Canadian renewable energy company Neogreen Hydrogen and Portuguese developer of photovoltaic solar parks Frequent Summer announced on Monday plans to invest more than 1 billion euros ($1.04 billion) in a green hydrogen plant in Portugal.

So-called green hydrogen, produced using renewable electricity such as wind and solar, is seen as a key power source that can reduce pollution from long-haul heavy transport, steel and chemical industries and power generation.

The plant will be built in the port city of Sines, 150 km (93 miles) south of Lisbon, and will include a 500-megawatt electrolyzer "for the production of 'green' hydrogen and derived fuels," the companies said in a statement.

The agreement for the state to make 10.5 hectares available to install the plant will be formally sealed on Monday. The companies did not give a specific time frame for the investment nor say when hydrogen production would start.

NeoGreen Hydrogen Corp. chief executive Chris Corson said that "having a project in the heart of the European Union, which will be one of the main hubs of demand for hydrogen in the coming years, is strategic for us as a company."

Portugal expects to become a major producer and exporter of green hydrogen with 70 private investors or groups planning to spend 10 billion euros ($10.2 billion), the environment minister said on Thursday.

Portugal's largest utility EDP and oil and gas company Galp Energia and a Portuguese-Danish-Dutch consortium are each planning to build green hydrogen plants in the same industrial hub of Sines.

Portugal's three main glass producers and two biggest cement makers, together accounting for 10% of the country's industrial carbon emissions, also joined a new consortium to launch a green hydrogen plant. ($1 = 0.9660 euros) (Reporting by Sergio Goncalves; Editing by Simon Cameron-Moore)