Stockholm: The low-carbon Swedish steel startup Stegra, which has been struggling to secure financing, said Tuesday that it had raised 1.4 billion euros ($1.6 billion) from private investors to complete a "green" steel mill.
The company is building the mill, which it says will use technology that emits 95 percent less CO2 than traditional methods, in the city of Boden in Sweden's far north.
"Stegra has agreed in principle on 1.4 billion euros in new financing from a combination of new and existing investors to complete the construction of its large-scale green steel plant," the company said in a statement.
It said financing was led by the Swedish investment group Wallenberg Investments, "which has formed a consortium of investors that will, through this transaction, take a leading position in Stegra".
Wallenberg Investments, owned by the influential Wallenberg family, said in a separate statement that it was investing 250 million euros in Stegra.
The state-owned Singaporean fund Temasek is also part of the consortium round, along with IMAS, which oversees the Ingka holding company that controls most Ikea furniture stores.
In October, Stegra had announced a round of financing to bring in an additional 10 billion kronor ($1.1 billion) to cover higher project costs.
And in November the company got around $40 million in state aid from the Swedish Energy Agency, as uncertainty swirled about the startup's prospects.
The situation garnered comparisons with the battery maker Northvolt, another former leader of Sweden's green industrial boom.
Northvolt was seen as a cornerstone in European efforts to catch up with Chinese battery producers before production delays and its mounting debts led it to declare bankruptcy in March 2025.
'Challenging macro-environment'
"This financing reflects the strong conviction in Stegra's business model among new and existing investors, as well as lenders," Stegra's chief executive Henrik Henriksson said.
"It has been achieved in a very challenging macro-environment and reflects significant efforts by everyone involved," he added in the statement.
The company added that "after several slower months during the funding activities, Stegra will now ramp up construction activities".
The new mill is expected to be completed within 18 to 24 months, Henriksson later told a press conference, adding however that it was not possible to "talk about a specific date" for a start in production.
"We believe that this is a really good and sound investment," said Leif Johansson, an adviser to the Wallenberg group who will take over as chairman of Stegra's board.
"Both from a climate perspective and from the standpoint of being able to build a profitable steel plant," Johansson told reporters.
Johansson is a veteran of Swedish industry who notably headed the truckmaker Volvo Group.
When it first disclosed plans for a new plant in 2021, it was called H2 Green Steel.
It aimed to start production in 2024 and reach an annual output of five million tonnes of steel -- more than all of Sweden's current annual output -- by 2030.
Behind Stegra is the investment firm Vargas Holding, which was also a co-founder of Northvolt.
