Hungary agrees deal for Russian reactors

25 April 2023

According to a report in the Budapest Business Journal (BBJ) via Globaldata, Hungarian foreign minister Péter Szijjártó and Rosatom CEO Alexey Likhachev struck a deal on 11 April to add two new VVER-1200 reactors to the country’s Paks nuclear plant. It extends an original contract between the two countries signed in 2016. The cost of the project is estimated at around $13.2bn (€12bn), $10.9bn of which will come from Russian loans.

Szijjártó said via the BBJ that advancing the project to add two more blocks at the Paks plant was ‘not made any easier’ by the war in Ukraine and sanctions against Russia. Technological challenges and other circumstances have also changed to a degree requiring modifications to the contractual framework in the interest of finally allowing the implementation of the investment.

“We’re moving forward with the project, but the financing and construction contract needed to be clarified to guarantee the investment can be carried out in this changed environment,” he added.

Lawyers are currently making the final changes to the text of the contract, after which time the modifications can be submitted to the European Commission for approval and clearance. The European Commission approved original proposals for the new reactors in 2019, before Russia’s invasion of Ukraine.

In April last year, Russia began to ship nuclear fuel to Hungary by air to feed the Paks nuclear plant. Air shipments became a necessary alternative to the usual method of rail transport via Ukraine, after the war caused damage to crucial routes.

“We hope that the European Commission does not wish to jeopardise the long-term security of Hungary’s energy supply … which can be guaranteed by the construction of the new blocks at Paks,” Szijjártó said about the latest agreement.

Paks is Hungary’s only nuclear power plant, and its four Rosatom VVER-440 reactors generate about half of the country’s electricity.

Image: The Paks nuclear power plant

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