On September 11, Russian National Atomic Energy Corporation Rosatom affirmed that it will continue implementing the Paks-2 nuclear power plant project in Hungary, despite the European Union Court of Justice's adverse ruling regarding state subsidies for the project.
According to the official statement, Rosatom and its Hungarian partners consider the Paks-2 project a "backbone" of national energy security, ensuring a stable and affordable power supply, while committing to comply with international safety standards and strictly comply with contractual obligations.
On September 11, the EU Court of Justice ruled that the Hungarian state subsidy for the expansion of the Paks factory was not in accordance with EU regulations, and overturned the previous decision of the European Commission (EC) which allowed the support package.
The court emphasized that before approving, the EC should have considered the public bidding factor, ensuring that the contract to build two new reactors does not violate EU public bidding law.
Not only facing barriers from the EU, Paks-2 is also heavily affected by US sanctions. From the end of 2024, Washington will impose sanctions on Gazprombank - the bank that guarantees payments between Russia and Hungary for oil and gas and the Paks-2 project. In early 2025, the US will continue to expand sanctions, directly targeting the Rosatom leadership, including CEO Alexey Likhachev.
Although Budapest and Moscow have found a temporary solution for oil and gas payments, Paks-2's financial problems remain deadlocked, causing the construction progress of the two new plants to be almost "inactive" for many months.
Hungary has officially proposed that the Trump administration lift sanctions on Gazprombank - the bank that guarantees capital for the project.
The Paks nuclear power plant, built by the Soviet Union in the 1980s, currently accounts for 50% of Hungarian power generation output and about a third of Hungarian power consumption. The plant consists of 4 VVER-440 blocks, located along the Danube River, 100km south of the capital Budapest.
The Paks-2 project - an expansion phase with two VVER-1200 reactors (concentrators 5 and 6) - is being undertaken by Rosatom with a total investment of 12.5 billion euros, of which 80% is expected to be provided by Russia.
If completed in the early 2030s, the capacity of the entire complex will increase from 2,000 MW to 4,400 MW, raising the share of nuclear power in Hungary's energy balance to 70%.
Despite political, legal and financial pressure, both Russia and Hungary have declared Paks-2 a vital project. Rosatom affirmed: Our top priority is to complete the project within the highest safety framework and contract obligations. This is a commitment that has not changed".
Analysts say that Rosatom's decision to stay with Paks-2 shows that Russia does not want to lose the "nuclear gateway" in Europe, while Hungary considers this the key to ensuring energy independence against the risk of a prolonged energy crisis in the EU.
