27.11.2015_No47 / World Nuclear Review

EC Opens State Aid Investigation Into Financing Of Hungary’s Paks 2

Policies & Politics

27 Nov (NucNet): The European Commission opened what it called “an in-depth state aid investigation” into Hungary’s plans to provide financing for the construction of two new nuclear reactors at the Paks 2 nuclear station.

The Paks nuclear station in Hungary.

An agreement signed in 2014 would see Russian enterprises supply two VVER-1200 reactors at Paks, as well as a loan of up to €10bn ($10.5bn) to finance 80 percent of the project.

The EC said it has concerns that this investment may not be on market terms, as Hungary argues. The EC said it will assess the business case for the construction, operation and decommissioning of the two reactors on the basis of the agreed transaction terms and in view of the EU’s energy market projections.

The EC said it will in particular assess whether a private investor would have financed the project on similar terms or whether Hungary’s investment constitutes state aid. If the project is found to involve state aid, the EC will lookk into whether it would lead to distortions of competition, in particular on the Hungarian energy market

Last week the EC launched an infringement procedure against Hungary concerning the Paks 2 nuclear power station project and the award of a construction contract for the planned facility to Russia.

The EC said it had concerns regarding the compatibility of the project with EU public procurement rules.

Paks has four Russian-supplied VVER-440 PWRs, which began commercial operation between August 1983 and November 1987.

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