As the world races toward cleaner energy sources, green hydrogen is emerging as one of the leading fuels of the future. In the Kingdom, it is no longer just a matter of plans and ambitions: behind it is a major project with investments totaling SAR 31.5 billion. The governor of the National Development Fund spoke about the role of Saudi development funds in financing it.

What happened?
In his speech at the World Petroleum Congress, hosted by Riyadh for its 25th edition from October 11 to 15, 2026, National Development Fund Governor Abdulaziz Al-Arifi explained that the National Development Fund and the Saudi Industrial Development Fund had helped finance the green hydrogen project, in cooperation with local and international financial institutions. The project’s total investments amount to SAR 31.5 billion.

Al-Arifi noted that 12 development funds and banks work together under the umbrella of the National Development Fund to enable projects, expand investment opportunities, and develop national talent, supporting energy security and sustainability.

First: What is green hydrogen?
Hydrogen is the lightest element in the universe, and it can be used as a fuel without producing carbon dioxide when used.
But the way it is produced determines how “clean” it is, which is why its types are classified by color:
Grey hydrogen: Produced from natural gas, with carbon emissions released during production.
Blue hydrogen: Also produced from natural gas, but the resulting carbon is captured and stored.
Green hydrogen: Produced by splitting water into hydrogen and oxygen through electrolysis, using electricity from renewable sources such as solar and wind power. This process produces virtually no carbon emissions.

Hydrogen is used in heavy industries such as fertilizer production, steelmaking, and refining, and is considered a promising fuel for heavy transport, including trucks and ships.

Which project are we talking about?
The figure of SAR 31.5 billion matches the total investment value of the NEOM Green Hydrogen Project, which amounts to $8.4 billion. Saudi development funds have helped finance the project.
The project is an equal-share partnership among three entities: ACWA Power, US-based Air Products, and NEOM. It is located in NEOM’s Oxagon region and will use up to 4 gigawatts of solar and wind power to produce up to 600 tonnes of carbon-free hydrogen per day.

Transporting hydrogen is not easy. It is an extremely light gas, and liquefying it requires cooling it to around 253 degrees below zero. The project will therefore convert it into green ammonia, which is easier to transport and export. Air Products will purchase all of its output under an exclusive 30-year agreement.
According to reports published in August 2026, construction of the project has been completed and it has entered the commissioning phase. Commercial operations are targeted to begin in 2027.

How was the project financed?
Projects of this scale are not usually financed by a single entity. In May 2023, the project announced financial close—that is, the completion of the financing arrangements required to carry it out—with approximately $6.1 billion in funding from 23 local, regional, and international banks and investment institutions, including the Saudi Industrial Development Fund.
The participation of government development funds alongside commercial banks gives major projects greater credibility, particularly in new sectors that tend to carry higher risks, and encourages investors to take part in similar projects.

Why is the Kingdom betting on green hydrogen?
The Kingdom has the assets to become one of the world’s leading green hydrogen producers. These include:
Abundant sunshine and wind, as well as vast areas of land, enabling low-cost renewable electricity—one of the most important factors in the cost of producing green hydrogen.
A strategic location between Europe and Asia, which are expected to be among the largest markets for this fuel.
Long-standing expertise in producing and exporting energy, along with existing infrastructure to support it.

This direction also aligns with the goals of Vision 2030 to diversify the economy and sources of income, and strengthens the Kingdom’s presence in clean energy markets alongside its position in the oil and gas markets.

What is the role of the National Development Fund?
The National Development Fund serves as an umbrella for 12 development funds and banks, including the Saudi Industrial Development Fund, coordinating their efforts to enable projects, expand investment opportunities, and develop national talent.

In his speech, Al-Arifi put forward a notable idea: development financing should not be measured only by the volume of investment it attracts, but also by the opportunities it creates and its impact on people’s lives and the future of the economy.
He outlined achievements across the development finance ecosystem, including enabling strategic investments, developing infrastructure, increasing private-sector participation, supporting development projects in developing countries, improving essential services, and opening new avenues for economic growth.

More than just a new fuel
The NEOM Green Hydrogen Project is more than just a plant producing a new fuel. It is a model for how government development finance can work alongside banks and investors to turn a major ambition into reality. If commercial operations begin as targeted in 2027, the Kingdom will add a presence in a market expected to become one of the most important energy markets of the future to its standing in oil markets.

Note: This article is for informational purposes. It aims to explain the news in clear, accessible language. The information presented is drawn from published news sources and has been adapted and simplified; it does not represent the position or an official statement of any entity. This information may be updated after publication, so readers are advised to consult official sources for full details.