ACWA Power says construction starts on NEOM green hydrogen project

Logo of ACWA Power Co. 

ACWA Power Co. said that the construction phase of NEOM green hydrogen project began after the limited notice to proceed (LNTP) was signed to proceed with the engineering, procurement and construction agreement for the $900 million project.

In the investor presentation to discuss Q1 2022 financial results, ACWA Power said that it faced some disruption in a high-cost environment, exacerbated by conditions in Ukraine where transportation routes were affected, in addition to sanctions that put additional pressure on already high costs and shortages of materials.

This may affect the company's under-construction projects in Uzbekistan as well as advanced development projects in Uzbekistan and Azerbaijan, it noted.

ACWA Power also indicated that it is generally considered protected, thanks to its business model, where such risks are usually distributed either to the engineering, procurement and construction contractors or to the purchase contractors. This, however, is not sufficient to overcome the high costs, it noted.

It explained that there is a need for a more sustainable solution, pointing out that the company is working with partners and stakeholders to find practical solutions, and that the situation may eventually impact its projects.

ACWA Power's profit rose 9% to SAR 151.9 million in Q1 2022, compared to SAR 139 million.