EC Conditions for Hungary’s Paks II

3 August 2016

Hungary must satisfy two conditions before the European Commission (EC) can give the green light for the Paks NPP project, Hungarian media reported. MVM Paks II NPP Development, a fully owned subsidiary of the Hungarian power company MVM, is expanding the existing Paks NPP by building two new units (5 and 6) of 1,200MW each. Construction is expected to start in 2018 and 2019 respectively, and commissioning is expected in 2025 and 2026. The €12.5bn project is backed by a €10bn ($10.8bn) loan from Russia. Hungary will repay the loan over 21 years of the plant’s operation. Currently Paks NPP comprises four 500MWe units.

According to the online business daily Portfolio, the first condition is for all issues related to the supervision of Paks II to be “clearly separated” from existing policymaking in the energy sector and the overall system of supervision for power stations in Hungary. The second condition is that the electricity produced at Paks II should be sold on a power exchange along market principles instead of being directly sold to the Hungarian national grid operator, reports said.

In November 2015, the EC launched an infringement procedure against Hungary concerning the implementation of the project and the award of the construction contract to Russia. In January 2016, the EC expressed doubts about whether Hungary’s financing plans for the two reactors involve legal state aid. 



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