OCBC Bank invests in Southeast Asia's largest low-carbon steel plant, expected to be operational by 2030 | Lianhe Zaobao

OCBC Bank's investment headquarters is located in Singapore, supporting the company's construction of the largest comprehensive low-carbon steel plant in Southeast Asia with a total investment of USD 1.5 billion (SGD 1.9 billion).

OCBC Bank announced on Monday (December 8) that this equity investment was made through its Mezzanine Capital department.

Green Esteel plans to establish a Hot Briquetted Iron (HBI) plant in Sabah, Malaysia, with an annual production capacity of 2.5 million metric tons, which will serve as an important raw material for low-carbon steel production. The new plant is expected to commence production in 2030.

According to the announcement, the total investment for the steel plant project is approximately USD 1.5 billion, with the first phase having an annual capacity of 2.5 million metric tons of HBI, capable of producing about 2.5 million metric tons of low-carbon steel. Compared to traditional steel production methods, the new solution significantly reduces carbon emissions.

Green Esteel was established in 2017, and its LinkedIn profile indicates that the company is committed to building a low-carbon, vertically integrated steel ecosystem in Southeast Asia. The company focuses on green steelmaking technology, resource trading, and industrial park development to align with global sustainability trends and regional energy transition goals.

The company is a major shareholder of the locally listed steel company BRC Asia and has recently made several investments in the region, including increasing its stake in another locally listed steel company, HG Metal Manufacturing, and becoming a major shareholder of the Malaysian listed company Southern Steel.

Steel is a widely used industrial material, particularly crucial for industries such as construction, infrastructure, and transportation. It is also a key component in achieving net-zero emission technologies, including wind turbines, solar panels, and carbon capture systems.

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![](https://dss0.zbstatic5.com/s3fs-public/styles/article_small_crop/public/articles/2025/11/26/2025080930851543bang3893_0.jpg? The announcement stated that traditional steel production heavily relies on coal, accounting for approximately 7% of global greenhouse gas emissions. According to the net-zero emissions tracking report released by the World Economic Forum, the steel industry has thus become the highest carbon-emitting manufacturing sector. As the global economy accelerates its transition to low carbon, the demand for low-carbon steel is expected to grow rapidly.

Compared to traditional steel production, the carbon emissions from low-carbon steel production technology can be reduced by up to 80%. According to the 2025 Green Steel Industry Report published by Research and Markets, the low-carbon steel market is expected to grow at a compound annual growth rate of 21.4% starting in 2024, reaching USD 19.4 billion by 2029.

This equity investment comes from OCBC Bank's Sustainability Investment Programme, which is a direct investment by OCBC in green and transitional assets, as well as promising sustainable innovation enterprises. Mezzanine capital is a hybrid financing tool that lies between corporate debt capital and equity capital, classified as long-term unsecured debt-type risk capital.

This project marks Green Esteel's first commercial financing from an Asian financial institution.

Yan Guojin, President of OCBC Bank's Global Investment Banking Division, stated that given the rapid increase in global demand for low-carbon steel, he believes this equity investment has long-term growth potential. Gong Hong, President of Green Esteel, said that this investment is crucial for advancing the low-carbon transition and accelerating the green transformation of industries.

As of 11:39 AM, OCBC Bank's stock price fell by 0.85% to SGD 18.76