NEOM, Saudi Arabia’s planned futuristic city has announced this week that it has achieved financial close for its green hydrogen project to be financed at a total investment value of USD 8.4 billion. The project is currently the largest green hydrogen project to achieve financial close to date, and is scheduled to begin production by the end of 2026.
The facility will be owned by NEOM’s subsidiary, NEOM Green Hydrogen Company (NGHC), and will be located at Oxagon region of the US$500 billion futuristic city.
NGHC has also concluded the engineering, procurement, and construction (EPC) agreement with Air Products as the nominated contractor and system integrator for the entire facility.
Additionally, NGHC has also secured an exclusive 30-year off-take agreement with Air Products for all the green ammonia produced at the facility, which will unlock the economic potential of renewable energy across the entire value chain.
The company also announced that non-recourse financing structured for the project has been certified by S&P Global (as the second party opinion provider) as adhering to green loan principles and is one of the largest project financings put in place under the green loan framework. Air Products has already awarded major contracts to various technology and construction partners.
“This substantial financial backing from the investment community shows the unmatched potential of NGHC’s green hydrogen project. With the financial close announced today, we are taking a massive leap towards opening the plant, in line with NEOM’s vision to accelerate renewable solutions,” said Nadhmi Al-Nasr, Chairman, NEOM Green Hydrogen Company.
“At scale, this project is the first-of-its-kind internationally, leading the world in the hydrogen revolution. Harnessing the energy of NEOM’s abundant natural resources, NGHC’s project will pave the way for the large-scale adoption of green hydrogen, while driving Saudi Vision 2030’s sustainable development goals,” Al-Nasr adds.
An equal joint venture between ACWA Power, Air Products and NEOM, NGHC’s mega-plant will integrate up to 4GW of solar and wind energy to produce up to 600 tonnes per day of carbon-free hydrogen by the end of 2026, in the form of green-ammonia as a cost-effective solution for the transportation and industrial sectors globally.
“I’m excited to announce that NGHC, together with our three partners ACWA Power, Air Products and NEOM, has achieved another significant milestone in our project by achieving financial close on the world’s largest green hydrogen plant with 23 banks and investment firms,” said David R. Edmondson, Chief Executive Officer of NGHC.
“This is a historic moment as we drive large-scale adoption of green hydrogen as the clean solution to the world’s growing energy demands. This has enabled us to also conclude the EPC agreements with Air Products for a value of USD6.7 billion,” Edmondson added.
NGHC’s financial agreements were concluded through a diverse mix of local, regional and international banks and financial institutions, along-with an Euler Hermes tranche with no fewer than 23 institutions investing in the project, located at Oxagon, in Saudi Arabia’s region of NEOM.
Earlier in January 2023, Saudi Arabia’s Ministry of Industry and Mineral Resources awarded its first industrial operating license to NGHC, paving the way for the Kingdom to become the world’s leading hydrogen producer, while maintaining its position as a key player in the energy sector.