Singapore lender takes equity stake in Green Esteel’s HBI plant—poised to be Southeast Asia’s largest integrated low-carbon steel facility.
Singaporean lender OCBC, through its mezzanine capital unit, has made an equity investment in Green Esteel, a Singapore-based company focused on low-carbon steel production and pre-fabrication. The investment will help develop a hot briquetted iron (HBI) plant in Sabah, Malaysia—part of what is set to become Southeast Asia’s largest integrated low-carbon steel complex. Commissioning is scheduled for 2030.
RELEVANT SUSTAINABLE GOALS
First commercial funding of its kind in Asia
OCBC’s stake marks the first commercial funding provided by a financial institution in Asia for Green Esteel. The equity comes via the bank’s sustainability investment programme, which directly backs green and transition assets as well as high-growth firms with sustainable innovations.
The Sabah project—approximately US$1.5 billion in total—will have an annual capacity of 2.5 million tonnes of HBI, an intermediate material used to produce high-quality steel. That HBI volume can be used to make roughly the same quantity of low-carbon steel. Because HBI streamlines electric and lower-emissions steel routes, it is a critical building block in decarbonising the sector.
Why decarbonising steel matters now
Steel underpins construction, infrastructure and transport—and is also essential to net-zero technologies such as wind turbines, solar panels and carbon capture systems. Traditional coal-based production accounts for about 7% of global greenhouse gas emissions, making steel the highest-emitting manufacturing sector, according to the World Economic Forum’s Net-Zero Tracker Report. By contrast, low-carbon steel technologies can potentially cut emissions by up to 80% compared with conventional routes.
As the global economy advances its low-carbon transition, demand for cleaner steel is set to expand rapidly. The Green Steel Industry Report 2025 (Research and Markets) projects the low-carbon steel market will grow at a 21.4% CAGR from 2024, reaching US$19.4 billion by 2029.
The investment aligns with OCBC’s net-zero targets for six priority sectors, including steel. “With demand for low-carbon steel expected to rise sharply around the world, we are confident that our equity investment in Esteel offers strong potential for long-term growth returns,” said Gan Kok Kim, OCBC’s head of global investment banking.
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