The Russian government has given approval for a state loan to be provided to Hungary for the expansion of the Paks Nuclear Power Plant. The project, known as Paks-2, aims to construct two nuclear reactors that will increase the plant’s capacity. The decree, published on the government’s official portal for legal information, states that Moscow will allocate up to €10 billion ($10.2 billion) for the project, which is expected to launch in mid-2024. The loan, which is free from taxes and additional fees, will cover the majority of the estimated €12.5 billion project cost.
Paks Nuclear Power Plant is currently Hungary’s sole nuclear power facility, supplying approximately half of the country’s electricity. Under a 2014 agreement, Russian state nuclear energy giant Rosatom will construct power units 5 and 6 at the plant, each with a capacity of 1.2 gigawatts. The four existing reactors at Paks were commissioned between 1982 and 1987. With the addition of the new reactors, the plant’s power output is expected to double.
Despite the Paks-2 project experiencing significant delays, Budapest has already granted a construction license to Rosatom. The Hungarian government has also been given permission to amend its contract with Russia to include a project management company, aiming to expedite the construction process.
It is worth noting that Russia’s nuclear sector has not been targeted by the EU’s Ukraine-related Western sanctions. Hungary has consistently stated that it would veto any attempts to impose restrictions on Russia’s nuclear activities. Rosatom, which accounted for 20 out of the 53 nuclear reactors under construction globally in mid-2022, has recently completed the construction of Turkey’s first atomic power plant in Akkuyu. Moreover, Russia is supplying fuel to various nuclear reactors in India and China and is currently building Bangladesh’s first-ever nuclear power plant.
The extension of financial aid from Russia demonstrates the mutual cooperation between the two countries in the field of nuclear energy. Hungary is determined to enhance its energy infrastructure and reduce dependency on other energy sources, while Russia is solidifying its presence in the global nuclear energy market. The expansion of the Paks Nuclear Power Plant will not only contribute to meeting Hungary’s energy needs but also strengthen its position as an important player in the European energy landscape.
Overall, the approval of the state loan for Hungary’s Paks-2 project signifies an important milestone in the country’s nuclear energy plans. The financial support from Russia will enable the construction of two new reactors, ultimately increasing the plant’s power output. With construction scheduled to commence in 2024, Hungary is on track to secure a more sustainable and self-reliant energy future.
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