Greater than a decade after its launch, the Paks II funding continues to be in an early, unsure stage, although building has formally begun. The challenge was initiated as a political resolution in 2014, with questionable financial justification. In comparison with the unique deadlines, the funding has now gathered an roughly 10-year delay. The 2026 “first concrete” milestone represents extra of a proper change in standing than actual progress. Prices have elevated considerably, and the whole funding price stays unknown. Perger András studies.
A birds eye view of the positioning on 17 October 2024. Credit: Paks II. Ltd, CC-BY-ND 4.0.
The present state of the challenge exhibits that, regardless of the official begin of building, important obstacles to implementation stay, and the way forward for the funding continues to be an open query. General, the completion, prices, and financial rationale of the challenge – affected by quite a few critical dangers, together with geopolitical ones – stay extremely unsure.
The change of presidency in Could 2026 offers a chance to evaluate the scenario and make the mandatory choices after a complete assessment of the challenge. Paks II is extremely unlikely to be continued in its present type, however the authorities faces a troublesome scenario, as all obtainable choices contain important dangers, uncertainties, and anticipated prices.
Building ought to be suspended through the assessment. From this level on, as a lot knowledge and knowledge as potential about Paks II have to be made public, and the choices taken after the assessment have to be communicated clearly and transparently.
Background
Preparatory planning for the Paks II challenge started in 2008, and Parliament granted approval for the launch of the challenge in 2009. Though a world tender was promised within the following years, in 2014 the challenge was awarded to Rosatom with none tendering process. The intergovernmental settlement between Hungary and Russia on the matter, in addition to the settlement on financing, have been concluded at first of the 12 months, adopted by the signing of the EPC (usually known as “turnkey” contracts, stands for Engineering, Procurement, and Building) contract on the finish of the 12 months. The agreements supplied for the turnkey building of two new items with a capability of 1,200 MW every (VVER-1200 sort), with Rosatom as the principle contractor, at a worth of EUR 12.5 billion, financed 80% by a Russian mortgage.
The challenge was criticized from the outset: it was not preceded by a complete financial and feasibility evaluation; the number of the Russian accomplice was politically motivated; it entails important technological, monetary, and geopolitical dangers; and challenge administration was unprepared to deal with these dangers.
The Energiaklub and different unbiased analysts highlighted the challenge’s structural issues, together with contractual asymmetries and the final dangers related to nuclear investments, already at the moment.
Delays in implementation
The challenge has skilled important delays over time. In line with the unique plans, the items ought to have began business operation by 2026 on the newest; nevertheless, by 2026 the challenge has gathered roughly a decade-long delay. No detailed, official schedule has been made public, and the completion date is barely referred to in imprecise, most likely unrealistic estimates (“early to mid-2030s”).
The delays aren’t sudden, as they’re typical of nuclear investments. Within the case of Paks II, key components embody EU procedures inflicting stoppages; nuclear licensing processes totally different from Russian apply, for which Rosatom proved unprepared; shortcomings in challenge administration; the geopolitical context ensuing from the Russia–Ukraine warfare; and a later requirement to construct a concrete safety wall across the excavation pit to guard the working Paks I reactors.
Prices have additionally elevated considerably: the unique EUR 12.5 billion price range is not lifelike, and unofficial estimates recommend prices may attain as much as EUR 25 billion; a number of associated prices are additionally excluded from the official whole estimate.
General, the financial rationale of the challenge has additional deteriorated, not solely because of price will increase, but in addition due to the fast unfold of renewable vitality and vitality storage applied sciences.
Standing of the challenge
On 5 February 2026, the pouring of the so-called “first concrete” started for the primary unit (Paks-5). In line with the Worldwide Atomic Power Company, this implies the challenge has formally entered the “below building” section.
Nevertheless, this milestone doesn’t point out that the challenge is considerably nearer to completion. A number of related “beginning factors” have already occurred (e.g. website preparation, ordering of main gear), but these haven’t accelerated progress. Just one unit is taken into account “below building,” whereas the beginning of building of the second unit (Paks-6) stays unknown, and the beginning of business operation is unsure. In the meantime, the challenge continues to face important dangers, and basic questions stay unanswered.
Key dangers
Along with the standard financial, monetary, and feasibility dangers related to new nuclear energy vegetation, additional challenges characterize the challenge. These embody geopolitical dangers stemming from the Russian contractor and potential EU and US sanctions, which have to this point been managed by way of advert hoc exceptions, however with out ensures for the long run.
A very necessary concern is the lack of the instrumentation and management (I&C) system provider (Siemens), which has created extreme technological uncertainty. The I&C system is the core of the plant’s operation, and at the moment no answer is seen that will meet EU necessities.
Furthermore, new authorized uncertainty arose when, in September 2025, the European Courtroom of Justice annulled the European Fee’s 2017 approval of state support for the challenge. The case was introduced by Austria, which challenged the approval. In its closing judgment, the Courtroom discovered that the European Fee had authorized the state support unlawfully by failing to correctly examine compliance with public procurement guidelines – specifically, that Hungary had awarded the challenge to a Russian important contractor by way of a direct award with out an open tender.
It stays unclear how the Fee will deal with the scenario; nevertheless, based mostly on statements to this point, it’s potential that the problem of state support for the challenge shall be topic to a brand new complete assessment, which may end in one other “standstill” interval lasting a number of years.
Contemplating these two latest, significantly concrete developments, it’s particularly unclear why Hungarian decision-makers didn’t take them under consideration and the way the challenge may enter its formally “below building” section on 5 February. General, there’s a concern that the dominant function of the Russian accomplice – i.e., the asymmetrical relationship embedded within the contracts – has contributed to this resolution. This isn’t unprecedented: through the challenge, delays have already necessitated a number of modifications of deadlines and different situations, and these adjustments have persistently been extra beneficial to the Russian facet.
Evaluate
The change of presidency in Could 2026 gives a chance to reassess the scenario and make choices based mostly on a full assessment of the challenge. This was pledged by the TISZA Celebration in its program, and a short authorities decree laying the groundwork for it has already been issued. The development have to be suspended throughout this course of. Impartial consultants ought to be concerned, all potential situations have to be examined, and most transparency ought to be ensured. The findings and penalties of the assessment have to be communicated clearly and actually.
Eventualities
In its present type, the Paks II challenge is unlikely to be continued and requires a basic reassessment. Given the scenario created to this point, the federal government faces a troublesome place, as all obtainable choices contain important dangers, uncertainties, and sure prices.
The entire cancellation of the challenge would have authorized and monetary penalties, significantly because of already-ordered work and gear. Compensation claims can’t be excluded, though the sanctions surroundings and drive majeure arguments might mitigate these. Cancellation would additionally contain managing the results of abandoning the challenge, together with dealing with partially-completed work.
Changing the principle contractor would suggest introducing a brand new reactor sort, successfully restarting the challenge. This could require new licensing procedures, EU investigations, and several other years of delay, whereas components of the already accomplished work wouldn’t be instantly usable, leading to further prices.
Persevering with with Rosatom would solely be potential below considerably revised situations; nevertheless, based mostly on expertise – delays, high quality points, sanctions dangers, and the lack of key suppliers – this feature seems to have restricted feasibility.
The views and opinions on this article don’t essentially mirror these of the Heinrich-Böll-Stiftung European Union | World Dialogue.
This text was first revealed on cz.boell.org
