The budget has soared by 70% to $8.5bn for the NEOM green hydrogen mega-project that will tap massive green power capacity, a financial update from co-developer Air Products reveals. Inflation, spare parts, upfront fees for land and $1bn of interest on loans have all contributed to the $3.5bn budget increase, said the US industrial gases company, which is developing the project in the desert of northwest Saudi Arabia with partners ACWA Power, the Saudi renewables developer, and NEOM.
Breaking down the $3.5bn price hike, Air Products attributes $500m to inflation, $1.8bn to “project financing costs, upfront fees, interest during construction, additional joint venture costs, spares, land, etc”, and $1.2bn to “additional scope to make project more self-sufficient and lower operating costs”. This means services that the project partners now want to provide themselves, such as transmission lines and other infrastructure costs, according to an Air Products’ call with analysts.
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