March 25, 2015 / 7:39 AM / 4 years ago

Hungary in talks on Russian nuclear fuel supply with Euratom: EU

BUDAPEST/BRUSSELS (Reuters) - Talks are taking place between Hungary and the European Union’s Euratom Supply Agency (ESA) to try to settle differences over a plan for Russia to supply nuclear fuel to the Paks power plant, a European Commission spokeswoman said on Wednesday.

A general view of the Paks nuclear power plant reactor unit number four building in Paks, 120 km (75 miles) east of Budapest, March 21, 2011. REUTERS/Laszlo Balogh

Hungary’s national news agency had earlier quoted the prime minister’s chief of staff as saying an agreement had been reached with Euratom.

A spokesman for the government told Reuters the three parties — Hungary, Euratom and Russia — “have agreed”, adding there would be further talks with the EU in coming weeks.

Last year, Hungary selected Russia’s Rosatom to build two nuclear power blocks of 1,200 megawatts each at its Paks power plant, financed partly by a favorably priced Russian loan worth 10 billion euros.

The Commission, the executive arm of the European Union which oversees Euratom, raised objections to Russia’s fuel supply deal, saying it broke EU law. It said the talks had not finished.

“The Commission understands that the Hungarian authorities and the Euratom Supply Agency have resumed talks on the nuclear fuel supply contract to ensure its compatibility with European rules,” Anna-Kaisa Itkonen, a Commission spokeswoman, said.

Hungarian news agency MTI reported the prime minister’s chief of staff Janos Lazar as saying the Commission would soon approve the fuel supply agreement.

“Hungary had accepted the concerns of the European Commission and we will settle the fuel supply deal for the Paks nuclear plant based on the Finnish model,” Lazar was cited by MTI as saying.

Lazar said the solution was also acceptable to Russia. Under the original deal signed with Moscow in January 2014, Russia would have supplied fuel for the new reactors in Paks for 20 years.

The Fennovoima reactor in northern Finland, which will be supplied and fueled by Rosatom, is expected to begin output in 2024. Fennovoima will acquire the nuclear fuel from TVEL, which belongs to the Rosatom Group. [ID:nL6N0TN2VW]

The deal Russia signed drew criticism that Hungary was pulling closer to Russia at a time when the European Union was putting pressure on Moscow to defuse a deepening conflict with Ukraine.

The Euratom Supply Agency charged with nuclear fuel supply across the EU had sought changes to the Paks supply deal, asking that players other than Russians be allowed to ship fuel to the plant in the future, the Hungarian government said this month.

The EU is also examining whether the Paks project meets European Union rules on state aid.

Reporting by Krisztina Than in Budapest and Barbara Lewis in Brussels; Editing by Janet Lawrence

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