Hungary Cements Paks II Nuclear Deal with Russia

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Hungary's government has confirmed a contract with Russia's state-owned Rosatom Corporation (Moscow) to build its second nuclear power plant.

The news comes just weeks after the European Union's (EU) nuclear watchdog, Euratom, approved a vital and contentious fuel-supply deal between Hungary and Russia for the Paks II nuclear project. For additional information, see April 27, 2015, article - Hungary's Paks II Nuclear Project Back on Track.

Sergei Kiriyenko, the head of Rosatom, said: "We got a confirmation from the government of Hungary that everything has been agreed, everything remains unchanged. Everything has been confirmed, the contract has entered force."

Speaking last week with Kiriyenko, Russian President Vladamir Putin commented on the project: "We offer good terms, and we use the latest technology, so if anyone had forced our partner [Hungary] to turn down the contract--something I believe could have been done--this would have been very detrimental to the national interests of Hungary itself."

The deal will see Rosatom subsidiary Nizhny Novgorod Engineering Company Atomenergoproekt (NIAEP) build two new 1,200-megawatt (MW) nuclear reactors for Paks II at the existing Paks nuclear power plant, located about 100 kilometers (km) south of Budapest. Paks boasts four VVER-440 reactors from Russian company AtomEnergoExport and a total generating capacity of 2,000 MW, which supplies more than 40% of the country's electricity. Units 5 and 6 at the proposed Paks II will use VVER-1200 reactors, also from AtomEnergoExport.

The project is expected to cost Hungary €10 billion ($11.2 billion) to construct and will be funded wholly by Russian loans. Hungary's economic Minister Mihaly Varga said these loans would be paid back over two decades after the reactors become operational in 2023. Last July, the Hungarian government approved the 10 billion-euro financing package with Russia to build the new reactors. For additional information, see July 11, 2014, article - Hungary Signs €10 billion Nuclear Deal with Russia.

Paks II is being investigated by the European Commission (E.C.) with regard to possible anti-trust violations, since Hungary awarded the contracts to Russian firms without any tender process. For additional information, see March 2, 2015, article - Hungary's Paks Nuclear Deal Faces European Investigation.

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