* 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 level.
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 directly.
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 period.
Russian nuclear builder Rosatom could start hiring for the project this year and employ 1,500 people by the end of 2015, he said.
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 remains undecided.
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 power consumption.
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)