Finance deal for new Paks units

Thursday, 6 February 2014

Hungary has reached an agreement with Russia over a finance package for the construction of two new reactors at the Paks nuclear power plant. Russia agreed to build the new units last month.

Hungary's economy minister Mihaly Varga announced yesterday on television that Russia has agreed to lend the country €10.0 billion ($13.5 billion) to build the reactors. The loan will cover 80% of the project costs, he said, with Hungary to provide the remainder.

The four existing units at Paks (Image: Paks NPP)

Hungary is to repay the variable-rate loan over 21 years, starting about six months after the new units have been commissioned. The interest rate for the initial eleven years will be below 4.0%, while in the second phase it will be 4.5% and in the third and final phase it will be 4.9%. Varga said: "We were able to conclude an agreement, which is suitable to both the Russian and Hungarian sides, and better than what the market would have been able to provide."

He said that the agreement "could be signed in a few days." In a 256-29 vote, the Hungarian parliament today approved the finance deal.

Last month, Hungary and Russia signed a cooperation agreement which included the construction of two new VVER reactors of up to 1200 MWe each at Hungary's existing four-unit Paks plant. The first new unit is to be commissioned in 2023, with the second following about two years later. Russia is also to supply fuel for the new units and train staff for their operation.

Researched and written
by World Nuclear News