Hungary Approves 10 Billion Euro Russia Loan for Nuclear Upgrade

June 25, 2014

Hungarian lawmakers approved Monday a multi-billion-euro loan from Russia for an upgrade of the country's only nuclear power plant, a deal critics say increases Hungary's dependence on Moscow.

In January, Prime Minister Viktor Orban struck an agreement with Russian President Vladimir Putin for Russia's atomic energy corporation Rosatom to build two new reactors at the Paks plant -- located about 100 kilometres (60 miles) south of Budapest.

The loan agreement, which was signed in March but required approval by Hungary's parliament, stipulated that Moscow would lend Budapest up to 10 billion euros ($13.7 billion) -- around 80 percent of the estimated cost.

Parliament gave the loan the green light by 110 votes for, 29 against with 19 abstentions.

Details of the deal were not published nor was any formal bidding process for the plant's expansion ever launched, prompting an ongoing enquiry from the European Commission into possible breaches of EU law.

The government has argued however the extension will create cheaper energy as well as 10,000 new jobs, and that Moscow offered better loan terms than banks.

Copyright, AFP, 2014.