BY the end of 2026, Saudi Arabia (KSA) will be home to the world's largest operational, utility scale and commercially-based hydrogen facility powered entirely by renewables.

Located in the NEOM region in the northwest, the $8.4B NEOM Green Hydrogen Company (NGHC) - a joint venture owned equally by ACWA Power (a Saudi listed power generation developer and investor), Air Products (global supplier of industrial gases) and NEOM (PIF-backed developer of the futuristic megacity) - will produce 600 tonnes of carbon-free hydrogen daily, enough to power 20,000 hydrogen buses. For ease of transport, the 219,000 tonnes produced annually will be converted into 1.2 million tonnes of green ammonia.

Compared to many other projects globally, NGHC has considerable competitive advantages, combining the region's abundant natural resources, long-term supply arrangements and cutting-edge technology to produce lowcost green hydrogen at massive scale.

Among the advantages is the project's scale, enabled by the large land parcels secured by the Saudi authorities, and access to low-cost debt and strategic equity capital.

This is complemented by its location, which benefits from high year-round solar exposure and steady coastal winds, meaning NGHC can go all-in on its 4 GW of on-site renewable generation from day one, without the fossil fuel backup of other projects.

In addition, KSA's location at the crossroads of Europe, Asia and Africa offers a major trade advantage. NGHC will have access to a dedicated jetty for export in the Red Sea, so shipments will reach global customers faster and cheaper. Conversely, many hydrogen projects. retrofit industrial zones or compete for port space, creating bottlenecks.

Due to the project's scale and favourable power and water availability, it is expected that green hydrogen could be produced at costs lower than $3/kg and green ammonia at approximately $700/kg, which is highly competitive.

A defining characteristic of the project is the alignment between its stakeholders, with the equity providers bearing significant project risks. In particular, Air Products has a key role as a technology provider, the nominated contractor and offtaker, having signed an exclusive 30-year offtake agreement.

This long-term arrangement facilitated the securing of favourable debt terms. The project's total investment of $8.4B is funded by $2.3B of cash contributions and shareholder loans from the sponsors and $6.1B of non-recourse debt from 23 local, regional and international banks and financial institutions, one of the largest project financings under green financing principles. This includes $2.75B from the Saudi government.

NGHC demonstrates the feasibility and economic viability of large-scale green hydrogen production in Saudi Arabia. The joint venture showcases KSA's ability to form groundbreaking publicprivate partnerships and by leveraging KSA's renewable energy potential, the project aligns with domestic and global sustainability goals and sets a precedent for future green hydrogen projects.

For example, ACWA Power is already planning a second green hydrogen hub in Yanbu, another Saudi port city. This could be twice the size of NGHC and operational by 2030.

By replacing fossil-fuel-derived hydrogen and other conventional fuels,

NGHC is expected to cut up to 5 million tonnes of CO2 emissions every year - equivalent to taking more than one million cars off the road. This is a scale of impact that few hydrogen projects can match.

Moreover, the project will both directly and indirectly through future projects it inspires stimulate job creation, workforce upskilling, technology transfer and economic growth.

At present, the project has already created over 300 direct jobs, and by 2050 up to one million jobs could be created across KSA's renewable energy and infrastructure ecosystem. In addition, NGHC is actively recruiting women for leadership and technical roles and is collaborating with research, education and training institutions to prepare Saudis for future energy careers.

If the global hydrogen industry is still writing the opening chapters of its story, NGHC is already shaping the plot. This isn't just another entry in the green hydrogen race - it's a benchmark for what the sector can achieve when natural advantages, strategic vision, and industrial ambition align.

This article is a preview of a detailed report on the Inside Saudi website, www.insidesaudi.media.

(c) 2025 City A.M., source Newspaper