Saudi Arabia’s NEOM Green Hydrogen Company has closed on the financing of an $8.4 billion green hydrogen plant capable of producing massive amounts of the carbon-free fuel.
Additionally, the NEOM Green Hydrogen Company said it has secured an exclusive 30-year off-take agreement with Air Products for all of the green ammonia produced at the facility. The financing included $6.1 billion from 23 local, regional, and international banks and financial institutions.
The facility is being built in Oxagon in the NEOM region of Saudi Arabia and will integrate up to 4 gigawatts of solar and wind energy to produce up to 600 metric tons of green hydrogen per day by the end of 2026, the company said. The fuel will be made in the form of green ammonia, which NEOM Green Hydrogen Company said will help the international transportation and heavy industry sectors with sustainability efforts.
Significant Boost to Green Hydrogen Market
The deals represent two of the most significant to date regarding green hydrogen. The International Renewable Energy Agency estimates that hydrogen will make up 12% of the world’s energy consumption by 2050, with nearly two-thirds of that in the form of green hydrogen. Green hydrogen is produced using clean energy through electrolysis.
“This substantial financial backing from the investment community shows the unmatched potential of NGHC’s green hydrogen project,” said NEOM Green Hydrogen Company Chairman and NEOM CEO Nadhmi Al-Nasr. “At scale, this project is the first-of-its-kind internationally, leading the world in the hydrogen revolution.”
Al-Nasr said the company believes the deal will lead to the expansion of the clean hydrogen market with the widespread adoption of green hydrogen, which has already seen recent gains.
Earlier this year, Air Products and AES unveiled plans to build a $4 billion green hydrogen facility in Texas. That plant will use 1.4 GW of wind and solar power to produce more than 200 metric tons of green hydrogen per day.
In addition to the significant amount of financing for the NEOM project, S&P Global certified the financing as adhering to green principles. It is one of the largest financial undertakings to fall under the green loan framework, according to NEOM Green Hydrogen Company.
The hydrogen plant is an equal joint venture between ACWA Power, Air Products, and NEOM. Air Products will be the contractor and system integrator of the entire facility.
According to a report in Bloomberg, ACWA Power said it plans to build as many as three more green hydrogen plants in the NEOM area. In early 2023, Saudi Arabia’s Ministry of Industry and Mineral Resources awarded its first industrial operating license to NEOM Green Hydrogen Company.