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Hungary working to modify funding for Paks upgrade

Hungary is working to modify a financing agreement with Russia for the upgrade of the Paks Nuclear Power Plant so that it only starts repaying the loan once the two new reactors begin supplying power, said the minister in charge of the expansion, after an EU review of the plans contributed to delays in the project, reported.

An artistʼs rendering of the new four-reactor Paks plant

Talks on rescheduling Russian credit for the Paks project are underway, with the modified contract requiring the approval of Parliament. Hungary awarded Russiaʼs state-owned Rosatom a contract to build additional reactors at the Paks plant in January 2014, but construction has faced long delays, partly because of a European Union review of the project, which also looked into the way it was funded.

"Once we know the deadlines for the technical contract, we will modify this [financing] contract," said János Süli, the minister in charge of the project, adding that this would meet procedures set by the EU executive.

After Parliament voted to build new nuclear capacity in 2009, Prime Minister Viktor Orbán bypassed an international tender and signed a deal with Russian President Vladimir Putin. The move drew international criticism, especially from the United States, which is concerned about Central and Eastern Europeʼs heavy reliance on Russian energy sources, noted the report.

In March 2017, the European Commission approved state aid for the construction of the two nuclear reactors in Paks on the basis of commitments made by Hungary to limit distortions of competition, recalled state news agency MTI. The state of Russia is financing most of the cost of the EUR 12.5 billion upgrade of Paks, Hungaryʼs sole commercial nuclear power plant.