IFC has announced an anchor investment of €75 million in the first green bond issuance by voestalpine AG, a global leader in steel processing and production headquartered in Austria. This landmark investment aims to accelerate the decarbonization of key value chains in the steel sectors of Brazil, Poland, and Romania.
Steel is a critical resource for key industries and global economic development, playing a vital role in the green transition of sectors such as transport, manufacturing, and construction. However, the steel industry faces significant decarbonization challenges due to its reliance on fossil fuels in the metallurgical production process of iron, making it a hard-to-abate sector. It requires an estimated $300 billion in investments globally to achieve decarbonization by 2050. A substantial portion of this could be sourced from publicly issued green bonds.
IFC’s investment in voestalpine’s inaugural green bond issuance, one of the first globally in the sector, is a strategic move to address these challenges. The proceeds of IFC’s participation will be used to fund voestalpine’s investments aimed at enhancing energy efficiency in Brazil, as well as contributing to decarbonizing the steel supply chain in Poland and Romania.
“voestalpine has been an environmental benchmark in the industry for decades and has a clear plan to transform its steel production with greentec steel. As early as 2027, we will partially switch from the traditional blast furnace route to green electricity-based electric arc technology, thereby reducing our emissions by around 30% by 2029. Greentec steel is therefore the largest climate protection program in Austria. By issuing the first green bond in the European steel industry, we are now also taking on a pioneering role on the capital market,” said Herbert Eibensteiner, CEO of voestalpine AG.
The project aligns with the World Bank Group’s Country Partnership Frameworks for Brazil, Poland, and Romania, emphasizing the importance of the green transition in these economies.
“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. “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.”
The project will benefit voestalpine’s operations in Poland and Romania that rely on crude and finished steel from Austria. Additionally, voestalpine manufactures products in Brazil and Poland essential for the green transition in the EU and beyond, including agricultural machinery, photovoltaic cells, transport, and wind turbines.