meed-logo

line1 line2 line3
SIGN IN / REGISTER

Financing signed for $8.5bn Neom hydrogen project

1 March 2023

Neom Green Hydrogen Company (NGHC) has signed financing agreements with banks and lenders for the $8.5bn integrated green hydrogen project in Neom, Saudi Arabia.

According to a bourse filing by Saudi utility developer and investor Acwa Power, one of the three NGHC consortium companies, the total financing consists of $5.85bn of senior debt and $475m of mezzanine debt facilities.

Both are arranged on a non-recourse project finance basis, as follows:

  • $1.5bn from the National Development Fund on behalf of the National Infrastructure Fund
  • $1.25bn in the form of SR-denominated financing from the Saudi Industrial Development Fund

The balance is from a consortium of financiers, structured as a combination of long-term uncovered tranches and an Euler Hermes covered tranche, comprising:

  • First Abu Dhabi Bank
  • HSBC
  • Standard Chartered Bank
  • Mitsubishi UFJ Financial Group
  • BNP Paribas
  • Abu Dhabi Commercial Bank
  • Natixis
  • Saudi British Bank
  • Sumitomo Mitsui Banking Corporation
  • Saudi National Bank
  • KFW
  • Riyad Bank
  • Norinchukin Bank
  • Mizuho Bank
  • Banque Saudi Fransi
  • Alinma Bank
  • Apicorp
  • JP Morgan
  • DZ Bank
  • Korea Development Bank 
  • Credit Agricole

MEED previously reported that the project capital needs for the integrated Neom green hydrogen project have increased to $8.5bn, up 70 per cent from the original cost estimated at $5bn when the project was first announced in July 2020.

The project’s capital requirement had increased to $6.7bn during the intervening period, before reaching the current estimate.

The increases accounted for inflation since 2020 and the additional scope to make the project more self-sufficient and with lower operating costs.

The latest upward capital revision accounts for project financing costs, up-front fees, interest during construction, additional joint venture costs and land, among others.

Neom, Air Products and Acwa Power each have a 33.3 per cent stake in NGHC, the special project vehicle implementing the $8.5bn project.

Air Products is also the main engineering, procurement and construction (EPC) contractor and system integrator for the project and the exclusive offtaker of the green ammonia produced at the facility.

The integrated facility will produce hydrogen to be synthesised into carbon-free ammonia for export exclusively by Air Products to global markets.

Execution status

Air Products said the project’s engineering phase is 30 per cent complete, with all major subcontracts awarded. The land preparation is also complete.

Air Products signed a sub-contract agreement with India’s Larsen & Toubro (L&T) for the power grid and generation works for the Neom green hydrogen project, as MEED reported in January.

The contract covers the construction of a 2,930MW solar power generation plant, a 1,370MW wind power farm and a 400MW battery energy storage system, according to a source familiar with the plan.

The package also includes a power transmission network extending 190 kilometres.

The planned wind and solar power plants are located in northwest Saudi Arabia, close to the border with Jordan.

Notice to proceed

In April 2021, Acwa Power confirmed signing limited notice to proceed (LNTP) agreements for the overall EPC contract for the Neom green hydrogen project.

The agreements include an in-kingdom LNTP for the EPC contract between NGHC and Air Products Middle East Industrial Gases; and an out-of-kingdom LNTP for the EPC contract between NGHC and Air Products Equipment.

In addition to the renewable energy plants, battery storage and power transmission network, the Neom green hydrogen and ammonia project comprises 2,000MW of electrolysers to produce 650 tonnes of hydrogen a day and air separation units to produce nitrogen for the conversion of hydrogen into 1.2 million tonnes of ammonia a year.

In June 2021, US-headquartered Baker Hughes announced it would supply Air Products with advanced compression technology for the Neom facility’s electrolyser plant.

In December 2021, NGHC awarded Germany’s Thyssenkrupp Uhde Chlorine Engineers the contract to supply a more than 2GW electrolysis plant for the project.

Under this contract, Thyssenkrupp will engineer, procure and fabricate the plant based on the firm’s 20MW alkaline water electrolysis module.

In December, NGHC announced the signing of facility agreements with local, regional and international banks for the project.

It also announced the execution of a commitment letter with the Saudi Industrial Development Fund.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10639931/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Local contractor wins $143m Jeddah sewage contracts

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s National Water Company (NWC) has awarded two sewage network contracts worth a combined SR536.3m ($143m) to local contractor Civil Works Company.

    The projects will be implemented over 32 months from site handover and will serve northern Jeddah districts.

    The first contract, valued at SR278.5m ($74.3m), covers incomplete main lines and secondary sewage networks serving parts of the Al-Bashair, Al-Asala and Al-Falah neighbourhoods.

    The scope includes pipelines ranging from 200mm to 800mm in diameter with a total length of about 54.8 kilometres (km).

    The package also includes sewage tunnels with diameters ranging from 600mm to 1,800mm and a total length of approximately 6.5km. Works will also serve the Taybah, Abhar Al-Shamaliyah and Al-Hamdaniyah districts.

    The second contract is valued at SR257.8m ($68.8m). It covers the implementation of main lines and sub-networks to serve part of the Al-Hamdaniya neighbourhood.

    The works include pipelines ranging from 200mm to 1,500mm in diameter with a total length of about 78.5km. The scope also includes horizontal drilling works for sewage tunnels with diameters from 1,200mm to 1,400mm and a total length of approximately 205 metres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699620/main.jpg
    Mark Dowdall
  • Saudi Arabia prequalifies firms for gas transmission grids

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Energy Ministry has prequalified companies to develop natural gas distribution networks in five industrial cities in the kingdom on a build-own-operate (BOO) basis.

    The industrial zones earmarked are Al-Kharj Industrial City; Sudair City for Industry and Business; and the First, Second and Third Industrial Cities in Jeddah, the Energy Ministry said in a statement.

    The contractors prequalified to bid for the natural gas transmission grids BOO scheme include eight standalone firms and seven consortiums:

    • East Gas (Egypt)
    • Natural Gas Distribution Company (Saudi Arabia)
    • Egyptian Kuwaiti Advanced Operation and Maintenance (Saudi Arabia)
    • Modern Gas (Egypt)
    • Saab Energy Solutions (Saudi Arabia)
    • Sergas Contracting (Saudi Arabia)
    • Bharat Petroleum Corporation (India)
    • UniGas Arabia (Saudi Arabia)
    • Best Gas Carrier / Khazeen / Mubadra (Saudi Arabia)
    • Al Sharif Contracting (Saudi Arabia) / Anton Oilfield Services Group (China) China Oil and Gas Group
    • Hulul (owned by Saudi Arabia’s National Gas and Industrialization Company) /Al-Fanar Gas Group (UAE)
    • Indraprastha Gas (India) / Masah Contracting (Saudi Arabia)
    • Expertise Contracting / PGL Pipelines (UK)
    • National Gas Company (Egypt) / Egypt Gas (Egypt)
    • Taqa Arabia (Egypt) / Taqa Group (UAE)

    The Energy Ministry has set a deadline of 23 April for these prequalified contractors to submit technical bids.

    The ministry added in its statement that it has identified a total of 36 industrial cities in Saudi Arabia for gas infrastructure development.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699582/main0334.png
    Indrajit Sen
  • Veolia wins Jordan water services contract

    18 February 2026

    Register for MEED’s 14-day trial access 

    France's Veolia has signed a four-year performance-based management contract with the Water Authority of Jordan to support water and wastewater services in the country’s northern governorates.

    Under the contract, Veolia will provide operations, maintenance and management services to Yarmouk Water Company, the public utility responsible for water supply and wastewater services in the region.

    The agreement covers Irbid, Jerash, Ajloun and Mafraq, an area spanning nearly 30,000 square kilometres and covering about 3 million people.

    The scope includes water and wastewater operations, maintenance, billing and collection, and customer service.

    According to the firm, the performance-based structure prioritises measurable improvements, including service delivery, cost efficiency and revenue management.

    The company said it will deploy technical and management specialists to support operations, rehabilitation works and investment initiatives.

    The contract builds on Veolia’s existing operational role in Jordan’s water sector. The company operates the Disi-Amman scheme, which supplies about 100 million cubic metres of drinking water a year, under an operations and maintenance contract.

    It also operates the Al-Samra wastewater treatment plant, which produces about 133 million cubic metres of treated wastewater annually for agricultural reuse.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15684109/main0535.jpg
    Mark Dowdall
  • SAR tenders phosphate rail project management deal

    18 February 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabian Railways (SAR) has floated another tender inviting firms to bid for a contract covering the project management consultancy services for its Phosphate 3 rail programme.

    The tender was issued on 15 February with a bid submission deadline of 5 April.

    The contract duration is 54 months.

    The latest tender follows SAR floating a multibillion-riyal tender to double the tracks on the existing phosphate transport railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the kingdom’s Eastern Province.

    The tender – covering the second section of the track-doubling works, spanning more than 150 kilometres (km) – was issued on 9 February. The bid submission deadline is 15 April.

    Earlier this month, MEED reported that SAR received bids from contractors on 1 February for the project’s first phase, which spans about 100km from the AZ1/Nariyah Yard to Ras Al-Khair.

    The scope includes track doubling, alignment modifications, new utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track.

    The scope also covers support for signalling and telecommunications systems.

    The tender notice was issued in late November with a bid submission deadline of 20 January.

    Switzerland-based engineering firm ARX is the project consultant.

    MEED understands that SAR is expected to tender a total of four packages for the phosphate railway line.

    The other packages expected to be tendered shortly include the depot and the systems package.

    In 2023, MEED reported that SAR was planning two projects to increase its freight capacity, including an estimated SR4.2bn ($1.1bn) project to install a second track along the North Train freight line and construct three new freight yards.

    Formerly known as the North-South Railway, the North Train is a 1,550km-long freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. There, it diverges into a line southwards to Riyadh and a second line running east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.

    Adding a second track and the freight yards will significantly increase the network’s cargo-carrying capacity and facilitate increased industrial production. Project implementation is expected to take four years.

    State-owned SAR is also considering increasing the localisation of railway materials and equipment, including the construction of a cement sleeper manufacturing facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15684025/main.jpg
    Yasir Iqbal
  • PIF-backed firm signs worker accommodation deal

    17 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Smart Accommodation for Residential Complexes Company (Sarcc) has signed an agreement with Riyadh-based Mawref Company to develop a 12,000-bed worker accommodation project in North Riyadh.

    The project will cover about 120,000 square metres (sq m), with a total built-up area of 150,000 sq m.

    The development is expected to cost over SR669m ($178m), with the first phase slated for completion in 2029.

    Sarcc is backed by the Public Investment Fund (PIF), the Saudi sovereign wealth vehicle.

    The agreement follows Sarcc signing another agreement in September last year with privately-owned local firm Tamimi Global Company to explore collaboration in developing worker accommodation facilities in the kingdom.

    The PIF launched Sarcc in October 2024 with the aim of developing and operating staff housing and accommodation assets in the kingdom.

    Sarcc will develop and operate the staff accommodation facilities at major construction projects in Saudi Arabia.

    The company will seek opportunities to invest in the sector to strengthen staff housing standards. Sarcc will also look to engage the private sector by enabling investment and partnership opportunities in sectors including construction, catering, transportation and retail.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15672262/main.gif
    Yasir Iqbal