According to a Russian decree published on the government’s official portal for legal information on Saturday, the Russian government has approved a state loan to finance the construction of two nuclear reactors at Hungary’s Paks Nuclear Power Plant, also known as the Paks-2 project.
The decree pledged to allocate as much as €10 billion ($10.2 billion) for the construction, which is currently slated to begin in mid-2024. The loan should finance the majority of the project, which it is estimated will cost about €12.5 billion.
The decree noted the loan will not incur taxes, and will be paid without, “commissions, restrictions, deductions, exemptions, or compensatory withholdings.”
The deal for the construction of the two reactors was signed in 2014, and specifies that state nuclear energy giant Rosatom will construct units 5 and 6 of the Paks nuclear power plant, which is the only nuclear power plant in Hungary. The two new units will each have a capacity of 1.2 gigawatts each.
Roughly half of the electricity of Hungary is supplied by the four existing reactors at the Paks plant, which came online between 1982 and 1987. It is expected the two new, modern reactors will double the power output of the plant, allowing it to provide potentially, close to the entirety of Hungary’s electricity consumption.
Although the Paks-2 project has suffered a series of delays, the license for the construction of the two new reactors has already been issued by Budapest. It was also given permission to amend the contract with Russian so that a project management company could be included to speed up the process of construction.
So far the Ukraine-related sanctions imposed by the EU on Moscow have not targeted the nuclear energy sector in Russia, and Hungary has specifically stated it would veto any attempt to do so.
Rosatom was constructing 20 of the 53 reactors under construction in the world in mid-2022. It recently completed the first atomic power plant in Türkiye at Akkuyu. Russia is also constructing the first-ever nuclear power plant in Bangladesh, and supplying fuel to several nuclear reactors in China and India.
