Russian state-owned company Rosatom is set to begin the construction of two new nuclear reactors at a power plant in Hungary. 

The deal comes after Hungary’s National Nuclear Energy Office gave the official go-ahead for the planned expansion, and follows a 2014 agreement between the two countries which will see the plant’s nuclear capacity more than double.

The expansion project is will cost an estimated €12.5 billion in total, with €10 billion paid by the Russians as part of a loan, and €2.5 billion to be paid by the Hungarian government. 

Hungarian media reports that construction could begin in just a few weeks. 

In March 2017, the European Commission approved Budapest’s plan to finance the project, after ruling out a violation of EU laws. 

However, since then, Russia has invaded Ukraine, resulting in the European Union issuing economic and energy sanctions against Putin’s government. 

However, Hungary’s prime minister Viktor Orbán and his government are considered some of Moscow’s closest allies within the EU and are moving ahead with the project.

Some countries, such as neighbouring Austria, oppose the expansion and Vienna has lodged an action for annulment with the Court of Justice of the European Union – a court which interprets EU law to make sure it is applied in the same way in all EU countries and settles legal disputes between national governments and EU institutions.

An attempt to dampen the energy crisis

Hungary’s foreign affairs minister Péter Szijjártó has highlighted the importance of the new reactors for Hungary’s energy future. Currently, the nuclear plant has four reactors dating from the Soviet era and produces around 40% of Hungary’s electricity. 

“It is now clearer than ever that the countries that have nuclear energy and nuclear power plants can feel more secure in terms of their energy supply. The greater the nuclear energy capacity of a country, the safer it will be in the future.”

While the EU has sanctioned Russia economically for its war in Ukraine and is moving away from Russian gas and oil, current restrictions do not include the Russian nuclear industry, despite calls from Ukrainian activists and NGOs to blacklist Rosatom.

Hungary has not unconditionally supported the European decisions and aims to secure the country’s future energy supplies with this expansion, in light of the current energy crisis.