Page 16 - bne_newspaper_May_10_2019

Central Europe
May 10, 2019 www.intellinews.com I Page 16
Hungary and Russia amend loan agreement on Paks nuclear power plant
bne IntelliNews
Hungary and Russia have agreed to change the loan agreement for the expansion of Hungary's sole nuclear power plant Paks, local media re- ported on May 6.
According to the report, Hungary will start repay- ing the loan once the two blocks are connected to the grid and begin production. Hungary signed a separate agreement with Russia, which is financ- ing €10bn of the €12.5bn project.
State-owned Rosatom was selected to add two blocks to the Paks plant in 2014. The largest ever investment in Hungary would increase capacity by 2,400Mw.
The new blocks were supposed to start operation in 2025-2026, but that deadline will certainly be missed.
Rosatom has yet to obtain the final construction license permit. The government commissioner for the expansion acknowledged that the project two years behind schedule.
Hungarian officials blamed the European Com- mission's prolonged probe of the project, but long and tedious examination by local authorities con- cerning the safety of the project also contributed to missing deadlines.
The government began talks on rescheduling the Russian loan earlier this year. Based on the 2014 agreement, Hungary would have had to start re- payment when the new blocks were operational.
There is no information on when talks on re- scheduling the repayment took place. This is no surprise since the government has not been communicating about the delay of the project.
The four existing blocks of the Paks power plant account for some 40% of the country's electricity production but the oldest blocks will reach matu- rity by the early 2030s. The government says that without the expansion of Paks, Hungary would face serious power supply problems within five
to 10 years.
The country needs to add new power plant ca- pacities primarily to replace ageing power plants and secondly, due to the rise in demand, system operator Mavir said in a report in February.
Of the 8,600 Mw capacity available at present, some 4,000 Mw will remain in operation for the next 15 years. The baseline scenario of Mavir is that electricity consumption will rise at 50-60% of the annual GDP growth or 0.6-1% annually. Total electricity consumption (including net electric-
ity consumption, the electricity needs of power plants, but also network losses) is expected to reach 46.7 TWh by 2023, 48.9 TWh by 2028, and 50 Twh by 2030, according to the forecast.
In future, Hungary’s energy strategy is based on two main pillars, nuclear and renewables, while coal fired plants will be phased out. Hungary also aims to boost the share of renewable energy as the second most important source.