Saudi Arabia’s flagship green hydrogen project at Oxagon in the Neom region has reached financial close with a final investment of $8.4bn in a major breakthrough for the sector.

The project, which is a joint venture between US industrial gases company Air Products, Saudi government-affiliated Acwa Power and state developer Neom, is expected to produce up to 600t/d of green ammonia from the end of 2026, positioning it as the world’s largest of its type.

Air Products will buy the plant’s entire output under an exclusive 30-year deal, which will see it export the product across its global network.

“We are taking a massive leap towards opening the plant” Nasr, Neom

“This substantial financial backing from the investment community shows the unmatched potential of Neom’s green hydrogen project. With the financial close announced today, we are taking a massive leap towards opening the plant, in line with Neom’s vision to accelerate renewable solutions,” says Nadhmi al-Nasr, chairman of Neom Green Hydrogen Company and CEO of Neom.

Engineering, procurement and construction agreements worth $6.7bn have been concluded with Air Products.

Neom reached FID in March, despite inflationary pressures that had pushed up the total cost from a previous estimate of $5bn.

The developers’ success in achieving financial close on Neom will buoy sentiment across the green hydrogen sector, which has attracted hundreds of project proposals but only seen a fraction reached FID. Less than 10pc of the $320bn of announced investments in all hydrogen projects through 2030 represents capital committed in the form of FID, according to a recent report by consultants McKinsey and industry body the Hydrogen Council.

Neom has significant strategic advantages over many projects, including the long-term anchor demand from Air Products and the liquidity enjoyed by cash rich local lenders. Financial agreements were concluded through a mix of 23 local, regional and international banks and financial institutions.

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Author: Stuart Penson