Hungary could face claims worth several billion euros if it terminates its contract with Russia’s Rosatom to build the Paks II nuclear power plant, according to a Hungarian nuclear energy expert. The warning comes as the government considers the future of the project, with a decision expected by the end of the year.
Could the government end the cooperation with Rosatom?
Zsolt Hárfás told InfoRádió that the cancellation of a similar Russian-backed nuclear project in Finland could offer important lessons for Hungary. The proposed Paks II expansion, worth more than EUR 10 billion, is intended to add two new reactor units to Hungary’s existing nuclear power station.
Hárfás said compensation claims could cover design and preparatory work, payments already made, completed work, equipment delivered or still being manufactured, and potential lost profits. The final financial consequences would depend on the terms of any termination and the outcome of subsequent legal proceedings.
Finnish project serves as a warning
In May 2022, Finnish company Fennovoima terminated its contract with Rosatom for the construction of a Russian-designed VVER-1200 reactor. The project had already faced political difficulties, with a Finnish government minister signalling earlier that year that they did not support granting it a construction licence.
According to Rosatom, the International Chamber of Commerce ruled that the contract’s termination was unlawful. The Russian company has said it intends to provide further evidence in support of its compensation claim.
The cancelled Finnish project would have provided an estimated 9.5 terawatt-hours of electricity annually, Hárfás noted. Its termination therefore carried potential consequences beyond the financial dispute, including the loss of planned generating capacity.
The expert believes Hungary should take this experience into account before making a decision on Paks II. Prime Minister Péter Magyar has indicated that ending the agreement with Rosatom is among the possibilities being considered.
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Energy security also at stake
Hárfás argued that cancelling Paks II could have long-term implications for Hungary’s electricity supply as well as exposing the country to substantial compensation claims.
Hungary currently relies on electricity imports for a significant part of the year, including supplies from Austria. According to the expert, bringing the two new reactors online could reduce that dependence and potentially allow Hungary to export more electricity to neighbouring countries.
The project has faced political and professional opposition both within Hungary and abroad. Austria, in particular, has consistently opposed the expansion. However, the debate also reflects broader questions about the role of Russian nuclear technology in Europe and the future direction of the continent’s energy policy.
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What will happen to the Paks II project?
The Hungarian government’s decision, expected by the end of 2026, will determine whether the project proceeds under its existing arrangements or faces a major change of direction.
While Hárfás strongly supports completing Paks II, the scale of any potential compensation claim remains uncertain. The Finnish case is a warning, rather than proof that Hungary would face the same legal outcome. Any financial liability would ultimately depend on the contract, the circumstances of termination and the relevant legal decisions.
Read also: Kremlin warns Hungary’s ‘unfriendly steps’ could hurt economic ties with Russia
The new prime minister is doing many things well, but not so by advancing homosexual causes in schools and mismanaging relations with Russia. The situation for Hungary is not rocket science : it is a small and poor country that needs to maintain cordial and constructive relations with the United States, China, the EU, and, yes, Russia, too.