German long-steel producer Saarstahl and German plate producer Dillinger Group, both subsidiaries of Stahl-Holding-Saar (SHS), have announced that they have secured €1.7 billion in financing for their Power4Steel transformation program. The financing ensures full funding for the entire project, enabling SHS to advance large-scale hydrogen-based steelmaking and reach ambitious carbon-reduction milestones.
The Power4Steel initiative involves constructing a direct reduction (DRI) plant and two electric arc furnaces (EAFs) at SHS’s Dillingen and Völklingen sites. These facilities will replace existing blast furnaces and converters, marking SHS’s shift toward hydrogen-based low-carbon steel production.
Structure of the financing package
The €1.7 billion package was arranged through a consortium of leading national and international banks.
It includes:
- export credit agency (ECA) support from OeKB (Austria) and SACE (Italy),
- equity contributions from SHS, and
- direct financial aid from the German federal government and the Saarland regional government under the €2.6 billion transformation program for the Saarland steel industry.
Environmental and industrial impact
Key environmental targets as part of the Power4Steel project include:
- around 55 percent carbon emissions reduction by 2030,
- full climate neutrality by 2045.
Once operational, SHS aims to become the largest producer of green steel within its peer group, anchoring the Saarland’s transformation into a low-carbon industrial region.