Hungary stands behind Paks NPP project

24 June 2016

The price of the planned Paks II nuclear project in Hungary is "clear" and will be €10bn ($11bn), 80% of which will be provided by Russia while 20% will be publicly financed, Andras Klein, Hungary's ambassador to Bulgaria, told a conference organised by the Bulgarian Atomic Forum. Klein said Hungary will be required to repay the Russian loan between 2026 and 2046 at an interest rate of 3.95-4.95%. The two planned VVER 1200 reactors at Paks II will be fully owned and operated by Hungary, Klein said.

In January 2016, the European Commission expressed doubts about whether Hungary's financing plans for the two reactors involved legal state aid. In November 2015, the EC launched an infringement procedure against Hungary concerning implementation of the project and the award of the construction contract to Russia. Klein said the current political standoff between Europe and Russia does not provide "the most appropriate" climate for collaboration with Russia, and although Hungary respects all EU decisions, it cannot afford to lose completely its opportunity to communicate and cooperate with Moscow in the energy sector.

He said the decision to build Paks II was not political, but "economic and strategic". A political decision would be "to give up the project only because the partner is Russia", Klein said. He added that Hungary's economy is export-oriented and preserving and boosting its competiveness by securing low electricity prices is essential.

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