Despite all having lost money on bankrupt battery firm Northvolt, three of Sweden’s largest pension funds are handing more money to another of Sweden’s big industrial hopes for the climate transition in a multi-pronged financial rescue yesterday.
National pensions buffer funds AP2 and AP4, and occupational pension fund AMF, agreed to deliver more financing to green steel startup Stegra yesterday alongside a consortium led by the country’s powerful Wallenberg family – though it remains unclear how much the deal will dilute the pension funds’ ownership stakes.
Stegra – which has been struggling to fund completion of its green steel plant in northern Sweden – announced yesterday it agreed a €1.4bn financing round led by Wallenberg Investments, Temasek and IMAS, a consortium which would “take a leading position” at the firm, with its adviser, former Volvo chief executive officer Leif Johansson, taking over as Stegra’s chair.
“Funding is further strongly supported by Stegra’s existing shareholders, including Altor who will be the second largest owner post-closing, as well as Hy24 and Just Climate,” the firm said, adding that the deal was subject to credit approvals by lenders and regulatory approval.
Until now, private equity firm Altor has been the largest owner of Stegra, previously called H2 Green Steel.
AP2 and AP4 confirmed they are participating in the financing exercise via their investments through and alongside Just Climate, which was set up by Al Gore-chaired Generation Investment Management.
AMF, which was reported last year as having a 5.9% stake in the steel company, said that while it was not part of the new consortium, as an existing owner, it had supported Stegra with capital recently “to get the solution in place”.
The occupational pension fund, Sweden’s second largest, said it has invested about SEK2bn (€180m) in total in Stegra.
Asked how much of that was the recent capital addition, Katarina Romberg, AMF’s head of asset management, told IPE: “Our contribution to the financing announced today is of limited size in relation to our existing investment.”
Regarding the expected dilution of AMF’s stake, Romberg said: “We cannot comment on dilution at this stage.”
Explaining AMF’s decision on participation in the financing, she said that from a capital management perspective, and looking at the pension fund’s overall portfolio and how it was invested across different asset classes, Stegra already sat in a part of AMF’s portfolio that consisted of smaller unlisted investments.
“We are therefore satisfied with our exposure to Stegra,” she said, adding: “After all, this remains a high‑risk investment, which limits the size of such investments for us.”
AP2 told IPE it had previously been invested in Stegra in two ways – €60m through a co-investment fund managed by Just Climate, and an estimated exposure to Stegra of about €6m via an investment in the Just Climate fund, where Stegra is one of several investments
“We have committed to participate in the new package pro rata, translating into an additional investment of some €30m,” a spokeswoman for AP2 said.
“We have assessed the commitment as a new investment, based on expected return and risk: We are aware that this is a challenging project with a high level of risk,” she said, adding: “At the same time, our assessment is that it had good chances of succeeding and, in addition to delivering a good return, contributing to the climate transition.”
“From a portfolio perspective, we have a highly diversified portfolio and the additional investment amounts to less than one per mille of our assets under management,” the AP2 spokeswoman noted.
Asked about dilution of its ownership stake in Stegra, she said it was correct that with the new financing existing shareholders would be diluted, but was not able to give details about the structure of the agreement and the outcome for participating and non-participating shareholders.
AP4, meanwhile, told IPE it had invested a total of SEK493m in the Just Climate fund as at the end of 2025.
Tobias Fransson, AP4’s head of sustainability, finance and communications, said: “All investors in the Just Climate Fund will provide their pro rata share of the new funding to Stegra.”
Fransson said AP4 welcomed yesterday’s announcement, “which is positive for AP4’s investment with Just Climate, for Swedish industry, and for the path toward reduced dependence on fossil fuels.”
Asked about dilution though, he said he was unable to answer detailed questions questions about the financing.
The AP buffer funds have been criticised about their joint investment in Northvolt in 2021, which led to a SEK5.8bn loss.
