VEB.RF, Sberbank and Otkritie Bank agree ₽140bn funding for new project.
Finance has been agreed for Ecolant, Europe’s first ever steel production plant to be run with environmentally friendly technology instead of coke chemicals and blast furnace converters.
With the plant scheduled to open in 2025, it will use an electrometallurgical furnace and will have a capacity of 1.8 million tonnes of steel per year with two continuous casting machines. The steel produced will wide sheets for large-diameter pipes used in trunk pipelines and shipbuilding, as well as production of railway wheels.
If successful, the project will be a breakthrough in decarbonisation of the Russian steel industry. It will create 700 sustainable jobs in Vyska, a steel-dominated monotown of 50,000 people, opening up the potential for similar towns and cities to adapt to climate change.
To raise the finance needed, a syndicate has been formed that includes Russia’s state development fund VEB.RF, which will provide ₽20bn alongside a reserve of another ₽20bn. Sberbank and Otkritie Bank will both provide another ₽40bn while the owners of the complex, United Metallurgical Company, will provide the rest of the funding.
VEB.RF chairman, Igor Shulavov commented: “Together with our partners, the initiator of the project the Ecolant company, we are creating a foundation for the long-term competitiveness of the enterprise itself, the monotown of Vyksa and the Nizhny Novgorod region.”
Ecolant is one of the largest investment projects in the Russian steel sectors and the introduction of this new technology is seen as a major step not just for the sector but for the Russian economy as a whole.