H2 Green Steel has received €190m ($189.4m) in a Series B funding round from a selected group of investors to enable the construction of a fossil fuel-free steel plant in 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.

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.”

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The Swedish green impact company aims to have an annual green steel production capacity of five million tonnes 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.

Swedbank Robur alternative investments head Henrik Lundh said: “By investing in H2 Green Steel, we support an efficient production of green hydrogen and green steel and thereby support a cost-competitive decarbonised industry development.

“The company’s ambition to take a driving role in the European green hydrogen transformation to decarbonise hard-to-abate industries is well aligned with our mission to support disruptive, transformational companies with strong management and customer propositions, and long-term sustainable competitive advantage.”