According to the CEO of Saudi Arabia’s energy business, ACWA Power, development on its green hydrogen plant in NEOM will begin in the first half of 2022.
“This is the first project of that magnitude, and a significant amount of work had to be completed for the first time.” So, we’re very much in it, and we’ve already started making some work-in-progress purchases of long-lead building products. In an interview with Arab News, Paddy Padmanathan said, “There is quite a lot of action going on.”
The project’s financial closing, a joint venture with NEOM Co. and American industrial gas company Air Products, is slated to take place in the first half of next year, according to ACWA’s CEO. Last month, he told Arab News that the joint venture had recruited financial company Lazard to assist on the project.
“As soon as we’ve closed on the financing, we’ll start full construction.” We’ve already stated that liquid ammonia will be available in the market in the first quarter of 2026, so it’s already in place,” he added.
ACWA Power, which went public on Saudi Arabia’s stock exchange on Oct. 4, expects to close billions of dollars in financing for a green hydrogen joint venture at the planned futuristic city NEOM in the first quarter of next year, according to ACWA’s CEO, who added that about 20% of the $6.5 billion project will be funded with equity and the rest with limited-recourse project finance.
Padmanathan feels NEOM’s initiative will be a game changer for the Kingdom and the firm since it will allow ACWA to expand into that market once it is completed. The facility will require approximately 4.3 GW of renewable energy to run, and ACWA intends to use solar during the day and wind at night to avoid the need for batteries and costly storage options, he told Arab News.
In July 2020, Air Products announced the signing of a $5 billion agreement with ACWA Power and NEOM for a world-scale green hydrogen-based ammonia production facility driven by renewable energy. Of order to begin development in NEOM’s new industrial metropolis, the planning and design phases are already ongoing.
This joint venture is the NEOM region’s first move toward becoming a major player in the worldwide hydrogen industry. The company is projected to construct an ecologically friendly hydrogen production facility in order to provide long-term solutions for the global transportation sector and to address climate change problems.
The project, which will be co-owned equally by the three partners, would export hydrogen in the form of liquid ammonia to the global market for use as a biofuel in transportation systems.
It will produce 650 tons of carbon-free hydrogen per day and 1.2 million tons of green ammonia per year, resulting in a 3 million ton reduction in carbon dioxide emissions.
According to ACWA Power’s CEO, the company is bidding on renewable energy projects in Uzbekistan, Egypt, South Africa, and Indonesia, as well as a vast pipeline of projects in Saudi Arabia.
The company, in which the Public Investment Fund is a major shareholder, uses project finance to fund all of its projects, but it will continue to put roughly SR2.8 billion of its own money into them to keep growing.