Green gold under the mid­night sun

Together, we make the future happen.

Ice hotels, midnight sun, roaring rivers teeming with trout and untouched wilderness where reindeer wander freely – Northern Sweden, or Norrland, has plenty to offer. An abundance of resources such as iron ore and forests made the region home to Sweden’s very first export success in the 1800s and paved the way for its industrialisation. Today, a surplus of green energy from hydropower attracts companies that place Norrland at the heart of green global value chains that sustain the energy transition.

To showcase the business opportunities presented by Norrland, EKN gathered partners and customers from all corners of the world to a seminar at the Stockholm Museum of Modern Art in September. In welcoming the participants, Anna-Karin Jatko, Director General at EKN, pointed out that, “Business opportunities related to the green transition have evolved very rapidly in Northern Sweden.”

Jatko illustrated the journey with examples from green steel and mining, carbon-free cement, carbon capture, EV batteries and biofuel. “Norrland of today presents a modern and diverse canvas that attracts investors and companies from several sectors. These industries are becoming integrated into global value chains as exporters of the future, but financing is key in this context.”

On stage, representatives from fossil-free steel maker Stegra (formerly H2 Green Steel), truck and bus maker Scania and forestry group SCA shared their optimism going forward. Investments in large-scale industrial projects that involve transitional technology, however, require large investments. The hydrogen-powered green steel plant at Stegra in Boden, for example, is financed through a combination of equity and debt financing, with some projects guaranteed by EKN.

“Don’t underestimate the power of finance”

Lina Håkansdotter, Head of Sustainability at Stegra explained that the availability of green energy generated by hydro and wind power, coupled with the presence of iron ore, make Norrland the perfect location for Europe’s first green steel mill. “By 2030 the site will produce 5 million tons of green steel.” The record project is financed with EUR 2.1 billion in private equity, EUR 4.2 billion in loans and EUR 250 million from The EU Innovation Fund. “Don’t underestimate the power of financial services to change the world.”

Further up the value chain, several clients – among them Scania – have signed an agreement with Stegra to purchase more than one million tonnes of steel. “100 percent of what we produce 2030 will feature carbon free materials,” said Fredrik Nilzén, Head of Sustainability at Scania Group and added that, “the energy transition requires leadership and we’re here to drive the shift.”

Addressing the financial community at the seminar, Nilzén pointed out that, “as one of the few global systems, finance is a true enabler and the financial system as such is an accelerator button to speed up the transition.”

EKN currently supports Scania in export-related transactions to markets such as Côte d’Ivoire and Colombia, including buses and trucks that can run on biofuel such as agricultural waste. Green road transport and aviation requires non-fossil fuels, and biofuel offers a solution to complement battery-electric power. To this end, SCA – the largest private forest owner in Europe – has opened a bio-refinery based on tall oil, a residual from pulp production. The final output can power jet fighters as well as industrial processes. “We are building integrated value chains with industries in Norrland,” said Anders Edholm, Senior Vice President of Sustainability at SCA.

Green products galore

EKN has developed new products aiming to boost funding of projects related to the energy transition. EKN’s Green Export Credit Guarantee, for example, lets exporters and banks insure up to 100 per cent of the value of a transaction to protect themselves from the risk of non-payment. EKN’s standard export credit guarantees normally offer up to 95 percent risk cover.

In order to make use of the Green Export Credit Guarantee, the export transaction must be for green products or products with an end use as part of a green activity. The export-oriented guarantee complements EKN’s Green Credit Guarantee for green investments and working capital needs within Sweden. That guarantee covers loans up to SEK 500 million for green investments and working capital needs only within Sweden and covers the bank’s risk up to 80 percent (up from a previous 50 percent). The two guarantee types have the same green incentive (higher cover ratio) and the same green definition (EU taxonomy).

In closing her welcoming, Jatko concluded that, “Together, we make the future happen.”