BRUSSELS, September 11. /TASS/. The Court of Justice of the European Union in Luxembourg has ruled that Hungary’s state subsidies for the expansion of its Paks Nuclear Power Plant are not in compliance with European Union regulations, according to the court’s decision.

The judges ruled that the European Commission should have taken into consideration EU public procurement rules when it approved Budapest’s plans to subsidize the construction of two new nuclear reactors.

"The Commission should have ascertained whether that direct award, made without a public tender procedure, complies with EU public procurement rules," the court said. "The Commission took the view·[that it did, but] that decision is not sufficiently reasoned."

Thus, the court upheld Austria’s appeal and revised the ruling on the compliance of the Russian-Hungarian agreement on financing the construction of Paks-2 using loan funds with EU law. Vienna had previously attempted to challenge this decision, asserting that project financing through a Russian loan violated European Union rules. In 2022, the court dismissed the lawsuit, but Austria subsequently filed an appeal.

On Paks NPP and US sanctions

Earlier, in the second half of November 2024, the United States imposed sanctions on Gazprombank, which handled payments between Hungary and Russia for oil and gas supplies, as well as for the construction of the second phase of the Paks NPP. Moscow and Budapest were forced to seek alternative payment methods. Additionally, on January 10, the United States announced a broad package of sanctions targeting the Russian oil and gas sector, as well as the management of Rosatom, including the state corporation’s CEO, Alexey Likhachev.

While solutions were found regarding oil and gas payments, financing for the construction of the Paks plant remained unresolved. As a result, the construction of the two new units at Paks has been idle in recent months. Hungary requested that the administration of US President Donald Trump lift sanctions on Gazprombank, which serves as the guarantor of financing for the Paks-2 project.

The Paks plant, built by Soviet specialists in the 1980s, accounts for half of all electricity generated and one-third of the electricity consumed in Hungary. Located on the banks of the Danube, 100 km south of Budapest, the plant operates four units with VVER-440 reactors.

Simultaneously, construction is underway for its second phase - Units 5 and 6 under the Paks-2 project, developed by Rosatom. Moscow has confirmed its readiness to finance this project, estimated at 12.5 bln euro, which was originally planned to be funded 80% through a Russian loan. According to projections, following the commissioning of the two new VVER-1200 nuclear reactors in the early 2030s, the generating capacity of the Paks nuclear complex will increase from the current 2,000 MW to 4,400 MW. The share of electricity generated by nuclear power plants is expected to reach 70% of the country’s energy balance.