KfW IPEX-Bank, a major German bank, has recently announced its participation in the financing of the world’s largest green hydrogen project, currently under construction in Saudi Arabia. The project is being developed by NEOM Green Hydrogen Company and is located in Oxagon, within the Neom region of Saudi Arabia. With its own dedicated wind and solar farms, the facility aims to produce green ammonia on an unprecedented scale, targeting an annual output of 1.2 million tonnes upon its completion in 2026.
The total investment volume for this groundbreaking project exceeds $8.4 billion, with around $6.1 billion being provided as debt capital by a consortium consisting of 23 international and regional banks, as well as Saudi sovereign funds. KfW IPEX-Bank’s contribution to the financing amounts to $325 million, with a significant portion allocated to fund the electrolysers supplied by ThyssenKrupp Nucera from Germany. To cover this specific aspect, the German export credit agency Euler Hermes is involved. Acting as the Euler Hermes coordinator and agent, KfW IPEX-Bank plays a vital role in the overall financing structure.
The borrower, NEOM Green Hydrogen Company, is an equal joint venture between ACWA Power, Air Products, and NEOM. A key component of the project, the electrolysers are already the largest ever built, boasting a capacity of 20MW each. The plant’s impressive total output of 2.2GW is achieved by interconnecting 110 of these units.
Velibor Marjanovic, a member of the management board of KfW IPEX-Bank, emphasized the pivotal role of reliable green hydrogen production in global decarbonization efforts and the journey towards climate neutrality. Marjanovic expressed delight in contributing to this flagship project through the financing of cutting-edge German technology. This endeavor further demonstrates KfW IPEX-Bank’s commitment to driving forward global projects within the energy transition and promoting the export of European technologies.
The financing support provided by KfW IPEX-Bank and the consortium of banks and funds signifies the growing recognition of green hydrogen’s potential in revolutionizing the energy landscape. The project’s ambitious scale and integration of renewable energy sources highlight the commitment of stakeholders towards achieving a sustainable future and reducing greenhouse gas emissions. As the world eagerly awaits the completion of this monumental green hydrogen project, its success is expected to serve as a catalyst for further advancements in the field and inspire similar initiatives worldwide.
