Riyadh – Mubasher: The CEO of . confirmed Aqua PowerPaddy Badmentan, that the company is looking to expand in hydrogen projects similar to the company’s project in the Kingdom in two other countries.
Badmintan said, in an interview with “Al Arabiya” channel, today, Sunday, that these projects are the same size as the NEOM green hydrogen project.
He added, “It will be a huge project. Every project we are working on has the same size, which is 240,000 tons of green hydrogen, currently the best source of energy is converting hydrogen into liquid ammonia. So the project we are looking at is similar in nature and size to the NEOM project.”“.
Badminton expected that the second, third and fourth projects would appear, respectively, in the coming years, pointing to the years 2027 and 2028, and that the results of the projects would appear in 2028. He said: “There are many growth opportunities for ACWA Power.“.
Regarding supply chain disruptions, the CEO of ACWA Power confirmed that the company has not been affected so far, indicating that it has major projects under construction so that the contract is approved and signed while many materials are arranged early, but with time it may face Some challenges in particular with regard to logistics and the supply of some goods and services, but at the present time it does not face any significant challenges.
He continued, “Frankly, we faced a very difficult period during the Corona pandemic, at that time we faced many challenges, but we were lucky to be able to move forward with our projects. And in the year 2021 we started operating 10 projects in Saudi Arabia and the UAE.”“.
Badmentan indicated that over the past few years, ACWA Power has delivered between 5 and 10 projects each year, and no changes are expected in 2022, as some projects will start operating while others will be financially closed..
Badminton also said: “We expect to build distinctive projects this year.. Some of them will be completely built, such as the NEOM green hydrogen project, which is one of the very special projects for us. The NEOM project is very special, and I expect that it will bring other hydrogen projects behind it when it starts converting green hydrogen into liquid ammonia in the year 2026 and we are committed to this date.”
He pointed out that the company expects this project to be profitable when it starts selling green hydrogen in 2026.
With regard to financing, Badmantan said: “Financially, we have good financing currently by using the credit lines and funds available to us to invest in projects in the coming years. What is supposed to be considered in the process of financing these projects, is that 20% of these financings are shares, While the rest is debt, so 80% is financed through debt, which means that there is a great need to borrow always.For example, in the green hydrogen project, the financing exceeds $5 billion in debt, so every project we do is two billion.Every year we need regarding $10 billion of debt. debt, so there is always huge funding required for these projects.”
Badmentin said, “The good factors for us are through the debt structuring that we use, when we are done with the details of the project, we put a long-term financing plan for it, usually for 20 years so we set the interest rate in advance over the period, so we are not affected by the increase in interest rates. For projects that have started, but for new projects, we will borrow at a high interest, and then we may reverse this increase in fees that we will calculate in the projects, which will eventually reflect inflation.“.
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