The SHS – Stahl-Holding-Saar Group, together with subsidiaries Dillinger and Saarstahl, has secured EUR 1.7 bln (USD 1.97 bln) in financing to fully fund its Power4Steel project, one of Europe’s largest steel decarbonization initiatives.
The financing package, arranged through a consortium of national and international banks, combines corporate and investment financing. Export credit agencies OeKB (Austria) and SACE (Italy) are supporting the investment component, alongside substantial equity contributions and direct funding from the German Federal Government and Saarland Regional Government under a EUR 2.6 bln (USD 3 bln) program for transforming the regional steel industry.
Advisors on the deal included ING (Documentation Agent), UniCredit (ECA Coordinator), Deutsche Bank (Co-ECA Coordinator and Facility Agent), Lazard (financial advisor), Hogan Lovells (legal counsel to SHS), and Freshfields (legal counsel to the banks). Rothschild & Co also provided early-stage financial advice.
As part of the project, SHS is building a direct reduction plant and two electric arc furnaces at Dillingen and Volklingen to gradually replace blast furnaces and converters. The switch to hydrogen-based steelmaking is expected to cut CO2 emissions by about 55pct by 2030, with the goal of climate-neutral production by 2045. In the long term, SHS aims to become the largest green steel producer within its peer group.
1 USD / 0.86 EUR
