The company is building a new mill, which it says will produce steel using 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".

In October, Stegra announced another 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.

"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.

Behind Stegra is the investment firm Vargas Holding, which was also a co-founder of Northvolt.

"After several slower months during the funding activities, Stegra will now ramp up construction activities. The project timeline is under review," the company said.