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PIF’s new venture to invest $10bn in green hydrogen

By Pramod Kumar
Water, Waterfront, Barge Neom
Neom Green Hydrogen Company received its first delivery of wind turbines in October 2023. The project is key to Saudi Arabia’s ambitions to become the world’s leading hydrogen producer

Saudi Arabia’s Public Investment Fund (PIF) has established a new entity to invest an estimated $10 billion into the production of green hydrogen.

The new subsidiary, Energy Solutions Company, will focus on funding the development of low-carbon fuel, Bloomberg reported, quoting unnamed sources.

The investment is estimated to grow significantly in the coming years, driven by increasing demand for hydrogen and a robust project pipeline.

The sources said some of the investment will be made in collaboration with Saudi Aramco. 

The venture is expected to be led by former Thyssenkrupp Uhde chief executive officer Cord Landsman. The formal launch of Energy Solutions Company is expected later this month.

In June Saudi Arabia’s minister of investment Khalid Al Falih said it was preparing to announce a line-up of hydrogen projects to be managed by PIF as part of its broader transition strategy.

In March Saudi-listed Acwa Power announced that a combination of long-term debt and equity will fund the $8.5 billion Neom Green Hydrogen Project – key to Saudi Arabia’s ambitions to become the world’s leading hydrogen producer.

French utilities firm Engie and Saudi Arabia’s Public Investment Fund signed an initial agreement in July last year to develop green hydrogen projects in the kingdom.

At least 17 countries and the EU have already developed hydrogen strategies, while around 20 others are currently formulating their policies. 

The hydrogen rainbow

  • Green hydrogen is produced on a carbon-neutral basis through water electrolysis. 
  • Turquoise hydrogen is created when natural gas is broken down into hydrogen and solid carbon with the help of methane pyrolysis.
  • Blue hydrogen is generated from the steam reduction of natural gas. 
  • Grey hydrogen is obtained by steam reforming fossil fuels such as natural gas or coal. 
  • Sometimes other colours are ascribed to hydrogen, based on how it is produced. For red, pink and violet hydrogen, the electrolysers are driven by nuclear power. 
  • Yellow hydrogen is hydrogen produced from a mixture of renewable energies and fossil fuels. 
  • White hydrogen is a waste product of other chemical processes, while the use of coal as a fuel produces brown hydrogen.

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