RIYADH: Saudi-based NEOM Green Hydrogen Co. has signed finance agreements with several financial institutions amounting to $8.5 billion in order to finance its clean energy facility, according to a bourse filing.

The NEOM Green Hydrogen Project includes the development, financing, design, engineering, procurement, manufacturing, and factory testing of a world scale green hydrogen and green ammonia plant.

Under a 30-year green ammonia offtake contract with Air Products, the project will also comprise transportation, construction, erection, installation, completion, testing, commissioning, insurance, ownership, operation and maintenance of the facility.

NGHC is a joint venture between Public Investment Fund-backed power generation, renewable energy, and water desalination firm Air Products, and NEOM Co, and ACWA Power – which holds a 33.3 percent equity stake.

The total investment cost is funded by a combination of long-term debt and equity.

It is divided into $5.85 billion senior debt and $475 million mezzanine debt facilities, both of which are arranged on a non-recourse project finance basis.

The arrangement includes $1.5 billion from the National Development Fund on behalf of the National Infrastructure Fund.

In addition to this, the arrangement also includes $1.25 billion in the form of Saudi riyal-denominated financing from Saudi Industrial Development Fund.

The consortium of financiers from which the balance came from entails First Abu Dhabi Bank, HSBC, Standard Chartered Bank, Mitsubishi UFJ Financial Group, BNP Paribas, Abu Dhabi Commercial Bank, among several others.

Last year, during the Future Minerals Forum in Riyadh, NEOM’s CEO Nadhmi Al-Nasr announced the first phase of its green hydrogen facilities are set to come online in 2025.

Al-Nasr added that the company is also creating universities, which will specialize in technical research and innovation in new industries, specifically mining. 

NEOM is doing this to attract the best students in the world to come and be prepared for the research and innovation for the future of mining, Al-Nasr explained. 

“It is time for the mining industry to compete with the oil industry,” he said, adding: “Oil has made the big move to move to the next generation. We need the same in the mining sector.”