* Russia's Rosatom to add 2,400 MW capacity at Paks plant
* EUR 10 bln Russian state loan to finance 80 pct of cost
* Hungary faces elections in 2014, opposition would review
By Marton Dunai and Thomas Grove
MOSCOW/BUDAPEST, Jan 14 Russian nuclear power
company Rosatom will expand Hungary's only nuclear power plant,
more than doubling its capacity in the biggest construction
project in Hungary's post-Communist history, the two countries
agreed on Tuesday.
Russian President Vladimir Putin said that he and visiting
Hungarian Prime Minister Viktor Orban had signed an agreement on
the project at Paks, in central Hungary, which already runs four
Russian-made VVER-type reactors built in the 1980s.
The Paks expansion is expected to become a hot topic ahead
of parliamentary elections in April or May when Orban will seek
reelection. Opposition parties were quick to criticize the deal,
with one saying it made Hungary over reliant on Russia for
energy. Orban's centre-right Fidesz party has led in all polls
by a wide margin.
Hungary relies on Russia for most of its gas and oil
imports, and the Paks nuclear plant covers about 40 percent of
its total electricity needs.
Russia's state atomic agency head Sergey Kirienko said
Moscow was ready to lend Hungary up to 10 billion euros ($13.65
billion) for the construction of two new units, which will cover
the lion's share of the costs.
"The agreements signed today foresee the construction of two
new energy blocks at the power station," Putin was quoted as
saying after talks with Orban at his residence in Novo Ogaryovo.
Janos Lazar, a leading member of Orban's cabinet, said in
Budapest that the European Union had already approved a draft
plan for the building the blocks, each with capacity of 1,200
megawatts (MW) at a likely cost of around 10-12 billion euros.
Lazar said 80 percent of the financing would be covered by a
30-year sovereign loan from Russia, while Hungary would have to
put up the remaining 20 percent. He would not say how the
plant's operator, state-owned MVM, would figure in the deal.
The new blocks are not expected to come on line before 2023
and will remain in Hungarian state ownership, Lazar said. He
said the construction could add 1 percent to Hungary's economic
growth per year and up to 10,000 jobs.
QUESTIONS MARKS IN HUNGARY
Orban's political opponents at home said he had decided on
the future of Hungary's energy supply behind Hungarians' back.
The biggest opposition party, the Socialists, have already
said if they oust Orban they will review the deal.
"The Socialist-led government after the spring elections
will review the obligations undertaken by Orban, because a
responsible decision about the expansion of the Paks plant can
only be based on... a broad social and professional consensus,"
the Socialists said on Tuesday.
The green liberal opposition party LMP, which has opposed
the nuclear power expansion, said Orban was selling out
Hungary's sovereignty by making it dependent on Russia in
"Viktor Orban practically sells Hungary out to the
Russians," LMP deputy Bernadett Szel told national news agency
In 2009, before the last election, the Hungarian parliament
overwhelmingly approved a plan to expand Paks.
"The main question is whether we need it now, whether we
need to do it in such a rush," said Ada Amon, director of the
advocacy group Energia Klub, which has opposed the Paks
expansion. "This decision is too early to be made."
She said that since 2008 total energy consumption, including
electricity consumption, has declined.
"We are buying nuclear fuel from Russia, we are buying
natural gas from Russia, we are getting oil from Russia, so most
of our energy resources are coming from Russia," she said.
Lazar argued that the expansion of the Paks plant would not
make Hungary more dependent on Russia.
"I don't believe our dependence would grow," he said.
"Energy security would grow. We have committed to Russian
technology at least until 2037 (when the existing plant will
shut down). This means sustaining that commitment, which is good
for the people of Hungary and the economy."
Officials at state-owned energy group MVM, which runs the
Paks nuclear plant, have said Hungary would aim to renegotiate
its gas import contract with Russian supplier Gazprom
soon, which is due to expire in 2015.