Saudi Arabia’s flagship green ammonia complex at Neom has reached financial close and will enter full construction imminently, co-developer Acwa Power announced today at the World Hydrogen MENA conference.

Twenty-four lenders from global financial institutions have invested in the plant on a project financing basis, says Acwa’s global head of hydrogen, Andrea Lovato. He confirms the project cost has risen from an initial estimate of $5bn to $8.5bn.

“Our target is $25/MWh for the hydrogen—less than $1/kg,” Lovato says, adding that getting the cost down to $50/MWh would make hydrogen competitive with oil on price. “We see as we build [the Neom green hydrogen complex] that we are in the range of $100/MWh.”

“It meets the EU criteria, absolutely” Lovato, Acwa

“We have certified our business model based on price, in an offtake type of agreement. It has been made bankable in a normal utility point of view, like a power project or a water project. And it gives the idea that [green hydrogen] is already proven today, it is proven in terms of the numbers but also proven that lenders can subscribe to our business model.”

“It meets the EU criteria, absolutely—it exceeds the EU criteria,” Lovato tells Hydrogen Economist, noting that the project fully integrates renewable power and hydrogen production. Neom will provide “the best product, the best solution to get the real green hydrogen”, he adds.

“Obviously you need to ship it to Europe, and there are no ships that operate now on green [fuels],” he notes, but he is confident that, even with emissions from this part of the value chain, the hydrogen’s lifecycle emissions will stay below 70pc of equivalent fossil fuels.

Acwa is also developing a similar large-scale green hydrogen project in Oman. But Lovato is cautious on confirming whether FID will be a faster process for this project, noting that the country’s government has only just started the process of auctioning state-owned land for development. “It does not only depend on us, it depends also on [state auction body Hydrom],” he notes.

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Author: Polly Martin