RIYADH: Aimed at making Saudi Arabia a regional hub for clean energy, the Kingdom’s Public Investment Fund has signed a memorandum of understanding with the Japanese power generation company JERA Co. Inc. to develop green hydrogen projects and derivatives jointly. 

The deal will pave the way for both parties to undertake feasibility studies of such projects to cater to domestic and international markets, according to a press release.

JERA is Japan’s largest power generation company which operates across the entire supply chain, from fuel upstream and procurement to power generation.

The agreement is expected to further unlock synergies between the two companies by jointly leveraging the resources and capabilities in developing green hydrogen derivatives, including ammonia, the release added.

Moreover, the MoU will also expand business opportunities for both sides.

The PIF has been investing in green projects as the Kingdom aims to lead in addressing climate change. 

In October 2021, Crown Prince Mohammed bin Salman announced that Saudi Arabia would pledge to invest over $180 billion to support its sustainability targets. 

JERA, created through consolidating the fuel and thermal power departments of the Tokyo Electric Power Co. and the Chubu Electric Power Co., already has a regional presence, with a Middle East subsidiary established in the UAE in October 2021. 

Located in Dubai, JERA Middle East and Africa Management Co. Ltd. was set up to develop combined cycle power plants, large-scale renewable energy projects and green fuel production projects.

With existing gas-fired power and desalination projects in the Gulf Cooperation Council region, the company said it is actively pursuing new partnerships in the Middle East to expand its development of decarbonization projects.

It will also work with top companies in Japan and beyond to establish and expand supply chains for hydrogen and ammonia.

On the other hand, PIF is expanding its investments across sectors, including green hydrogen, renewable energy, energy efficiency, and waste management.

The move is part of its longer-term diversification strategy, actively developing projects that support the delivery of Saudi Arabia’s net-zero target. 

JERA’s deal with PIF follows another strategic collaboration agreement announced on Wednesday with the Abu Dhabi National Oil Co. for cooperation in the clean hydrogen and ammonia fields.