$8.4B Funding for World’s Largest Green Hydrogen Production Facility

June 05, 2023 by Mike Falter

NEOM Green Hydrogen Company has closed $8.4 billion in funding to construct the world’s largest green hydrogen plant in the NEOM region of Saudi Arabia.

NEOM Green Hydrogen Company (NGHC), an equal joint venture between ACWA Power, Air Products, and NEOM, has announced the financial close of $8.4 billion in funding for a green hydrogen and ammonia production facility projected to be the world’s largest.


Renewable power NEOM region of Saudi Arabia

Renewable power NEOM region of Saudi Arabia. Image used courtesy of NEOM


The new plant will be constructed in Saudi Arabia’s NEOM region at the recently developed port city of Oxagon. Joint venture partner Air Products will be heading the development effort while serving as lead contractor for construction of the facility.   

The funding includes financing from 23 local, regional, and international banks and financial institutions, including significant participation from the Saudi Industrial Development Fund (SIDF) and the National Infrastructure Fund (NIF).

Air Products has also agreed to an exclusive 30-year take-off agreement that obligates it to purchase and export all green ammonia produced by the facility.  


Transforming an Economy

For many decades, Saudi Arabia has built its economy on the extraction and production of fossil fuels to support a global industry powered by oil and gas.  

Looking to future decades, NEOM is a region of approximately 26,500 sq km in northwestern Saudi Arabia that has been designated as a special economic zone to spur entrepreneurship and innovation in new economic engines like advanced manufacturing, technology, tourism, and other sectors, all powered by renewable energy sources such as wind and solar.  

The vast natural resources of the NEOM region of Saudi Arabia, including large open spaces and abundant sunshine, make it ideal for energy production driven by renewables and, thus, an ideal site for green hydrogen production.  

Along with the new hydrogen production facility, other NEOM developments include Oxagon, a fully functioning port city and innovation hub, and “The Line,” a raised urban living development that spans 170 km across the desert with a width of only 200 meters.  

Development of the NEOM region is primarily funded by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, with a commitment of $500 billion as part of the Fund’s charter to help expand and diversify the Saudi economy.     


NEOM Green Hydrogen Production Facility

NGHC’s new mega facility will be powered by up to 4 MW of solar and wind energy, producing 1.2 million tons of green ammonia (equivalent to 600 tons of hydrogen) daily by the end of 2026. The carbon-free fuel will be produced as green ammonia, a more cost-effective solution for storage and transportation that can easily be converted to hydrogen as needed.     

With funding secured, lead contractor Air Products has already awarded numerous development contracts to various technology and construction partners.  

Per the take-off agreement, Air Products will export green ammonia produced by the facility to global markets from the NEOM port city of Oxagon.


Port facilities at Oxagon

Port facilities at Oxagon will ship clean ammonia to global markets. Image used courtesy of NEOM


Producing Green Ammonia, and Hydrogen

Used in fuel cells to generate electricity, green hydrogen (hydrogen produced from clean electricity) is attractive as an alternative fuel source to oil, gas, and diesel. But hydrogen can be difficult and expensive to store and transport in bulk. 


Green ammonia production and use

Green ammonia production and use. Image used courtesy of The Royal Society


On the other hand, ammonia (NH3) is much easier to store and transport and can be readily purified and converted to hydrogen gas as needed.   

Green ammonia is produced from clean hydrogen and nitrogen through the Haber process. The Haber process, also referred to as Haber-Bosch, combines hydrogen and nitrogen at high temperatures and pressure to create ammonia (NH3).  

When sustainable electricity sources power hydrogen and ammonia production, the production is considered clean or carbon-free.

In addition to an energy source that is much easier to store and transport, green ammonia can be used for powering engines and fuel cells. Many anticipate the maritime industry to be an early adopter of ammonia to power marine engines.