* Hungary will more than double capacity at Paks nuke plant
* EUR 10 bln Russian loan to cover 80 pct of project cost
* Hungary to use EU funds to beef up local subcontractors
BUDAPEST, Jan 26 Hungary's development minister
said on Sunday the government should soon complete talks with
Russia on a multi-billion dollar sovereign loan that would
enable it to start work on two new nuclear reactors.
Russian President Vladimir Putin and Hungarian Prime
Minister Viktor Orban signed an agreement earlier this month on
a project to add 2.4 gigawatts of nuclear generation capacity at
the Paks nuclear plant, more than doubling Hungary's current
The two nations agreed on several aspects of the project,
but the financing was left open.
Minister Zsuzsanna Nemeth told national news agency MTI in
an interview that she hoped the loan agreement would be wrapped
up fairly quickly and that experts can begin coordinating
technical details soon.
She did not elaborate, and MTI did not quote her words
Janos Lazar, Orban's chief of staff, said when the deal was
agreed that Russia would provide up to 10 billion euros ($13.7
billion) in a sovereign loan, which would cover up to 80 percent
of the costs, and that Hungary would put up the other 20 percent
later as the money is needed.
Lazar said the 30-year loan would have a roughly 10-year
grace period during construction and then a 20-year repayment
Russian nuclear builder Rosatom could start hiring for the
project this year and employ 1,500 people by the end of 2015, he
Neither Lazar nor Nemeth explained how state-owned energy
wholesaler MVM, which owns and operates the Paks plant, would
figure in the expansion, nor the precise effect the project
would have on the government budget, saying only that it would
stick to its goal of cutting debt each year.
The Paks expansion is expected to become a hot topic as
Orban's centre-right Fidesz party seeks reelection for a new
four-year term in April. Leftist opposition leader Attila
Mesterhazy, who questions the deal's link to Russia, said on
Saturday his party would make it the subject of a referendum.
Fidesz has a comfortable lead over its opposition rivals,
recent polls have shown, but about a third of the electorate
Russia and Hungary have agreed that Hungarian subcontractors
will get a 40 percent share of the work. Nemeth said Budapest
would direct 60 percent of its development funds from the
European Union in budget years 2014-2020 to improving the
technical capabilities and production capacity of local
companies so they can participate in the Paks expansion.
Paks currently generates about 2 gigawatts of electricity
from four Russian-made VVER type reactors that were brought
online in the 1980s, covering about 40 percent of Hungary's
The four blocks are in various stages of obtaining the
safety checks and paperwork necessary to extend their original
30-year lifetimes for another 20 years.
($1 = 0.7307 euros)
(Reporting by Marton Dunai; editing by Jane Baird)