IFC Invests €75 Million in Voestalpine’s First Green Bond to Drive Steel Decarbonization

IFC has announced an investment of €75 million in voestalpine AG’s inaugural green bond issuance. Headquartered in Austria, voestalpine is a leading player in steel processing and production. This landmark investment aims to accelerate the decarbonization of steel supply chains in Brazil, Poland, and Romania. 

Steel is essential for various industries and is crucial for global economic growth, particularly in facilitating the green transition in transportation, manufacturing, and construction.  

EIB to provide €300 million loan to Europe’s third largest steelmaker to boost green steel production

However, the steel sector faces substantial decarbonization challenges due to its heavy reliance on fossil fuels during the metallurgical production of iron, categorizing it as a hard-to-abate industry.  

An estimated $300 billion in global investments is needed to achieve decarbonization by 2050, a significant portion of which could be funded through publicly issued green bonds. 

IFC's investment in voestalpine's inaugural green bond issuance, one of the first of its kind in the steel sector globally, represents a strategic effort to tackle these challenges. The funds raised from IFC’s participation will support voestalpine's initiatives to improve energy efficiency in Brazil and help decarbonize the steel supply chains in Poland and Romania. 

"Decarbonizing the manufacturing sector is crucial for maintaining competitiveness, upskilling jobs, and driving sustainable industrial growth in Brazil, Poland, and Romania," said Olaf Schmidt, IFC Regional Industry Director.

He added, "Voestalpine’s focus on decarbonization, global outreach, and innovation make it a strong partner for IFC, and our investment will also help create a spillover effect for green steel technologies in other emerging markets." 

IFC Supports Indonesian Steel Producer GRP in Cutting GHG Emissions with New Loan

The project is in line with the World Bank Group’s Country Partnership Frameworks established for Brazil, Poland, and Romania.  

The project will also stand to benefit voestalpine’s operations in Poland and Romania that have a dependency on crude and finished steel from Austria. In addition,  

The project will benefit voestalpine’s operations in Poland and Romania that rely on crude and finished steel from Austria. Furthermore, voestalpine produces essential products for the green transition in the EU and other regions in Brazil and Poland. These products include agricultural machinery, photovoltaic cells, transportation, and wind turbines.