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ACWA Power and CEO Back $8.5B NEOM Green Hydrogen Project

3 Mar 2023

NEOM Green Hydrogen Co., a joint venture between Air Products, NEOM Co, and ACWA Power, has secured finance agreements amounting to $8.5 billion to finance its clean energy facility. The project, known as the NEOM Green Hydrogen Project, includes the development and design of a world-scale green hydrogen and green ammonia plant, with a 30-year green ammonia offtake contract with Air Products.

The project will also cover transportation, construction, erection, installation, completion, testing, commissioning, insurance, ownership, operation, and maintenance of the facility. The total investment cost is funded by a combination of long-term debt and equity, divided into $5.85 billion senior debt and $475 million mezzanine debt facilities.

The financing arrangement also includes $1.5 billion from the National Development Fund on behalf of the National Infrastructure Fund, as well as $1.25 billion in Saudi riyal-denominated financing from the Saudi Industrial Development Fund. The balance of the finance agreements came from a consortium of financiers that includes First Abu Dhabi Bank, HSBC, Standard Chartered Bank, Mitsubishi UFJ Financial Group, BNP Paribas, Abu Dhabi Commercial Bank, and several others.

NEOM's CEO Nadhmi Al-Nasr announced that the first phase of its green hydrogen facilities is set to come online in 2025 during the Future Minerals Forum in Riyadh last year. Al-Nasr also revealed that NEOM is creating universities specializing in technical research and innovation in new industries, specifically mining. The aim is to attract the best students in the world to be prepared for the research and innovation for the future of mining. Al-Nasr stated that "it is time for the mining industry to compete with the oil industry," adding that "oil has made the big move to move to the next generation. We need the same in the mining sector."

The NEOM Green Hydrogen Project will have a significant impact on the economy of Saudi Arabia. The project will create jobs and help in the development of infrastructure in several regions, including Jubail, Al-Kharj, Taif, Qatif, Dammam, Asir, and AlMadinah. The project will also reduce the country's dependence on oil and gas by producing green hydrogen, which can be used in various sectors, including transportation and industry.

ACWA Power, a major shareholder in NEOM Green Hydrogen Co., has been instrumental in the development of renewable energy projects in Saudi Arabia. The company has been involved in several renewable energy projects, including wind and solar energy projects. ACWA Power has also been actively involved in the development of desalination plants in the country, which are essential for meeting the growing demand for water. The NEOM Green Hydrogen Project is a significant step towards achieving Saudi Arabia's goals of increasing renewable energy production and reducing the country's dependence on oil and gas.

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