Stegra Near Bankruptcy – “Swedish Solution” Could Mean Rescue with New Taxpayer Money

Economic collapse threatens the heavily criticized green steel project Stegra in Boden. After an acute liquidity crisis around New Year, a lifeline is now reportedly on the table: short-term loans intended to buy time until a new major owner can hopefully step in. Meanwhile, Dagens Industri reports on a “Swedish solution,” where a major Swedish investor – and the state – could once again become decisive. Stegra has already been plagued by delays, cost overruns, criticism of its calculations, and several high-profile government crackdowns targeting labor market crime.

The construction of Stegra’s steel plant – with a hydrogen factory, iron sponge production and steelworks – has been described as Europe’s first new steel mill in half a century. But financing has become the project’s Achilles’ heel. According to reports to DN, this autumn’s fruitless attempts to close the gap came to a head over New Year, when Stegra was said to be unable to secure funding.

“It was very close to the end. It looked damn bleak,” a source tells DN.

The solution now reportedly under discussion is based on temporary loans pending a new major owner who can inject equity capital. No names have been mentioned as to who might be willing to take such significant risks with their money.

“It’s about a limited period to clear the field for the new investor,” promises the source DN spoke to.

DI: “Swedish solution” = investor + state in the same package

At the same time, DI reports that “at least one major Swedish investor” is ready to step in – and that the Swedish state is also prepared to actively support the process, with an additional undisclosed sum of taxpayer money. Who these other investors might be remains unanswered or is kept secret even by DI.

In investment circles, this approach is dubbed the “Swedish solution.” Critics call it a case where investors take the profit and taxpayers bear the losses – venture capitalism without risk. The National Debt Office is identified as part of the plan, but how big the state’s (read: taxpayer’s) part will be is unclear.

This ties into the fact that Stegra already includes government risk in its structure: the National Debt Office has issued extensive green credit guarantees (usually able to cover up to 80 percent of a loan).

The Funding Gap: Billion-Krona Hole, Costlier Infrastructure, and a Burning Cash Pile

Stegra’s problems are not new. The Financial Times reported last autumn that the funding needs to complete the plant and related infrastructure had risen sharply – and that insolvency had been discussed at board level. The paper cited cost overruns, delays and unexpected infrastructure commitments such as railway/harbor as contributing factors.

Stegra itself has communicated that the company is in a new financing round, combining new equity with other components such as debt financing, outsourcing, and partnerships.

Government Support – and Disputes Over Transparency

In addition to guarantees, Stegra has also been granted substantial public support through Industriklivet. The Energy Agency confirms previous support of 1.2 billion kronor in taxpayer funding, as well as a new decision for about 390 million kronor, and that the company, in a modified application, has also applied for an additional 1.6 billion kronor.

At the same time, there has been criticism about whether the government approach and risk conditions are in line with guidelines – including in a noted Affärsvärlden commentary about the National Debt Office’s role and the structure around Stegra.

Government Operations and Deportations at the Construction Site

Stegra’s construction has also come into focus for recurring government inspections related to labor market crime. In November 2025, over 100 immigration checks were carried out, with 19 people found to lack the right to work or stay in Sweden, according to police sources cited in the media.

After the raid, SVT reported that Stegra halted work for 280 people as a result of stricter controls, and that police decided to deport 32 individuals in connection with the operation.

The Northvolt Ghost: Same Circle, Same Risk Profile

Comparisons with Northvolt have followed Stegra. Northvolt was declared bankrupt on March 12, 2025, according to the Enforcement Authority, and the bankruptcy trustee has subsequently wound down battery cell production step by step.

Several observers have pointed out that Stegra and Northvolt operate in the same Swedish “green” financing and guarantee logic, where large societal ambitions are combined with massive capital needs and high execution risk.