HD Hyundai Electric wins $51 mn deal to power Neom megacity

HD Hyundai Electric Co., the electrical equipment and energy solution company under South Korea’s shipbuilding giant HD Hyundai Co., has won a 67.8 billion won ($51 million) deal to supply substation equipment for Saudi Arabia’s smart and green city Neom, the Korean company announced on Monday.

Under the contract signed with Al Gihaz Contracting Company Saudi Arabia on Sunday, the Korean company will provide transformers, high-voltage circuit breakers and reactors in a package for the Saudi Arabian power company’s substation project dubbed Neom Mountain by February 2025.

The two companies have discussed detailed terms to reach the final deal, the Korean company explained.

HD Hyundai Electric hopes the latest deal will pave the way for other major electricity generation and distribution infrastructure deals in the oil-rich country that is seeking to reduce its reliance on black gold for revenue with major futuristic city and infrastructure projects backed by smart and green technologies.

Neom is one of those cities under development in a desert area in the kingdom’s northern Tabuk Province.

It is a smart city to be fully run on renewable energy such as solar power and green hydrogen, as well as cutting-edge technologies, such as 5G networks, the Internet of Things, cloud computing and robotics.  

The Neom Mountain would be the second substation in the green, smart city once it is built.

VISION 2030, A WINDOW OF OPPORTUNITY  

Under its Vision 2030 initiative, the Saudi Arabian government has set a goal to expand the state’s total power output to 120 gigawatts (GW) by 2030, of which 58.7 GW will be sourced from renewable energy.

Korean firms are hoping to join various energy and technology infrastructure deals to be commissioned under Vision 2030 in the Middle Eastern country.

Mohammed bin Salman, the crown prince and prime minister of Saudi Arabia, visited Seoul last November to discuss various Vision 2030 projects, including the estimated $500 billion Neom megacity project, with Korean companies.

During his stay in Seoul, the Saudi leader clinched several deals worth a combined $30 billion.

In March this year, Korean internet giant Naver Corp. also signed a contract with the Saudi Arabian government to assist in the country’s digital transformation.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.