OCBC’s mezzanine capital division has acquired an equity stake in Singapore-based Green Esteel (Esteel), the controlling shareholder of SGX-listed BRC Asia, to finance the development of a hot briquetted iron (HBI) facility under its sustainability investment initiative.

The plant will be a key component of Southeast Asia’s largest integrated low-carbon steel production hub, with operations slated to begin by 2030. HBI serves as a crucial input for low-carbon steel manufacturing.

Located in Sabah, the US$1.5 billion project is projected to yield 2.5 million tonnes of HBI annually. This output can be converted into an equivalent volume of low-carbon steel, a vital material for construction, infrastructure, and transportation sectors.

OCBC notes this marks Esteel’s first institutional financing from an Asian financial provider.

The investment comes as conventional steelmaking, responsible for 7% of global carbon emissions, faces growing decarbonization pressures. OCBC’s December 8 statement highlights that low-carbon steel technologies could reduce emissions by up to 80%. Research and Markets forecasts the global low-carbon steel market to expand at a 21.4% CAGR through 2029, reaching US$19.4 billion.

"Anticipating surging global demand for low-carbon steel, we believe our Esteel investment positions us for substantial long-term returns," stated Gan Kok Kim, OCBC’s Global Investment Banking Head.

"This collaboration accelerates our transition roadmap while deepening our joint dedication to sustainable industrial evolution," added Green Esteel CEO Gong Hong.