Generate Capital Finances Construction of Pacific Steel Group EAF Micro-Mill

Credit investment will set a new benchmark for sustainable steel production

SAN FRANCISCO, Jan. 16, 2025 /PRNewswire/ -- Generate Capital, PBC ("Generate"), a leading sustainable infrastructure investment firm, is proud to support the construction of an electric arc furnace (EAF) micro-mill, which will significantly reduce the emissions of rebar used in California and nearby states. Generate is providing a $200mm secured loan to Pacific Steel Group ("PSG"), a leading reinforced steel contractor in California.

"At Generate, we are committed to supporting projects that empower communities while building the infrastructure for a more sustainable future," said Bill Sonneborn, President, Generate Capital. "PSG's innovative approach demonstrates how we can significantly reduce emissions in the industrial sector while meeting the rising demand for greener building materials economically. We're excited to partner with PSG on this transformative project.  We're grateful to CalSTRS, HESTA, and the other co-investors who joined Generate through our managed capital vehicles."

The micro-mill will convert locally sourced steel scrap into high-quality, custom-length steel rebar, a critical material for construction. The project eliminates the need for the roundtrip hauling of scrap and finished steel in and out of California, providing a transportation cost advantage and carbon emissions savings. Leveraging onsite and nearby renewable energy, electrification, carbon capture and storage and a local supply chain, the new mill is expected to produce rebar with 85% fewer emissions compared to traditional methods, setting a new benchmark for sustainable steel production.

"This innovative project aligns with our objective to provide the highest-quality materials while lowering our environmental footprint," said Eric Benson, CEO of Pacific Steel Group. "By eliminating unnecessary transport and utilizing cleaner production methods, we are creating rebar that not only meets our customers' high standards but also supports their sustainability goals. This financing from Generate enables us to take a bold step forward in building the only steel mill in California and one of the greenest steel mills in the country."

With a global market size estimated at $1.5 trillion in 2023, steel is the most widely used metal in the world. It is also one of the largest single sources of carbon emissions globally, accounting for 7% of global and almost 30% of industrial emissions. Decarbonizing the steel market, therefore, is vital to achieving the transition to net-zero emissions. Generate's investment in PSG enables steel production that is both sustainable and cost competitive. The mill will incorporate multi-technology sustainability solutions to lower its emissions and environmental footprint with project economics that eliminate the green premium.

The loan represents an anchor investment from Generate's strategic credit initiative. This pillar of the business provides structured credit solutions to finance critical assets and companies in the infrastructure and sustainable assets value-chains.

About Generate

Generate Capital is a leading sustainable investment and operating platform. Generate provides the capital and expertise that developers, businesses, cities and communities need to accelerate cost savings, resilience and decarbonization. Since 2014, Generate has invested in and operated sustainable assets across six sectors: power, mobility, waste, green digital, water and agriculture, and industrial decarbonization. With more than $10 billion raised since inception, 50+ technology and development partnerships and over 2,000 assets globally, Generate's one-stop-shop offers proof, not promises that sustainability pays.

For more information, please visit www.generatecapital.com.

About Pacific Steel Group

Pacific Steel Group is a leading independent reinforcing steel fabricator and placer with offices throughout the Western United States, providing high-quality rebar and steel services to a variety of construction projects.

For more information, please visit www.pacificsteelgroup.com.

SOURCE Generate Capital