NIB finances SSAB’s fossil-free steel mill in Sweden
NIB has signed two 15-year loan agreements with global steel maker SSAB to co-finance the construction of a fossil-free steel mill in Luleå, Sweden. NIB is participating in a consortium of investors with a SEK 2.25 billion loan share, and a SEK 1.15 billion bilateral loan with SSAB.
The total loans of SEK 3.4 billion (EUR 310 million) will be used to construct a facility with two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill, and a cold rolling complex.
The environmental benefits are substantial, as the transformation of steel production in Luleå will reduce Sweden’s total fossil carbon dioxide emissions by more than 3 million tonnes per year, equivalent to 7% of the country’s total emissions. The CO2 footprint per tonne of steel is expected to decrease from 1.7 tonnes to 0.1 tonnes.
SSAB’s Science Based Targets initiative (SBTi) goal is to achieve net-zero greenhouse gas emissions across its entire value chain by 2045, in alignment with Sweden’s national ambitions.
The project also means that SSAB will reduce costs and improve its product mix. Lead times will be shortened, and SSAB’s ability to manage short-term fluctuations in demand will be strengthened. The new steel plant will be able to use a flexible mix of raw materials, including fossil-free sponge iron, pig iron, and recycled scrap.
“The financing package gives us the flexibility we need for a robust implementation of the transition, in line with our financial targets. The investment in Luleå will build an even stronger SSAB by reducing costs, accelerating the improvement of our product mix, and virtually eliminating carbon dioxide emissions,” says SSAB’s Chief Financial Officer, Leena Craelius.
The commissioning of the plant is planned for the end of 2028. Once the new facility is fully operational, SSAB will gradually phase out the existing plant and shut down the blast furnace system.
“This investment in SSAB’s fossil-free steel mill is a landmark project that aligns perfectly with NIB’s commitment to financing sustainable and innovative solutions. By supporting this transformation in a hard-to-abate industry, we are contributing to a significant reduction in carbon emissions, thus promoting the transition to a low-carbon economy,“ says André Küüsvek, President and CEO of NIB.
SSAB is a global steel company headquartered in Stockholm, Sweden, with a leading position in high-strength steels and related services. It operates across five business segments: SSAB Special Steels, SSAB Europe, SSAB Americas, and the subsidiaries Tibnor and Ruukki Construction. SSAB is present in over 50 countries and employs around 14,500 people. It is listed on the NASDAQ Stockholm and NASDAQ Helsinki exchanges, with LKAB (10.85%) and the Government of Finland (8.27%) as the largest shareholders.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies S&P Global Ratings and Moody’s.
For further information, please contact
Kim Krokfors, Senior Banker, +358 10 618 0517, kim.krokfors@nib.int
Arild Moen, Associate Director, Communications, NIB, +358 10 618 0496, arild.moen@nib.int
