Paks Nuclear Power Plant Deal: In spite of protests, Hungary will move forward and accept Russian financing

A 2014 protest at the Paks-2 nuclear power plant in Hungary.
A 2014 protest at the Paks-2 nuclear power plant in Hungary.
Courtesy of Ecodefense

Publish date: February 28, 2014

VILNIUS--The Hungarian parliament has approved a deal with Russia for the expansion of Paks nuclear power plant; according to the agreement, two new reactors will be built. Hungary's president, ignoring the series of protests sweeping across Budapest, signed the deal into law last week.

VILNIUS–The Hungarian parliament has approved a deal with Russia for the expansion of Paks nuclear power plant; according to the agreement, two new reactors will be built.  Hungary’s president, ignoring the series of protests sweeping across Budapest, signed the deal into law last week.

Demonstrations against the power plant’s expansion were held in the Hungarian capitol at the start of this month.  On Saturday, February 1, a crowd of an estimated 500 people gathered in front of the Ministry for National Economy in order to voice their objection to the plans of State Nuclear Energy Corporation Rosatom and the Hungarian government for the construction of two additional power units at the Paks nuclear power plant.

According to Reuters, the agreement signed between Russia and Hungary detailing the terms of the new reactors’ construction includes financing from the Russian state budget–a loan amounting to 10 billion euro.  The Paks power plant currently satisfies about 40% of the country’s overall demand for electricity, as stated by Reuters.

The two additional units will have a combined output of 2400 Megawatts and will be located next to 4 soviet-style power blocks with VVER-440 reactors that have been in operation since the 1980s.   Hungarian Prime Minister Victor Orban and Russian President Vladimir Putin signed the agreement in Moscow on January 14th.

According to Itar-Tass news agency, Hungary’s President Janos Ader signed legislation approving the expansion of the Paks nuclear power plant on Monday, February 10th.  Prior to signature, the bill was passed by the Hungarian parliament with a vote count of 256/29.

Reuters quoted Janos Lazar, a leading member of Orban’s cabinet, as saying that the European Union had already approved the preliminary project, and that 80% of the construction’s cost would covered by a 30 year loan from Moscow.

Lazar also stated that the new reactors should become operational by 2023, and they will remain the property of Hungary.  According to Lazar’s statement, the construction project itself will provide an estimated 1% additional annual economic growth and create 10 thousand new jobs.

However, the prospect of expanding the Paks nuclear power plant has sparked the protest of citizens, environmentalists, and opposition politicians, who have challenged the plan’s economic benefits as well.

“Chernobyl for that kind of money?”

On February 1st, demonstrators gathered in the Hungarian capitol held up signs that read: “No to Paks deal,” “Chernobyl for that kind of money?” “Russian roulette,” and “Welcome, comrades.”

The demonstration was organized by various environmental organizations, such as Energiaklub, Greenpeace, and the National Society of Conservationists – Friends of the Earth Hungary.  The next day an even larger protest was held near the parliament, and members of the Hungarian political opposition were responsible for organizing it.

Separately, Greenpeace activists raised public awareness of the issue and attracted press attention by turning one of the capitol’s traffic circles into a giant radioactivity symbol with the caption: “Stop Paks-2.”  On February 3rd, Greenpeace followed up with another demonstration at Liberty Statue in Budapest.

The possible economic consequences of the construction project have also raised concerns amongst environmentalists, as Brigitta Bozsó, Greenpeace in Hungary’s campaign director for energy and climate explained to Euronews:  “Huge investments like this deprive us of the kinds of opportunities that renewable energy and energy efficiency provide.  Moreover, the population will be saddled with an enormous amount of debt.”

Protests continued over the weekend of the 8th and 9th; those opposed to expanding the nuclear power plant organized demonstrations and a march to the presidential palace.  As reported by the financial news outlet, on Sunday morning activists climbed up to the presidential balcony, where they then hung up a banner calling for a national referendum on the construction of additional reactors.  The banner also posed the question: “Why are you afraid of a referendum?”

As reported by, political opposition parties were the first to demand a referendum.  However, President Ader said of the newly signed law: “I have considered the possibility of holding a referendum on the expansion of the Paks nuclear power plant,” and according to a presidential statement quoted by Itar-Tass, he came to the conclusion that, “the constitution does not allow for holding referendums on obligations that fall under international agreements.”

Politicians and experts against the nuclear deal with Russia

The bill on the construction of new reactors, once brought to the parliament floor for discussion, raised objections that were, “loud in the most literal sense of the word,” according to  The dissenting voices belonged to members of the opposition liberal green party LMP (Lehet Más a Politika, “Politics can be different), who protested by broadcasting sirens over megaphones, which subsequently resulted in their removal from the parliament chamber for the rest of the day.  Members of parliament were allowed to return to the assembly once the bill came up for a vote.

The director of the Hungarian Institute for Climate Politics Energiaklub Ada Amon at a protest against the agreement with Russia two build new reactors at the Paks Nuclear Power Plant, February 1st, 2014.(Photo: Photo: Bence Jardany / Greenpeace)

Opposition politicians maintain that the agreement with Russia, which was reached without any input from Hungarian citizens or experts, is not economically beneficial and imposes long-term debt obligations to Russia.

In turn, the largest opposition party–the Hungarian Socialist Party–has already announced that if they are able to unseat Prime Minister Orban as a result of this spring’s elections, then they will re-examine the nuclear deal with Russia, according to Reuters.

The Hungarian Institute for Climate Politics Energiaklub has also actively expressed its opposition to the Paks-2 project.  According to the organization’s director, Ada Amon, the new reactors, which will be built through Russian financing, will increase energy dependence on Russia.

“This irresponsible contract will drag the Hungarian people even further into debt by adding to the already existing international debt,” Amon stated in comments to “Bellona,” “We, our children, and our grandchildren–that’s who will pay for the construction, which won’t lead to lower electricity prices and will not raise the country’s ability to compete.”

“On the contrary, the project will require additional investments, for example, in order to extend electrical power lines, which will cost billions of forints.  This decision breaks E.U. law, puts our country up for sale, and squanders our future,” she concluded.

Amon also pointed out that energy demand has not risen sharply in Hungary, and thus the decision to build new power units is unjustified.

Atomic energy will not find support amongst Hungarians

As the results of a recent survey show, only a third of the population (34% of respondents) supports the Hungarian-Russian agreement to expand the nuclear power plant.  Moreover, 82% of those surveyed were aware of the deal, and 78% were either very or moderately surprised by the decision.  The survey was conducted in Hungarian by the Hungarian information agency Median–respondents represent a sample of 100 different population areas, and the data was collected between the 24th and the 28th of January.

The project’s high cost was a cause for concern amongst survey participants: 56% expect that, “Due to the high cost of the nuclear power plant expansion, electricity prices will rise significantly.”  Only 35% of respondents agreed that atomic energy is a cheap energy source, and that electricity will become less expensive after the project’s completion.

An even smaller number, 16% of participants, see atomic energy as capable of becoming the country’s main energy source in the future.  At the same time, three quarters (74%) of respondents prefer renewable energy sources.

Public opinion on the expansion project became much more critical in comparison with the results of the last survey from 2012, as stated by Median.   The number of people supporting a national referendum on the Paks-2 project and the use

The Paks nuclear power plant, which currently operates 4 soviet-style power blocks with VVER-440 reactors. Plans for expansion include two additional blocks with new Russian VVER-1200 reactors. The majority of Hungarians, however, are against the station’s expansion and the use of atomic energy as a whole.

Expert opinion:  The need for real public discussion

For many Hungarian experts, the decision to expand the Paks nuclear plant seems rushed, unprofessional, and lacks transparency.  What disturbs the project’s opponents the most, moreover, is the fact that the agreement was made behind closed doors, and public consultations were left out of the process.

The European Union, for its part, still has questions about the deal.  Citing the Hungarian press, the news outlet RBK reported that the European Commission intends to re-examine the plans to expand the Paks atomic power plant.  The deal with Russia may, in fact, break a number of statutes of European Commission law.  According to the EC, for example, the government’s decision to keep electricity prices artificially low, regardless of the project’s high cost, corresponds with their definition of illegal state subsidies.  The EC also intends to clarify why the contracts for such a large project were awarded without any type of bidding.

After the idea of expanding the Paks plant was approved by Parliament in 2009, Energiaklub won a series of court cases on access to information surrounding the project.   The organization also filed a handful of complaints with the Constitutional Court and the Parliamentary Commission for Future Generations.

“Building a nuclear power plant is not a technical question.  It cannot be put into the hands of engineers or politicians only, it should be a real public issue,” said András Perger, a representative of Energiaclub, at the conference “Paks-2: Risks of Nuclear Expansion,” which was held in Budapest last June.

At that same conference András Deák from the Hungarian Institute of International Relations evaluated the possible consequences of Rosatom’s investment in the project: “There is no guarantee that Hungarian politicians can remain consistent in a situation where the proposed tender is incapable of attracting investors other than the Russians.”

“The devil is in the details,” he stressed, “Hungary can lose a lot on in the construction process (management, licensing, consequences of possible delays, ect.).  Moreover, the Russians are much more experienced in positioning nuclear projects than Hungarians are in implementing them.”

This article was written by Galina Raguzina and translated from Russian by Meagan Dunham.