Cross-border team advises banking syndicates on green loan financings of SALZGITTER AG totalling €500 million

Global law firm Norton Rose Fulbright has advised two banking syndicates on the financing of SALZGITTER AG through two export credit facilities totalling €500 million.

The overall financing package for SALZGITTER AG comprises an export credit facility totalling €200 million, which was provided by a banking consortium led by Commerzbank and is covered and refinanced by Österreichische Kontrollbank (OeKB). In addition, a consortium led by BNP Paribas is providing a further export credit facility totalling €300 million, which is covered by the Italian credit insurance company SACE and supported by an interest subsidy agreement provided by the investment promotion agency SIMEST.

The total loan, which is structured according to the Loan Market Association's Green Loan Principles, will finance part of the €2.3 billion Phase 1 of SALCOS (Salzgitter Low CO2 Steelmaking). The project aims to decarbonise the steelmaker's production by switching the manufacturing process from blast furnaces to electric arc furnaces fed with directly reduced iron and powered by green electricity or green hydrogen. Once completed in 2033, SALCOS is expected to reduce Salzgitter AG's CO2 emissions from steel production by 95% and thus reduce total CO2 emissions in Germany by around 1%. For SIMEST and SACE, this is the first subsidized green loan.

The banking syndicates as well as SIMEST and SACE were advised by an international Norton Rose Fulbright team co-led by Frankfurt partner Dr Bernhard Fiedler and Milan partner Arturo Sferuzza (both Banking / Finance). In addition, Yevgenia Belokon and Kristina Thielemann (both Associate, Frankfurt, Banking / Finance) as well as Giulio Mariano (Senior Associate, Banking / Finance) and Regan Eastwood (Paralegal) from Milan were involved.

SALZGITTER AG was advised by an international Linklaters team consisting of Michal Hlásek, Dr Urs Lewens, Dr Johannes Gottwald (all Linklaters Frankfurt) as well as Benedetta Marino, Matteo Bencic and Tessa Lee (all Linklaters Italy).

Additionally, Dr Christoph Wildmoser from Herbst Kinsky advised on the Austrian law aspects of the export credit facility covered and refinanced by OeKB.