VEB.RF Partners Up with SBER and Otkrytiye Bank to Finance Nation's First “Green” Steelmaking Complex

  • a syndicate of private banks and VEB.RF will finance Ecolant's megaproject in Vyksa, a monotown in the Nizhniy Novgorod Region
  • a major consumer of gas and iron ore will be built in Central Russia to make high added-value product in the future
  • the project will create over 700 new jobs with a further 2,000 jobs available while the facility is being built
  • Ecolant is compliant with current and future international environmental requirements and the agenda to reduce the carbon footprint

VEB.RF, Sberbank, and the Otkrytiye Bank will finance a project for Europe’s first fully integrated major steelmaking complex using environmentally friendly technologies. The relevant agreements were signed by VEB.RF Chair Igor Shuvalov, Sberbank First Deputy Board Chair Alexander Vadiakhin, Otkrytiye Bank President and Board Chair Mikhail Zadornov, and Ecolant owner Anatoly Sedykh.

The signing took place on April 20, 2021 in Vyksa, Nizhniy Novgorod Region, which is the site of the project being undertaken by Ecolant. The project includes the construction of an electric steelmaking complex and the appropriate infrastructure with state-of-the-art steelmaking technology, technology for round billets, and high-quality slab.

The total cost of the project exceeds RUB 140 billion. A syndicate involving VEB.RF, Sberbank, and the Otkrytiye Bank has been established to finance the project. The project will be implemented using the Project Financing Factory platform. A government corporation is participating to the tune of RUB 20 billion with a further RUB 20 billion for a reserve provision. The two other financing partners are providing another RUB 40 billion each. Over RUB 40 billion are coming from the initiator of the project itself.

“This is a project that fits in with the green economy development agenda. It creates new facilities that meet the highest environmental requirements and help reduce the carbon footprint when making metal products. VEB.RF is investing into the project in a syndicate with private banks using the Project Financing Factory mechanism. Together with the other partners and Ecolant as the project initiator, we are creating the building blocks for the future competitive position of the facility itself, the Vyksa monotown, and the Nizhniy Novgorod Region”, noted Igor Shuvalov.

“Sber pays a lot of attention to environmental issues overall, the ESG transformation both of individual facilities and whole industries. We are especially interested in Ecolant's project not only because it is important for the country’s steel industry but also because it involves the use of direct reduction of iron as the best available technology. As compared to the blast furnace/basic oxygen furnace technology, it helps substantially reduce energy consumption and greenhouse gas emissions”, noted Alexander Vediakhin.

“A conscious approach to financing businesses and support for the green economy are on the agenda as never before. The project initiator is one of the majors in the steelmaking sector and holds to high quality and environmental standards, and we are happy that we are expanding our collaboration. Thanks to the cooperation between the creditors and Ecolant, we were able to find the most suitable investment solution and structure the financing package in a way to achieve high transaction quality while complying with the ESG principles”, noted Mikhail Zadornov.

“We have a wealth of experience making large-scale breakthrough projects. They would not have been possible without bank loans. Ecolant is our first investment project of this kind that we are undertaking exclusively with Russian financing. Russian banks have become competitive globally. This project, being one of the largest in the steel sector, will be an example of implementing technology that can give the steel industry a new impetus, improve the environment in industrial areas as well as help advance the Russian economy”, emphasized Anatoly Sedykh.


Ecolant is an integrated steelmaker that does not use or make coke or use blast or basic oxygen furnaces. Steel will be made from iron ore and natural gas using direct iron reduction. The project is a single integrated manufacturing sequence from ore to steel, including DRI, an electric arc furnace, and secondary refining with a capacity of 1.8 million tons of steel a year as well as two continuous casters. The facility is scheduled to be commissioned in 2025. Most of the product will be used to make wide plate to be converted to large-diameter pipe for trunk pipelines and used in shipbuilding, to make seamless pipes for oil production, and to manufacture train wheels on the largest train wheel line in Europe belonging to the United Metallurgical Company's Vyksa facility.

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