Hungary confirms Paks nuclear power deal with Russia

Hungary to go ahead with deal for construction of two Russian-made VVER-1200 reactors at Paks nuclear power plant

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Hungary has confirmed plans to proceed with the construction of two reactors at the Paks nuclear power plant (NPP) with Russian energy firm Rosatom.

Rosatom head Sergei Kiriyenko was cited in Russian media on Tuesday saying the Hungarian government had agreed to go ahead with the building of two VVER-1200 reactors in accordance with a deal signed last year.

The two reactors will have a combined power generation capacity of 2,400MW.

"We got a confirmation from the government of Hungary that everything has been agreed, everything remains unchanged,” Kiriyenko said.

“Everything has been confirmed, the contract has entered force.”

According to a statement by Hungary’s Foreign Minister Mihaly Varga in February 2014, the reactors will become operational in 2023.

Russia previously gave Hungary around $11 billion to cover 80 percent of the costs for the project, which will also include nuclear fuel supplies and maintenance, to be paid back over a period of 20 years.

Located 62 miles south of the capital Budapest, Paks is Hungary’s only nuclear power plant and is responsible for over a third of the country’s electricity supply.

The Paks deal between EU-member state Hungary and Russia has faced much scrutiny from the EU’s common energy market Euratom Supply Agency (ESA), which seeks to make changes to the current deal so that only non-Russian ships can deliver nuclear fuel to the plant.

However, both Hungarian and EU officials have stated that disagreements over fuel delivery do not amount to a block on the deal.

The EU sets strict rules on deals between member states and non-EU states to prevent the bloc becoming over-dependent on Russia for its energy.

Critics of the deal, on the other hand, argue the agreement between Hungary and Russia is much more than meets the eye.

Speaking to Reuters in March, Zoltan Illes, a former lawmaker from Hungary’s ruling Fidesz Party who opposes the deal, called the agreement a “camouflage” for Russia buying influence in the country.

EU concern

Hungary’s close relationship with Russia has alarmed other countries in the EU as the bloc remains at loggerheads with Moscow over the annexation of Crimea last year as well as its support for pro-Russian separatist rebels in eastern Ukraine.

Hungarian Prime Minister Viktor Orban, who is largely viewed as having a soft stance on Russia, previously promised to vie on behalf of Russia with the EU to gain its consent for the planned Turkish Stream gas pipeline to Europe to pass through Greece, Macedonia, Serbia and Hungary.

The pipeline, which was announced in December as a replacement for the canceled South Stream project, aims to pump 47 billion cubic metres of gas per year through the Black Sea from Russia to Turkey by December 2016, from which the gas may then be pumped to Europe.

Orban’s government has also criticised sanctions on Russia that were enforced by the EU after the annexation of Crimea, with Hungarian Foreign Minister Peter Szijjarto calling on the EU to “negotiate” with Moscow.

According to Szijjarto, 85 percent of Hungary's gas supplies come from Russia and an agreement on the supplies expires this year.

Russia’s state-owned energy firm Gazprom currently stores up to 700 million cubic metres of gas in Hungary, which has a total gas storage capacity of around 6 billion cubic metres.

The EU, which receives about 30 percent of its gas from Russia, is Gazprom's main foreign client and receives major portion of Russian gas through Ukraine.

However, the instability that ensued in the region after Ukraine’s former pro-Russian president Viktor Yanukovych was deposed in February 2014 following months of pro-EU demonstrations in Kiev has left the EU looking elsewhere for its gas supply.

TRTWorld and agencies