Setting a benchmark in Energy Transition: Hogan Lovells advises SHS Group on a €1.7 billion financing for one of Europe’s largest decarbonization initiatives in the steel sector

The financing of Power4Steel is backed by significant equity contributions and direct grants from the German federal government and the state of Saarland as part of the €2.6 billion funding initiative for the Saarland steel industry. The overall financing package consists of export credit facilities, covered by the export credit agencies Österreichische Kontrollbank (OeKB) and SACE S.p.A. (SACE), as well as commercial facilities, which are provided by a consortium of leading banks.

Power4Steel marks a significant step in the transformation of the German steel industry. The SHS Group, one of the largest steel manufacturers in Germany, has launched the Power4Steel project, enabling the acquisition, installation and construction of a direct reduction plant (DRI) and two electric arc furnaces (EAF) in Saarland which replace the blast furnace and oxygen converters. These facilities will enable the production of steel with substantially lower CO₂ emissions. With these measures, SHS Group is setting a benchmark for the transformation of the steel industry and the Group’s transformation towards climate-neutral steel production, enabling the decarbonisation of its production processes at the Völklingen and Dillingen sites in Saarland. 

The Hogan Lovells team comprehensively advised the SHS Group on all matters relating to the drafting, negotiation and the documentation of the financing arrangements. With its longstanding expertise in complex financings and innovative energy transition projects, the Hogan Lovells team regularly advises leading companies and financial institutions on transformative transactions in the energy and infrastructure sector.

Hogan Lovells team for SHS Group

Dr. Carla Luh (Partner), Merve Schmitte (Lead Senior Associate), Stipe Bojanic (Counsel), Amy Wienke (Senior Associate), Edris Zewari (Associate), Julian Schulz (Associate) (Infrastructure / Finance, Germany);

Dr. Maximilian Frystatzki (Senior Associate, Corporate / Finance, Hamburg);

Romain Marchand (Partner), Noémie Lisbonis Boyer (Senior Associate), Alexia Legrand (Associate) (Infrastructure/ Finance, Paris);

Dr. Marc Schweda (Partner, Regulatory, Hamburg);

Dr. Ingmar Dörr (Partner, Tax, Munich).