EU investigating state financing in Hungary’s expansion of nuclear power plant

BUDAPEST, Hungary – The European Union says it has launched an investigation into the role of state financing in Hungary’s expansion of its only nuclear power plant.

The EU Commission said Monday it has concerns that the use of Hungarian state funds to pay for construction of two new reactors at the nuclear plant in the city of Paks could distort competition in Hungary’s energy market.

EU competition chief Margrethe Vestager said that “given the size and importance of the Paks project, the Commission has to carefully assess whether Hungary’s investment is indeed on market terms or whether it involves state aid.”

Hungary signed a deal with Russia in 2014 to expand the nuclear plant, including a loan of 10 billion euros ($10.6 billion) from Moscow for some 80 per cent of the costs.