Vulcan Steel, a privately held company owned by industrialist Naveen Jindal, is in talks with multiple export credit agencies (ECAs) to secure $2.5 billion in funding for its upcoming green steel plant in Oman, according to two people familiar with the discussions.

According to the people cited above, the plant will be built entirely with funds from non-bank sources. According to an earlier interview with a senior executive from the group, the company plans to invest more than $3 billion in the Duqm-based project.

The ECAs will contribute to the purchase of capital goods for the plant, which will be largely imported from abroad in Oman. ECAs typically fund the purchases of foreign buyers from their home country, thereby encouraging export.

Expected to be commissioned by 2027, the plant will have a manufacturing capacity of 5 million tonnes per annum. It will be a part of Jindal Shadeed Iron and Steel LLC, which Vulcan Steel acquired in 2020.

The project has been undertaken with a focus on the European steel markets as the continent favours lower emission raw materials to meet its decarbonisation goals. Vulcan Steel is betting on the demand potential for green steel as it is seen as one of the leading solutions for manufacturing companies to cut their carbon footprint.