Hungary and Russia renegotiate Paks-II loan

14 May 2019

Hungary and Russia have agreed to amend the loan agreement for the expansion of Hungary's Paks nuclear plant, local media reported on 6 May.

Hungary will begin to repay the loan once the two units are connected to the grid and begin production. Hungary an agreement with Russia, which is financing €10bn of the €12.5bn project. Russian state nuclear corporation  Rosatom was selected to add two units to the Paks plant in 2014 increasing its capacity by 2400MWe.

The new blocks were planned to start operation in 2025-2026, but  Rosatom has yet to obtain the final construction licence, and the government commissioner for the expansion has acknowledged that the project two years behind schedule.

Hungarian officials blamed the European Commission's (EC’s) prolonged probe of the project, as well as extensive studies by local authorities concerning the safety of the project. In November 2015, the EC launched an investigation on whether the financing involved state aid and how that affected competition. In March 2017, the EC agreed to accept state support for the construction of the plant.

The government began talks on rescheduling the Russian loan earlier this year.  Under the terms of the original agreement, the credit was granted for 2014-2025.

Photo: The existing Paks nuclear plant

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