CONSULTING

diversify away from reliance on Russian energy. Russia already provides about three-quarters of
the country’s oil and gas supplies. 873
In September 2015 the European Commission notified the Hungarian authorities that the project
meets the objectives of Article 41 of the EURATOM Treaty. 874 However, on 23 November 2015, the
European Commission opened an investigation into the Paks II project, with particular focus is
the non-tendering of the project and the question, whether a private investor would have financed
the project on similar terms, or if Hungary’s investments constitutes State Aid. 875 The government
said, it takes “the view that the decision of the European Commissioner for Competition of
23 November 2015 and the summary published in today’s edition of the Official Journal of the
European Union contain a number of inaccuracies, misunderstandings, and unfounded and
misleading claims”. 876 The Austrian government is pressing the European Commission to consider
Hungary’s support state aid. “We stand against any kind of support for the construction of nuclear
power plants or the production of nuclear energy”, said Economy and Energy Minister Reinhold
Mitterlehner. 877 However, there is also growing doubt over the wisdom of the project, both from
the perspective that Russia may be unable to deliver on the financing and that, as Janos Lazar,
head of the prime minister's office, told parliament that “Hungary’s money market position has
greatly improved lately and therefore Hungary is ready and able in the near future to replace the
loan [from Russia] with capital obtained on the open financial market.” 878
The environmental impact assessment for the project is currently underway and is supposed to
be finalized in the summer of 2016. Construction is planned to start in 2018 and commissioning
in late 2023 or early 2024. 879
The Presidents of Hungary and Russia re-confirmed their commitment to the project in
February 2016, including President Putin saying Russia would make available up to 80 percent of
the total cost, starting in 2016. 880 However, as with other proposed Russian-financed projects,
doubts have been raised about the ability of the vendor country to provide the necessary funds.
Falling power prices across Europe have raised serious questions on the economic viability of the
project and various studies have been undertaken to assess this. One report, undertaken by
Rothchild & Cie for the Prime Minister’s Office of the Hungarian Government in September 2015,
873 Financial Times, “Russia builds clout in eastern Europe with €10bn loan to Hungary”, 14 January 2014.
874 WNN, “Hungary meets Euratom Treaty objectives for Paks II”, 15 September 2015, see
http://www.world-nuclear-news.org/NN-Hungary-meets-Euratom-Treaty-objectives-for-Paks-II-
15091501.html, accessed 2 July 2016.
875 European Commission, “State Aid SA.38454 (2015/C) (ex 2015/N) – Hungary, Possible aid to the Paks
nuclear power station”, 23 November 2016.
876 Prime Minister’s Office, “Inaccuracies and misunderstandings in European Commission’s notification”,
Hungarian Government, 12 January 2016, see http://www.kormany.hu/en/prime-minister-soffice/news/inaccuracies-and-misunderstandings-in-european-commission-s-notification,
accessed
18 June 2016.
877 NIW, “Briefs”, 12 February 2016.
878 Intellinews, “Hungary eyes nuclear options as doubts grow over Paks deal”, 20 June 2016, see
http://www.intellinews.com/hungary-eyes-nuclear-options-as-doubts-grow-over-paks-deal-100206/, accessed
21 June 2016.
879 WNN, “Hungary repeats 2018 target date for Paks II project”, 18 November 2015, see
http://www.world-nuclear-news.org/NN-Hungary-repeats-2018-target-date-for-Paks-II-project-18111501.html,
accessed 2 July 2016.
880 NIW, “Briefs”, 19 February 2016.
Mycle Schneider, Antony Froggatt et al. 203 World Nuclear Industry Status Report 2016