Oman Green Iron Venture Secures German Financing: Implications for Business Growth and Investment Opportunities
MUSCAT: Meranti Green Steel, a Singapore-based firm, has announced its strategic investment plans in Oman, appointing KfW IPEX-Bank as the Lead Arranger for its green iron project in the Special Economic Zone at Duqm (SEZAD).
Additionally, Jebsen & Jessen Industrial Solutions (JJIS), a German engineering and industrial services provider, has been named the Key Partner for the project’s export credit agency (ECA)-backed debt financing.
Meranti intends to establish a 2.5 million tonnes per annum (Mtpa) Hot Briquetted Iron/Direct Reduced Iron (HBI/DRI) plant in the initial phase at SEZAD. HBI and DRI are premium iron ore products that serve as clean, high-quality feedstock for Electric Arc Furnace (EAF) and other modern steel mills, providing a low-carbon alternative to traditional blast-furnace materials and facilitating greener steel production.
The Al Duqm project will utilize a combination of natural gas and green hydrogen, progressively increasing hydrogen use to further lower carbon intensity. While part of the production will support Meranti’s forthcoming green steel plant in Rayong, Thailand, another portion will cater to UK steelmakers seeking low-carbon feedstock.
Upon announcing the financing mandate, Meranti stated, “This milestone solidifies the foundation for the first large-scale, independent green iron project of its kind in the region, designed from the ground up to deliver cost-competitive, low-carbon HBI to global markets.”
Louis Kay, Chief Financial Officer of Meranti Green Steel, remarked on the collaboration, stating, “I look forward to working closely with both KfW IPEX-Bank and Jebsen & Jessen on establishing a coordinated ECA financing platform. We appreciate both institutions for their partnership and confidence in our strategy to deliver low-carbon HBI from Oman.”
He emphasized, “We take pride in collaborating with partners who believe that sustainable steelmaking is not just a future ambition, but an industrial reality that enhances the growing Electric Arc Furnace steelmaking route.”
KfW IPEX-Bank, based in Frankfurt am Main, specializes in structuring long-term financing for major industrial, energy, and infrastructure projects. JJIS, located in Hamburg, supports complex industrial ventures through equipment procurement, export-finance facilitation, and turnkey engineering solutions.
Meranti aims to make a Final Investment Decision (FID) on the Al Duqm project by mid-2026, with commissioning anticipated by mid-2029. Last month, the company revealed that it had signed offtake term sheets—preliminary, non-binding commitments—covering both the first phase of HBI output from this investment and a potential second phase.
Special Analysis by Omanet | Navigate Oman’s Market
The establishment of Meranti Green Steel’s green iron project in Duqm represents a significant shift towards sustainable industrial practices in Oman, offering businesses an opportunity to invest in and leverage low-carbon technologies. Entrepreneurs should assess the growing global demand for cleaner steel products, potentially positioning themselves at the forefront of a burgeoning green steel market. However, reliance on foreign partnerships for financing and technology could pose risks, necessitating careful evaluation of supply chain dependencies and market readiness.
