Two persons with knowledge of the conversations informed ET that Vulcan Steel, a privately held business owned by tycoon Naveen Jindal, is in talks with export credit agencies (ECAs) from many nations to get $2.5 billion in finance for its future green steel facility in Oman.
The individuals mentioned above said that all money for the plant’s construction would come from non-bank sources. A previous interview with a top official from the organization revealed that the corporation ultimately intends to spend more than $3 billion on the Duqm-based project.
The capital products for the facility, which will be mostly imported from outside Oman, will be purchased with the support of the ECAs. Typically, ECAs support export by financing purchases made by overseas consumers from their nation.
The factory, which is anticipated to be operational by 2027, will be able to produce 5 million tonnes annually. The Jindal Shadeed Iron and Steel LLC, which Vulcan Steel purchased in 2020, will include it.
To achieve its decarbonization objectives, Europe supports lower-emission raw materials, hence the project has been done with a focus on the steel markets there. Green steel is one of the top alternatives for industrial organizations to reduce their carbon footprint, thus Vulcan Steel is relying on the market potential for it.
As of Monday afternoon, queries made to Jindal Steel and Power (JSPL) had not received a response.
Although it has identical qualities to ordinary steel, green steel is manufactured without the use of fossil fuels, leaving a smaller carbon impact. At the moment, it is not accessible on an industrial scale.
Businesses throughout the globe, particularly in industrialized nations, are vying for technological advancement and mass production of green steel. Once its under-construction factory is operational by 2025, Swedish company H2 Green Steel will have established itself as the world’s first significant producer of green steel.
For an estimated $1 billion in enterprise value, Vulcan Steel purchased Jindal Shaded Iron and Steel LLC from JSPL. To deleverage its financial sheet and concentrate on India’s primary steel industry, JSPL decided to sell the asset in 2020. In the Oman asset, which it had purchased for $464 million in 2010, JSPL maintained a 99.9% share.
The only integrated steelworks in Oman are now operated by Jindal Shadeed. The projected 5 mtpa green steel mill will be the second integrated steelworks in the nation of the Gulf once it is finished.
