India’s Acme secures funding for Oman hydrogen project

Acme Group

• Facility to be constructed in Duqm special economic zone
• Deal follows Hydrom’s $10bn plan for two hydrogen plants
• Oman has awarded five green hydrogen projects worth $30bn

Indian renewable energy company Acme Group has secured a loan of $490 million to finance a green hydrogen and ammonia project in Oman.

The funding will come from Rec Limited, one of India’s largest green infrastructure financial institutions, and will be used for the first phase of the project.

The facility will be established at the special economic zone in Duqm.

It is expected to produce 100,000 metric tonnes of green ammonia annually in its starting phase and will then be expanded to 1.2 million tonnes per annum.

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Oman is scaling up its hydrogen ambitions. Last month Hydrom, a subsidiary of state-owned Energy Development Oman, signed agreements worth $10 billion to develop two new production projects that are expected to have a total production capacity of 250 kilotonnes per annum (ktpa). 

The special economic zone in Duqm will also host the world’s largest prospective green hydrogen facility.

A $6.7 billion contract for the plant was awarded in June to a global consortium led by South Korea’s Posco.

The group plans to break ground in 2027 and aims to complete mechanical construction in 2030. 

Oman, the Middle East’s biggest oil producer outside Opec, aims to develop 8.5 million tonnes per year of green hydrogen projects by 2050, with 1 million available by 2030, reaching up to 3.75 million by 2040.

The country is on track to become the largest exporter of hydrogen in the Middle East and the sixth largest globally by 2030, the International Energy Agency said last month.

Shashi Shekhar, vice-chairman of Acme Group, described the securing of debt for the Oman project as an “important milestone”. 

“We will start the construction activities soon and build one of the most advanced technologies and create a state-of-the-art facility,” Shekhar said.

Acme has ambitions to become a leading global green energy provider by 2030 with plans to produce 10 million tonnes of green ammonia and hydrogen per year.

Its entry into Oman follows the sultanate’s announcement last year that it aims to achieve net zero emissions by 2050.

Oman has so far awarded five large-scale green hydrogen projects, with a total investment of more than $30 billion and total production of 750 ktpa.

Hydrom will also launch the second bidding round of its green hydrogen auction process, offering up to three land blocks in Dhofar by the end of the first quarter of 2024.

The hydrogen agenda revolves around the Omani government’s establishment of a national hydrogen alliance, known as Hy-Fly.

Launched last August, it comprises 13 public and private organisations for facilitating the production of hydrogen energy for domestic use and export.

To support foreign companies looking at investing in the Omani alternative energy sector, the government has established a Directorate General for Clean Energy and Hydrogen at the Ministry of Energy and Minerals.

Last year, local media also reported that Oman will repurpose its gas pipeline system to transport green hydrogen, quoting OQ Gas Networks managing director Mansoor Ali Al Abdali.