The green steel giant project in Boden is in an acute financial situation. According to information provided to Bloomberg, Stegra risks running out of money within a few weeks as the hunt for new capital intensifies. Behind the crisis lies a project that has become more expensive than planned, inaccessible bank loans, and financing that has long been criticized as resting on over-optimistic assumptions.

The Swedish industrial company Stegra is reportedly in a critical position. Its cash reserves could dry up within just a couple of weeks if the company fails to secure new funding for its massive steel plant construction in Boden. This information, reported by Bloomberg, has been echoed in several Swedish media outlets, including NSD and Affärsvärlden.

The company is now seeking to raise the equivalent of just over ten billion kronor in new capital. Some investors have reportedly already committed, but the amount is still insufficient to cover the entire need.

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At the same time, Stegra formally has credit lines from banks amounting to over forty billion kronor. The problem is that the money cannot be fully used, as the company has not yet fulfilled the conditions and milestones required for the loans to be disbursed. Negotiations with the banks are therefore proceeding in parallel with the capital hunt.

Soaring costs

Stegra – formerly known as H2 Green Steel – is building one of Europe’s largest industrial projects: a fossil-free steel plant in northern Sweden that aims to produce steel using hydrogen and renewable electricity.

The project has attracted investors from all over the world and was long touted as a flagship for the green industrial transition. But the venture is also extremely capital-intensive and has been hit by delays and rising costs. Its previously strong image has also taken a hit from scandals involving illegal labor.

This autumn, it became clear that the company would need an additional ten billion kronor or so to complete the facility, while the production start has once again been postponed, now to the earliest in 2027.

The financing structure is a complex mix of equity, loans, and public support. A significant portion of the loans are also conditional – lenders require owners to inject more capital before funds are disbursed.

This means the project’s financing is linked together like dominoes – if one piece falls, the entire structure is at risk.

State, investors and banks in negotiations

Since autumn, Stegra has therefore been engaged in intense talks with investors, banks and public stakeholders.

There have also been reports that the Swedish state has been involved in discussions on how the project could secure its financing. At the same time, major investors – including Swedish financial families – are reportedly working to come up with the missing capital.

The company itself has said little about the current situation, referring instead to the fact that the financing round is still ongoing. Management has previously stated that it expects to find a solution within the first quarter of the year.

One of Sweden’s largest industrial projects

Stegra’s facility in Boden is often described as one of the largest industrial investments in modern Swedish history. The goal is to produce up to 2.5 million tons of fossil-free steel per year, thereby significantly reducing emissions from the traditionally carbon-intensive steel industry.

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But the green technology requires enormous investments in power production, hydrogen plants, and new infrastructure – something that has made the project both technically and financially risky. There are also questions as to whether the steel, once it is produced, will be saleable.

Tens of billions – but no steel yet

As construction timelines have slipped and costs have increased, criticism has also grown. Analysts and industry experts have warned that the project’s financial calculations are sensitive to everything from electricity prices to developments in the steel market. Meanwhile, capital continues to drain away.

So far, tens of billions of kronor have been invested in the project – but Stegra has yet to produce a single gram of steel.