RIYADH: Saudi Arabia’s sustainability journey is expected to accelerate as the world’s largest green hydrogen project in the $500 billion giga-project NEOM has formally entered the construction stage.
In a statement to Tadawul, ACWA Power said that its affiliate NEOM Green Hydrogen Co. issued a full award notice to proceed with the engineering, procurement and construction, which has been approved.
ACWA Power further pointed out that its SR1.12 billion ($300 million) contribution in the limited notice to proceed will become part of its equity contribution to the project.
The statement added that all project agreements have been signed, and partners have agreed to manage certain execution risks related to the EPC contract.
In May, NGHC signed financial documents with 23 local, regional and international banks and investment firms to construct a green hydrogen facility at a total investment value of $8.4 billion.
NGHC is a joint venture of ACWA Power, Air Products and NEOM. Upon completion in 2026, it is expected to produce 600 tons of carbon-free hydrogen daily.
Apart from limiting carbon emissions and promoting sustainable development in the Kingdom, this project is also expected to expand the country’s diversification efforts.
In June, NEOM’s green hydrogen project also received the Kingdom’s first sustainable guarantee from the British bank Standard Chartered, which agreed to extend funding support for one of its contractors, Larsen & Toubro, to build the necessary renewable energy infrastructure.
L&T won a $2.78 billion contract to establish the renewable energy generation, storage and grid infrastructure from Air Products.
Lending agencies have issued sustainable guarantees for green projects that positively contribute to the environment.
Under the goals outlined in Vision 2030, Saudi Arabia aims to increase domestic generation capacity from renewable energy to 50 percent by the end of this decade to achieve net-zero emissions by 2060.
In March, a report released by S&P Global Ratings suggested that Saudi Arabia and the UAE are leading the region’s fight against climate change by producing 90 percent of the Gulf’s renewable energy.
According to S&P Global, installed solar capacity in the two countries surged from 165 megawatts in 2016 to 3 gigawatts by the end of 2021.
