Supporting the world's first large-scale green steel plant with a groundbreaking water treatment facility
Stegra and John Laing have entered a Private-to-Private Partnership (PtPP) to create a Water Treatment Plant (WTP) for Stegra's industrial site in Boden, Sweden. The WTP will support the world's first large-scale green steel plant, reducing CO2 emissions by up to 95% and treating wastewater.
The hard-to-abate industries, such as steel, are facing significant challenges in the transition to a low-carbon economy. These industries are characterised by their high levels of CO2 emissions and the difficulty in reducing them due to the nature of their operations. Among the strategies to mitigate environmental impact, water treatment services stand out as a crucial element. These services aim to reduce water consumption and minimize the release of pollutants, contributing to the sustainability of these industries.
In this context, the Private-to-Private Partnership between Stegra, previously known as H2 Green Steel, and John Laing, a leading international investor and active manager of core infrastructure assets, to provide critical water treatment services to Stegra’s flagship industrial site in Boden, Sweden, marks a significant step forward.
This partnership will result in the design, construction, financing, operations, and maintenance of a Water Treatment Plant (WTP), a critical ancillary infrastructure required to operate what will be the world’s first large-scale green steel plant. The WTP, whose technology solution and service are undertaken by Aquatech, will supply demineralised water to the electrolysers used to create green hydrogen and purified water used in system cooling. It will also treat wastewater from the steel mill, returning 99.9% of the process water back to the system.
By replacing coal with green hydrogen powered by fossil-free electricity, the project will produce steel with up to 95% lower CO₂ emissions compared to steel made with traditional coke-fired blast furnaces. The plant will produce two and a half million tons of green steel annually in Boden initially, with a ramp-up to five million tons by 2030. The project includes the world’s first large-scale green integrated steel plant, DRI tower and mini mill, as well as Europe’s first giga-scale electrolyzer.
The financing of this Water Treatment Plant, structured as Green Loan Financing in alignment with the LMA Green Loan Principles, includes a commercial term loan, a debt service reserve facility, a contingent facility, and an EKN-backed facility. Societe Generale acted as Sole Underwriter, Structuring Bank, Initial Mandated Lead Arranger, Hedge Provider, Security, Facility and ECA Agent and Account Bank in the non-recourse financing of this Water Treatment Plant.
This debt and equity raising underscores Societe Generale’s leadership position in the Clean Energy Transition industry and reinforces its ambition to be at the forefront supporting emerging leaders for the years to come. It also represents a major milestone in the future decarbonisation of hard-to-abate industries, demonstrating the ability to mobilise alternative and complementary sources of financing to support industrial investments.
This partnership reflects a growing trend in the hard-to-abate industries towards more sustainable practices and the increasing importance of water treatment services in these efforts.
We see huge potential in this sector. This project represents a highly attractive opportunity to invest in the growing hydrogen steel sector, accelerating Stegra’s rapid development and scaling production in preparation to meet the global demand for low carbon steel. This kind of technology has never been more in need to meet net zero targets in countries. We are excited to be part of this facility and continue to identify and invest in core infrastructure assets that contribute to the global energy transition.
The water treatment processes are a very important part of our plant, which is the integrated plant for hydrogen, iron and steelmaking globally. What we are doing in Boden is pioneering in every aspect, and it would not be possible without partnerships with players like Aquatech and specialist greenfield investment partners like John Laing.
We are proud to support John Laing and Stegra for this project which represents a major milestone in the contribution of the European steel sector to a more sustainable growth. This demonstrates Societe Generale’s ability to structure and mobilise complementary sources of financing to support industrial investments towards a low carbon future.