Hungary Signs €10 billion Nuclear Deal with Russia

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--A 10-billion-euro ($13.6 billion) financing package to build two new nuclear power reactors in Hungary has been approved by the ruling government.

The controversial deal with Russia's government was agreed by Hungary's parliament and opens the way for the construction of a 2,000-megawatt (MW) plant addition at the country's sole nuclear power plant MVM Paksi Atomeromu, more commonly referred to as Paks. The deal will see Russia provide 10 billion euros in loans at an annual interest rate of between 4.50% and 4.95%.

However, the project has not been approved by the European Union (EU) and there was no open tender for the plant expansion project. Instead, the project was given to Russia's Rosatom, which will provide a pair of its VVER-1200 reactors. The European Commission (E.C.) has been investigating the country's public procurement system ever since the original contracts were awarded in January this year.

Recently, Hungarian government commissioner Attila Aszódi, said that three more contracts must be signed by Hungary and Russia before they can move forward with the upgrade of the Paks power plant, which has been using older VVER reactors for the past 30 years. They concern the planning, construction and commissioning of the new reactors, as well as the disposal and delivery of nuclear fuel, and the maintenance and safety of the older plant.

Hungary has four nuclear reactors in total, all at the Paks plant, which is located around 100 kilometers (km) south of Budapest. They are VVER-440 models, the first of which was commissioned in 1982. They provide around one third of the country's electricity. The plants have an operational life of 30 years, and will reach the end of their official service lifetimes between 2012 and 2017, but the government overwhelmingly voted for 20-year lifetime extensions in 2005.

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