Saudi Arabia’s ACWA Power Signs $4B Green Hydrogen Deal in Egypt

December 22, 2023

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by Jack Dutton (Al-Monitor) The second phase of the project could produce 2 million metric tons per year, the statement said, without providing details on the timeline. -- Saudi Arabia’s ACWA Power has signed an agreement to develop a $4 billion green hydrogen project in Egypt, with the first phase of the initiative expected to produce 600,000 metric tons (mt) of green ammonia per year, the company said in a statement Wednesday.

The agreement by the Saudi-listed company and The Sovereign Fund of Egypt, the Suez Canal Economic Zone, the Egyptian Electricity Transmission Company, and the New and Renewable Energy Authority follows a memorandum of understanding signed on the project on Dec. 7.

The second phase of the project could produce 2 million mt per year, the statement said, without providing details on the timeline.

The signing in the North African country took place in the presence of Egyptian Prime Minister Mostafa Madbouly, Electricity Minister Mohamed Shaker and Saudi Ambassador to Egypt Ayman Soliman. The CEOs of the companies involved were also there.

The agreement lays out the development of the first phase of the green ammonia project with 600,000 mt produced per year powered by wind and solar plants.

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ACWA Power now has five renewable energy projects in Egypt.

The company is also developing the NEOM green hydrogen project, which will be the world’s first utility-scale green hydrogen plant in the northwest of Saudi Arabia. The facility is expected to produce 1.2 million mt of green ammonia per year.

At the COP28 climate conference in the United Arab Emirates earlier this month, ACWA Power signed agreements to develop green energy projects with Indonesia and Jordan. READ MORE

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During his meeting with the CEO of Saudi ACWA Power: The Prime Minister reviews the timetable for a new green hydrogen project with investments exceeding $4 billion. (Government of Egypt (Google Translation))
CEO of NEOM Green Hydrogen Co.: Plant Construction Making Significant Progress (AAWSAT)
Egypt to Extend ACWA Power MoU, Allocates Land for ACURE Green Ammonia Project (Egypt Oil & Gas Group)

Excerpt from AAWSAT: The CEO of NEOM Green Hydrogen Co. has announced progress on building the world’s largest hydrogen plant in Saudi Arabia’s NEOM region.

Wesam Al-Ghamdi revealed that the construction of the plant in NEOM’s city of “Oxagon” is advancing significantly.

Speaking to Asharq Al-Awsat, Al-Ghamdi revealed that his company received initial supplies and is now focusing on installation, expecting more deliveries this year.

The CEO reaffirmed that he aims for significant construction progress this year, gearing up for full operations by 2026.

Al-Ghamdi referenced the company’s notable accomplishment in 2023, reaching full financial closure in May of the previous year after securing a total funding of $8.4 billion.

The CEO highlighted the importance of getting started at the NOEM green hydrogen complex. He mentioned that even though it’s in the early stages with support from ACWA Power, Air Products, and NEOM, the funding has helped speed up construction.

He emphasized how this financial backing shows confidence in the project’s economic value and its goal of creating the biggest hydrogen plant globally.

Hydrogen Production

Al-Ghamdi explained that in 2023, the company focused on completing basic construction works to prepare for receiving key supplies at their NEOM site. The first six wind turbines arrived in October at NEOM’s port in “Oxagon,” a city focused on clean industries.

He stressed his company’s confidence in scaling up green hydrogen production at the lowest cost possible by 2026. Saudi Arabia aims to lead globally in hydrogen production and exports, aligning with green initiatives. The target is to produce 4 million tons of clean hydrogen annually by 2030.

Saudi Arabia Leading in Green Hydrogen

Al-Ghamdi predicted that Saudi Arabia will take the lead in producing green hydrogen soon, tapping into its vast experience and natural resources like wind and solar power.

He stressed that the NEOM green hydrogen project aims to play a big role in achieving this ambitious goal.

Once operational, the plant is expected to churn out 600 tons of carbon-free hydrogen daily by 2026, enough to power around 20,000 hydrogen buses.

It also plans to produce 1.2 million tons of green ammonia yearly for global export. The company will have a special pier for shipping the hydrogen as ammonia directly from its site.

Al-Ghamdi highlighted the project’s importance, saying it aligns with the goals of Saudi Arabia’s national transformation plan, Vision 2030, and will help remove carbon from major sectors like transportation and heavy industries.

NEOM Green Hydrogen Project Leads in Full Funding

Al-Ghamdi highlighted that while many green hydrogen projects globally are still in early planning, the NEOM one stands out as the only project fully funded. This achievement came through an exclusive deal with Air Products to buy all their green hydrogen output for export over three decades.

Al-Ghamdi noted that the emerging green hydrogen sector offers significant global opportunities. NEOM Green Hydrogen aims to showcase these opportunities by proving the economic feasibility of large-scale green hydrogen production and its potential for extensive growth.

Clean hydrogen is increasingly seen as a key solution to combat climate change. As countries strive for carbon neutrality, clean hydrogen is expected to play a vital role in speeding up the transition to cleaner energy and industries, providing the only viable way to remove carbon on a large scale.

NEOM Green Hydrogen Plant Aims to Offset 5 Million Tons of CO2 Annually

Al-Ghamdi affirmed that the plant, upon full operation by 2026, aims to offset up to 5 million tons of carbon dioxide annually.

Clean hydrogen is seen as crucial in addressing emissions from industries heavily reliant on it, such as transportation and heavy machinery.

The CEO emphasized its potential for remote areas where continuous operation is vital, like around-the-clock trucking.

Moreover, Al-Ghamdi highlighted that hydrogen combustion solely produces water vapor, making it a carbon-free end product. In addition to its environmental benefits, the NEOM green hydrogen plant aims to foster international collaboration and invest in clean energy technology. READ MORE

Excerpt from Egypt Oil & Gas Group: (November 2, 2026) Egypt’s National Council for Green Hydrogen has approved a one-year extension of its memorandum of understanding (MoU) with Saudi Arabia’s ACWA Power for its planned East Nile project, which will produce 66,000 tons of green hydrogen and 500,000 tons of green ammonia.

In December 2023, ACWA Power, the world’s largest private water desalination company and a green hydrogen pioneer, signed a framework agreement following its 2022 MoU to develop Egypt’s first green hydrogen phase. With an investment exceeding $4 billion, the initial phase aimed to produce 600,000 tons of green ammonia per year, with plans for a second phase expanding capacity up to 2 million tons annually.

Prime Minister Mostafa Madbouly chaired the council’s meeting, attended by Karim Badawi, Minister of Petroleum and Mineral Resources, Mahmoud Esmat, Minister of Electricity and Renewable Energy, and other ministers and government officials.

The council also approved allocating a 12-square-kilometer (km²) plot in West Zaafarana to India’s ACURE to develop a 600-megawatt (MW) solar power plant supporting the pilot phase of its green ammonia project.

The solar facility will supply electricity to the project’s initial phase, which targets annual production of 100,000 tons of green ammonia. The wider project is planned to reach a production capacity of one million tons per year through successive phases.

The meeting reviewed the implementation status of agreements signed with international companies and discussed developing an integrated framework to address challenges facing green hydrogen projects, through coordination among the relevant ministries and government authorities.

The decisions form part of Egypt’s efforts to establish itself as a regional hub for low-carbon hydrogen and its derivatives. In February 2024, Egypt approved its National Low-Carbon Hydrogen Strategy, setting out plans to gradually expand domestic hydrogen use, increase production capacity, and develop export markets. The strategy also targets renewable energy accounting for more than 42% of the country’s electricity mix by 2030.

To attract investors, Egypt introduced Law No. 2 of 2024, which introduced incentives for low-carbon hydrogen and derivative production projects, granting developers up to 55%, VAT exemptions on equipment and exports, discounted seaport and maritime services, and various non-tax benefits.

The government has also signed multiple agreements with international developers. In February 2024, it announced seven cooperation agreements covering green hydrogen, green ammonia, and renewable energy projects, with anticipated investments exceeding $40 billion over 10 years. READ MORE