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Neom Green Hydrogen mulls next phase

23 November 2023

 

Neom Green Hydrogen Company (NGHC) received the first set of wind turbines for one of the two renewable energy plants that will power its integrated green hydrogen and ammonia production facility in early October.

The initial panels for the project’s solar power plant and hydrogen storage tanks are expected to arrive soon. The first air separation units, meanwhile, will be delivered in the first quarter of 2024.

“We are on track to meet our 2026 target commercial operation date, with the first ammonia production expected sometime between mid to late summer of 2026,” David Edmondson, CEO of NGHC (pictured), tells MEED.

Announced in the summer of 2020, the region’s first, and probably the world’s largest, green hydrogen and ammonia production facility reached financial close in May this year. The project required a final investment of $8.4bn.

“The decision to develop the project was made in 2019 in the strong belief that there would be a market for green hydrogen,” explains Edmondson.

“Having Air Products was certainly a major factor in that decision because of their hydrogen knowledge and experience. They already have an existing infrastructure for the production and distribution of hydrogen, including for mobility.”  

The US-headquartered industrial gases firm, Saudi utility developer and investor Acwa Power and Public Investment Fund-backed Neom equally own NGHC.

The scale of the integrated project is unprecedented. It will require over 4GW of wind and solar power and 400MW of battery energy storage systems. A 190-kilometre electricity transmission grid will link these to a 2GW electrolysis plant in Neom’s Oxagon industrial city.

The plant will produce up to 600 tonnes of hydrogen daily, which will be converted into roughly 1.2 million tonnes of ammonia a year. Air Products will ship the ammonia to Europe to be cracked back to hydrogen for mobility applications.

Despite some pushback on the business model's efficiency and the feasibility of green hydrogen applications in transport and mobility, Edmondson assures MEED that years of due diligence and compliance with EU carbon intensity policies support the business case. Twenty-three banks are financing the project, he points out.

“The NGHC plant is designed to ensure that the carbon intensity of the end product will be beneath the required threshold in Europe,” he says.

Edmondson acknowledges the premium costs currently involved in a low-carbon-intensity supply chain. However, this is expected to change as companies implement their net-zero commitments and suppliers scale their production to meet rising demand.

Air Products’ key role

In addition to being the exclusive offtaker for over 30 years for the green ammonia produced at the plant, Air Products is also the project’s main engineering, procurement and construction (EPC) contractor.

The firm’s triple role as an equity investor, EPC contractor and offtaker ensures that “we keep the focus on lowest cost of green hydrogen or ammonia”, notes Edmondson.

“Despite being the EPC contractor and a major investor in NGHC, Air Products’ primary objective is to generate revenue out of selling the ammonia that they have agreed to offtake from NGHC, not through the EPC contract,” he adds.

Phase two

With construction well under way for the integrated Neom green hydrogen and ammonia project, NGHC and its shareholders are now looking at a potential second phase.

“The Neom green hydrogen project is not expected to be a single investment,” says Edmondson.

“With all the ammonia to be produced at the plant under construction already sold to Air Products, there remains an interest in looking at additional investments for both the export market as well as the local market requirements for green hydrogen.”

Neom, which aims to be carbon-free and 100 per cent powered by renewable energy, is considering alternative fuels such as green hydrogen to achieve that goal.

Potential applications include mobility, given the plan to develop a rail system and other modes of transport for Neom.

“There was no domestic demand for green hydrogen fuel when the project was originally conceived in 2019. The market is continuing to evolve and we now see a stronger business case for local supply of green hydrogen,” says Edmondson.

The next phase is envisaged to be another large-scale project addressing domestic and international demand for green hydrogen and green ammonia.

Edmondson says more serious discussions about the project’s next phase will be on the agenda in 2024.

Ongoing innovation

The groundwork for the more widespread adoption of green hydrogen in Neom and across Saudi Arabia is under way.

In 2024, Neom’s energy and water subsidiary Enowa will open the Hydrogen and Innovation Development Centre (HIDC), which aims to produce and adopt decarbonised and clean synthetic fuels in partnership with Saudi Aramco. 

Initially, the NGHC project at the HIDC will gather operational data from the facility’s first 20MW electrolyser from Germany’s ThyssenKrupp Nucera, which will be used at the NGHC plant.

This will help advance Enowa’s plans with Air Products Qudra to test advanced hydrogen fuel cell-based mobility and logistics solutions at Neom. 

Neom factor

As a trailblazing project, Edmondson recognises the many opportunities that Neom has provided.

“We have had excellent support from Neom on both our land and permitting requirements as we have developed the project,” he says.

“We have also benefitted from legislation that allowed the first private grid in the kingdom and were granted the first industrial licence in Saudi Arabia for a green hydrogen plant.

“Neom has certainly risen to the challenge of supporting investors to make the project a reality.”

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Jennifer Aguinaldo

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    Awards also exceeded project completions by a ratio of 2.5:1, generating a $60bn positive net change and lifting the value of projects under execution by 25%.

    Qatar has the region’s most bullish real GDP outlook, with its 2.9% growth in 2025 expected to accelerate to 6.1% in 2026, driven by a liquefied natural gas expansion and rising non-oil output. The projects market is also strengthening again after the post-2022 World Cup lull. Awards increased by 24% in the past 12 months, rising to 30% above the 10-year average and expanding the value of projects under execution by 8%.

    The UAE remains the region’s strongest economic performer, with real GDP expected to grow by 4.8% in 2025 and 5% in 2026

    Kuwait follows with a robust 2026 growth forecast of 3.9% and double-digit current account and fiscal surpluses (before contributions to the Future Generations Fund).

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    Even so, the projects market remains buoyant, with award activity still 65% above the 10-year average – driving up the value of projects under execution by 8% in the past year.

    Rising fortunes

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    Morocco's projects market has stabilised at around $10bn in awards for the second year running – double the long-term average

    Jordan is set for just 2.9% real GDP growth in 2026, and continues to face severe fiscal pressures. However, January saw the landmark award of the $6bn Aqaba-Amman water desalination and conveyance scheme – by far the largest project in Jordan and expected to stimulate activity across industrial supply chains. Financial close for the scheme is anticipated by early 2026.

    Struggling economies

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    About the index

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    This package also includes: Saudi real estate to surge in 2026
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    Saudi Arabia’s real estate market continued to gather momentum at the Cityscape Global 2025 event, with a record SR237bn ($63.1bn) of deals signed.

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    The headline of the event was the series of agreements worth billions of dollars signed by Saudi Arabia’s National Housing Company (NHC) with many local and international firms.

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    The headline of the event was the series of agreements … signed by Saudi Arabia’s NHC

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    A SR525m ($140m) contract was awarded to local firm Zaid Alhussain & Brothers Group for infrastructure works in the Khuzam area north of Riyadh, while Saleh Abdulla Almahana Company secured a SR651m ($173m) contract to build 1,290 units for the Rose House project in Al-Ahsa.

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    NHC also announced the construction of 1,085 villas within the Al-Ghoroub project in Medina.

    More announcements

    NHC’s signings were complemented by further deals announced by major developers and government entities.

    > Diriyah: Saudi gigaproject developer Diriyah Company awarded two construction contracts with a combined value of over SR5.7bn ($1.5bn) on the sidelines of the event.

    The first, valued at about $800m, was awarded to the local BEC Arabia Contracting Company for the construction of offices in the Media and Innovation district of the Diriyah development. Within the same district, BEC Arabia will also build residential assets on the Manazel Al-Hadawi plots.

    The other contract, estimated to be worth $900m, was awarded to local firm Almabani General Contractors for the main construction works on King Khalid Road.

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    > Urubah Investment: Local firm Urubah Investment unveiled a 53-floor residential and commercial tower in Riyadh’s Al-Yasmin district, with a built-up area of 160,000 sq m.

    > Zood Real Estate: The firm announced the launch of a 10-tower mixed-use project on Riyadh’s Northern Ring Road.

    > Ajdan Real Estate: The developer launched the Ajdan Infiniti complex and signed a financing agreement with Alawwal Bank. It also launched the Ajdan Towers project in Riyadh.

    > Masar: Jeddah-based Masar sold three plots of land in its Masar Destination in Mecca for the construction of residential and hotel towers, with investments reaching SR1.6bn ($426m). It also signed an agreement for two plots for the development of two residential towers, with investments exceeding SR1bn ($266m). 

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    > Mohammad Al-Habib: The developer launched a $1.3bn mixed-use project in the north of Riyadh.

    > Al-Awaly: Jizan-based firm Al-Awaly announced signing a contract to establish Jazan Water City on an area of 114,000 sq m with an investment value of SR200m ($52m).

    > Alothaim: The firm announced the launch of three mixed-use projects in Dammam, Medina and Khamis Mushait.

    > Al-Majdiah Development: The firm signed a memorandum of understanding (MoU) with Alinma Bank to develop financing solutions that support its future projects.

    > Roshn Group: The Saudi gigaproject developer signed partnership agreements for educational and residential developments and the localisation of supply chains. These include an MoU with the UK’s Cognita Schools to develop a private school in its Sedra residential community in Riyadh.

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    > Saudi Real Estate Refinance Company: The firm signed an agreement with Al-Rajhi Bank to purchase two real estate financing portfolios worth SR10bn ($2.6bn).

    > Osus Real Estate: The developer launched two mixed-use projects in the Al-Malqa and Al-Qayrawan districts of Riyadh, with a total investment of about SR3bn ($800m).

    > Liwan Real Estate: The firm launched a 151,300 sq m project comprising 2,500 residential units, along with a hotel, offices and commercial facilities, at an investment of SR4.5bn ($1.2bn).

    > Kooheji Developments: The firm launched a three-tower development with 1,250 units, located in Al-Khobar.

    > Bank Albilad: The bank launched a SR4.4bn ($1.1bn) fund to develop a mixed-use project in the Qurtuba district of Riyadh.

    > SAB Invest: Together with Dallah Health and Aljazira Capital, SAB Invest will develop medical, commercial and hotel facilities near Dallah Al-Nakheel Hospital in Riyadh at an investment of SR1.2bn ($319m).

    > Heyazah: The firm announced a mixed-use project spanning 103,000 sq m in the vicinity of King Salman Park in Riyadh.

    > Riyad Capital: The investment company launched a SR1.7bn ($453m) fund to develop the One Mountain View project, featuring over 500 villas in the north of Riyadh.

    > Al-Basateen: The developer launched the Al-Basateen Tower project at the intersection of Riyadh’s Northern Ring Road and King Fahd Road.

    > Alinma Bank: The bank launched a fund worth SR3bn ($800m) to develop 2.7 million sq m of land in the Al-Janadriyah district of Riyadh.

    READ: Saudi real estate to surge in 2026 

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  • Saudi real estate to surge in 2026

    29 December 2025

     

    This package also includes: Investors focus on residential sector for new deals
    Deals worth $63.1bn were signed at the Cityscape Global 2025 property show in Riyadh

    After nearly a decade of Saudi sovereign wealth vehicle the Public Investment Fund (PIF) taking on the delivery burden of the kingdom’s largest projects, Riyadh is now turning to private sector real estate developers to help deliver its ambitions. 

    The shift reflects both opportunity and necessity. The PIF-led model has enabled Saudi Arabia to fast-track its gigaprojects and anchor Vision 2030’s transformation objectives. Riyadh is now looking for the private sector to maintain this momentum.

    Opening the market

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    The law allows non-Saudi individuals and companies to own, lease and use property in designated areas, subject to restrictions by type and location. Foreign residents can own one home for personal use outside restricted zones, excluding Mecca and Medina. 

    Meanwhile, companies with foreign shareholders can acquire real estate across the kingdom, including in Mecca and Medina, provided it is for business purposes or employee housing and in line with financial regulations. 

    The intention is to help Saudi Arabia tap into international property demand – as Dubai has done – to boost foreign direct investment (FDI). 

    In 2024, the kingdom attracted SR119bn ($31.7bn) in FDI, up 24% year-on-year and 37% above earlier estimates, but still short of the $100bn annual target for 2030. 

    Manufacturing led inflows with SR35bn, followed by wholesale and retail trade, construction and financial and insurance services. Real estate did not feature among the top-performing sectors, underlining the potential for growth.

    Land and finance

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    Key provisions include an annual white land tax of up to 10%, with zones graded between 10% and 2.5%; a vacant building fee of up to 5%, potentially rising to 10%, subject to approval by Saudi Arabia’s Council of Ministers; and the classification of cities according to supply-demand conditions and development needs. 

    The white land tax is likely to have a dual effect. It should prompt some landowners to bring idle plots into development, sell to active developers or enter into partnerships, thereby alleviating a long-standing structural bottleneck in Riyadh and other major cities. At the same time, it introduces a new cost for holding undeveloped land, which will need to be priced into feasibility studies and could initially push some asking prices higher as owners seek to pass on part of the burden.

    Over time, if enforcement is seen as consistent and predictable, the white land tax could help normalise more active land markets and support the private sector’s expanded delivery role. But 2026 is likely to be a transitional year, with a mix of opportunistic sales, legal challenges and recalibrated land valuations.

    The government has also intervened directly in the rental market, most notably with a rent freeze in Riyadh. 

    In response to double-digit rent increases in some districts, driven by non-oil growth, gigaprojects and corporate relocations, the authorities have imposed a five-year suspension of annual rent increases for residential and commercial leases in the capital.

    For tenants, the freeze offers immediate relief and increases predictability, particularly for middle-income households and small businesses exposed to volatile rents. It also serves as a counterweight to fears that opening the market to foreign buyers in 2026 will drive another surge in rental prices.

    For investors and developers, however, the impact is more challenging. Compressed rental growth in Riyadh reduces the upside on income-producing assets, especially where financing structures assumed steady nominal increases. 

    Running alongside these regulatory reforms is a quieter but significant development in real estate finance: the launch of Saudi Arabia’s first residential mortgage-backed securities by PIF subsidiary the Saudi Real Estate Refinance Company. This new asset class aims to enhance liquidity in the housing finance market and diversify investment opportunities.

    In the longer term, a thriving, diversified real estate sector underpinned by such instruments can support the development of a broader ecosystem of mortgage issuers, servicers and investors, reducing systemic risk and broadening access to housing finance.

    As the kingdom takes deliberate steps to open its market to foreign buyers, mobilise idle land, protect tenants and strengthen financial infrastructure, much will depend on execution. If the new foreign ownership rules are applied effectively, 2026 could mark the start of a more sustainable, private sector-led growth phase. If not, uncertainty could dampen the very investment the reforms aim to attract. 

    READ: Investors focus on residential sector for new deals

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    Colin Foreman
  • Navigating financial markets amid geopolitical fragmentation

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    As we move towards 2026, geopolitical fragmentation is no longer a background risk that occasionally disrupts markets.

    It has become a defining feature of the global financial landscape. Shifting alliances, persistent regional tensions, sanctions and the reconfiguration of supply chains are reshaping how capital flows, how liquidity behaves and how confidence is formed.

    For firms operating in the Middle East, this does not simply mean preparing for more volatility. It means operating in a system where the underlying rules are evolving.

    For much of the past three decades, businesses and investors worked within a broadly convergent global framework. Trade expanded, financial markets deepened and policy coordination – while imperfect – created a sense of predictability. That environment has changed.

    Today, economic decisions are increasingly influenced by strategic alignment, security considerations and political resilience. Markets still function, but they do so in a more fragmented and less forgiving way.

    Shifting landscape

    One of the most important consequences of this shift is that risk no longer travels along familiar paths. In the past, geopolitical events were often treated as temporary shocks layered onto an otherwise stable system.

    Today, they shape the system itself. Trade flows are influenced as much by political compatibility as by cost efficiency. Supply chains, once optimised for speed and scale, are reorganising into regional or allied clusters. Financial markets respond not only to data, but to narratives about stability, alignment and long-term credibility.

    This change places greater pressure on firms that rely on historical relationships to guide decisions. Models built on past correlations – between interest rates and equity markets, or between energy prices and regional growth – are less reliable when markets move between different regimes. The challenge is not simply higher volatility, but the fact that correlations themselves can shift quickly.

    Monetary policy adds a second layer of complexity. Major central banks are no longer moving in step. The US, Europe and parts of Asia face different inflation dynamics and political constraints, leading to diverging interest-rate paths.

    For the GCC, where currencies are largely pegged to the US dollar, this divergence has direct consequences. Local financial conditions are closely tied to decisions taken by the Federal Reserve, even when regional economic conditions follow a different cycle.

    This matters because funding costs, liquidity availability and hedging conditions are shaped by global rather than local forces. When US policy remains tight, dollar liquidity becomes more selective. When expectations shift abruptly, market depth can disappear quickly.

    For firms with international exposure, long-term investment plans, or reliance on external financing, these dynamics require careful management. They cannot be treated as secondary macro considerations.

    Energy markets further complicate the picture. The Middle East remains central to global energy supply, which means geopolitical events often interact with oil prices and financial conditions at the same time.

    When shifts in energy expectations coincide with changes in global interest-rate sentiment, liquidity conditions can tighten rapidly. This interaction is well known in academic research on fixed exchange-rate systems, but its practical implications are often underestimated in corporate planning.

    Expanding vulnerabilities

    These dynamics expose clear vulnerabilities. Concentrated supply chains are more susceptible to disruption. Financing structures dependent on continuous market access are more exposed to sudden repricing. Risk management approaches that assume stable relationships between assets are more likely to disappoint. Operational risks – particularly in technology and data – are increasingly shaped by geopolitical considerations rather than purely technical ones.

    At the same time, the region enters 2026 from a position of relative strength. GCC economies benefit from fiscal buffers, long-term investment programmes and a growing perception of stability compared to other parts of the world. In an environment where uncertainty is widespread, predictability itself becomes valuable. Capital increasingly seeks jurisdictions that combine economic ambition with institutional credibility.

    The question, therefore, is not whether opportunities exist, but whether firms are prepared to capture them responsibly. This requires a shift in how future risks are assessed and embedded into decision-making. Linear forecasts and static plans are insufficient when the environment itself can change state. Scenario thinking must evolve beyond optimistic and pessimistic cases to reflect different combinations of geopolitical alignment, monetary conditions, and supply-chain stability. These scenarios should inform capital allocation, not sit in strategy documents.

    Liquidity and risk management discipline also become central. In both trading and corporate finance, experience shows that many failures stem not from being wrong on direction, but from being overexposed when conditions change. Scaling risk to market conditions, maintaining funding flexibility and understanding how quickly liquidity can evaporate are essential practices. This is as true for corporate balance sheets as it is for trading books.

    Operational resilience must be viewed through the same lens. Supply-chain redundancy, cybersecurity preparedness and data governance are no longer purely operational concerns. They influence financial stability, investor confidence and regulatory trust. In a fragmented world, operational disruptions can quickly translate into financial and reputational damage.

    Facing the future

    As we approach 2026, leadership in the Middle East faces a clear test. The global environment is unlikely to become simpler or more predictable. Firms that continue to rely on assumptions shaped by a different era will find themselves reacting rather than positioning. Those that invest in disciplined risk management, flexible planning and operational resilience will be better placed to navigate uncertainty and to turn volatility into strategic advantage.

    In this environment, risk management is not an obstacle to growth. It is the framework that makes sustainable growth possible.

    Ultimately – and this is an often overlooked critical point – none of these adjustments, whether in scenario planning, liquidity discipline, or operational resilience, can be effective without the right human capital in place. 

    Geopolitical fragmentation and financial volatility are not risks that can be fully addressed through models or policies alone. They require informed judgement, institutional memory and the ability to interpret weak signals before they become material threats or missed opportunities. 

    Firms that succeed in this environment will be those that deliberately invest in corporate knowledge: building internal capabilities where possible and complementing them with external expertise where necessary. This means involving professionals with the right background, cross-market experience and a proven, proactive approach to risk awareness and governance. 

    In a fragmented world, competitive advantage increasingly depends not only on capital or strategy, but on the quality of people entrusted with understanding risk, challenging assumptions and guiding decision-making under uncertainty.

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  • Oman’s growth forecast points upwards

    24 December 2025

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    MEED Editorial