As the need to combat climate change and shift towards renewable energy becomes increasingly urgent, green hydrogen production cannot be overstated. It offers a clean and versatile energy solution, making it vital for decarbonizing sectors such as transportation, industry, and power generation. The recent $8.4 billion deal secured by the NEOM Company for the world’s largest green hydrogen production facility in Oxagon, Saudi Arabia’s NEOM region, signifies a significant stride towards a sustainable future.
By utilizing renewable energy sources like wind and solar power, green hydrogen is produced through electrolysis, leaving no carbon footprint. This substantial investment demonstrates the growing recognition of green hydrogen’s potential as a clean energy alternative.
NEOM’s Green Hydrogen Vision: 4GW of Clean Energy
NEOM Green Hydrogen Company (NGHC) of Saudi Arabia has successfully secured financial agreements for its ambitious green hydrogen project. The agreements were reached with a diverse range of local, regional, and international banks and financial institutions, supported by an Euler Hermes tranche involving 23 institutions. The project entails the construction of a state-of-the-art green hydrogen production plant in the NEOM region’s Oxagon.
This remarkable endeavor is a joint venture between Acwa Power, Air Products, and Neom. It is poised to become the largest green hydrogen production facility worldwide. With impressive integration of up to 4 gigawatts of solar and wind energy, the facility aims to generate approximately 600 tonnes of carbon-free hydrogen per day by 2026, primarily in the form of green ammonia. This endeavor signifies a significant step forward in Saudi Arabia’s pursuit of sustainable energy solutions. It further establishes its position as a global leader in the green hydrogen industry.
Sustainable Funding: NEOM’s Path to Green Hydrogen Success
NGHC’s project financing structure is certified by S&P Global under green loan principles, one of the largest in the framework. A $6.7bn engineering, procurement, and construction agreement with Air Products ensure their role as contractor and system integrator for the entire facility. NGHC secured an exclusive 30-year off-take agreement with Air Products for all green ammonia production, unlocking renewable energy’s economic potential. As the exclusive off-taker, Air Products will utilize the full production volume of green hydrogen in the form of green ammonia from NGHC to serve global mobility and industrial markets.
NEOM’s Port: First Shipment of Green Ammonia Set for 2026
NGHC is constructing a green hydrogen plant to produce and export green ammonia worldwide. The first shipment is anticipated from NEOM’s port in Q1 2026. In January 2023, Saudi Arabia’s Ministry of Industry and Mineral Resources granted NGHC its initial industrial operating license, positioning the kingdom as a leading global hydrogen producer. With unique advantages, GCC states are at the forefront of the hydrogen transition. Hydrogen’s efficiency and zero-emission combustion, producing only water, make it an ideal replacement for fossil fuels. Saudi Arabia, the UAE, and Oman are actively engaged in hydrogen projects, including NEOM’s $5bn green-hydrogen plant nearing completion.