Sweden Slows Green Project Guarantees After Northvolt, Stegra Struggles
Sweden's state guarantees for green projects have seen a significant increase, reaching 80 billion Swedish krona (€7 billion) in 2024 and 2025, up from 10 billion krona (€910 million). However, concerns have arisen due to the heavy reliance of key companies on these guarantees and subsidies.
The surge in guarantees comes as venture capitalists Harald Mix and Carl-Erik Lagercrantz, founders of Vargas Holding, have been quietly building their green investment empire. Vargas Holding, along with its subsidiaries Northvolt and Stegra, have benefited greatly from these funds. As of August 11, 2025, approximately 27 billion krona (€2.45 billion) in guarantees have been issued, excluding Northvolt's terminated loan agreements.
Stegra, a 'green' steel production company, faced challenges despite its environmental focus. Denied government funding and operating losses cast shadows over its progress. Meanwhile, Northvolt, a battery manufacturer, also relied heavily on state subsidies and EU funding. The high-profile bankruptcy of Northvolt, along with other European green energy project failures, has led Sweden to reassess its guarantees strategy.
By the end of 2024/25, 83% of Swedish government credit guarantees went to troubled companies Northvolt and Stegra. The government has since decided not to seek authorization for new guarantees in 2026 due to the risks and uncertainties in large-scale green investments.
Sweden's state guarantees for green projects have been significantly scaled back, with the government honoring only existing commitments and ending the program in 2026. This decision follows a period of high reliance on these guarantees by companies like Northvolt and Stegra, and a decline in European green energy projects due to subsidy issues and high-profile bankruptcies.
Read also:
- MIH Consortium Chooses BlackBerry for Next-Gen EV Platform
- Aquatech purchases Koch's Direct Lithium Extraction business, merging Li-ProTM DLE technology into the PEARLTM Technology Platform.
- Ukraine's Drone Strikes Cripple Russian Rail, Impacting Military Operations and Economy
- Li Auto faces scrutiny after crash test involving i8 model and a truck manufacturer sparks controversy
