead investor in Stegra’s €1.5 billion equity private placement, the largest in Europe in 2023, Hy24 became a reference shareholder alongside Altor, GIC and Just Climate. 

The submission said: “Leveraging our position, Hy24 negotiated pivotal key terms, such as structured tiered investment tranches that aligned capital deployment with project milestones, ensuring a phased approach, and mechanisms like investor guarantees and performance-linked equity disbursements. These terms, negotiated by Hy24 as the only new lead investor, attracted a wave of additional new investors and advanced the construction of H2 Green Steel’s groundbreaking steel plant in Boden, Sweden. 

“Hy24 actively supported H2 Green Steel in the bookkeeping process for equity fundraising and introduced the company to several investors. Hy24’s investment was made through a dedicated, flexible structure that successfully accommodated the late entry of Demeter’s Climate Infrastructure Fund into the investment round. This adaptability was crucial in meeting the tight timelines set by lenders. 

“This substantial equity funding package laid the groundwork for the subsequent debt signing. One of the biggest hurdles H2 Green Steel faced was the nascent stage of green hydrogen technology, combined with the high upfront capital costs of steel production. These factors necessitated an innovative approach to attract lenders. As managing hydrogen-focused funds, Hy24 brought experience from other portfolio companies to the table by discussing concrete steps to make the project bankable.” 

One judge said: “This transaction is a clear winner in this category by a large margin in terms of innovation and market impact.” 

Another member of the judging panel said: “Really interesting transaction moving the dial for sustainable manufacturing and with the potential to transform the steel industry.” 

Indeed as the submission put it: “The successful closure of H2GS’s financing amidst market challenges, technological uncertainties and extensive investment cycles underscores the company’s leadership. H2GS overcame barriers through proactive stakeholder engagement, strategic negotiation of state-backed guarantees, and assembling a broad and committed investor base. This achievement not only sets a precedent for green steel but also establishes a replicable model for industrial decarbonization that serves as a blueprint for the sector.” 

The 20 banks on the debt include: 

• BNP Paribas
• ING
• KfW IPEX-Bank
• Societe Generale
• UniCredit
• BayernLB
• KommunalKredit
• Svensk Exportkredit (state-owned)
• European Investment Bank (state-owned) 

Advisers: 

• Societe Generale – financial
• KfW IPEX-Bank – financial
• Morgan Stanley – equity
• A&O Shearman – legal
• Clifford Chance – legal
• Milbank – legal
• Mannheimer Swartling – legal
• WSP – consulting
• Aurora Energy Research – consulting