Bloomberg reports that the Public Investment Fund intends to invest at least $10 billion to support production of clean hydrogen.
Reports indicate that Saudi Arabia’s Public Investment Fund plans to utilize it’s subsidiary, Energy Solutions Company (ESC) to invest at least $10 billion and potentially more to expand the Kingdom’s low-carbon hydrogen production.
Although it became a 6% shareholder in German electolyser maker, Thyssendrupp Nucera in June 2023, ESC has had a low profile to date. Nucera’s alkaline electrolysis system is being used for Saudi Arabia’s 2.2GW Neom-based green hydrogen project in partnership with industrial gas firm Air Products, renewables developer ACWA Power and the Saudi government.
According to Linkedin, former CEO of Thyssendrupp Uhde, Dr. Cord Landsman, will be heading ESC as it ramps up activities.
The Bloomberg report noted that while hydrogen burns without releasing carbon, “producing green hydrogen is enormously expensive and its detractors point to the huge costs and time required to build infrastructure in importing countries. It’s also tricky to transport safely. Few potential buyers are therefore willing to sign long-term contracts to receive the fuel and many planned projects have stalled as a result. Saudi Arabia is home to one of the few large-scale green hydrogen projects in the world to start construction. One of the $8 billion project’s equity partners agreed to buy its full output, clearing a major hurdle for the plans.”
PIF and ESC’s prospective increased involvement with Saudi Arabia’s clean energy initiatives will include Saudi Aramco which ultimately wants to provide 15% of blue hydrogen production globally.
PIF has also signed an MOU with French multi-national power company Engie SA to develop green hydrogen projects.
“The fund is also integrating hydrogen into various industries such as automotive and steelmaking through partnerships and direct ventures. Notably, PIF’s issuance of green bonds totaling billions reflects its commitment to low carbon energy production. With a focus on renewable energy, PIF aims to boost solar and wind energy to constitute 50% of the local grid by 2030, with potential inclusion of hydrogen. The fund continues to make substantial investments in green projects, anticipating over US$10 billion by 2026, signaling a significant step towards sustainable development. PIF’s interest in hydrogen extends beyond Saudi Arabia, with investments and partnerships in countries like Egypt, Uzbekistan, Jordan, Indonesia, and Brazil. Partnerships with companies like ACWA and JERA highlight the fund’s global approach to green hydrogen projects, emphasizing both domestic production and international commercial opportunities.”
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