The financing of the Paks project is changing favorably for Hungary - Paks 2 EN
The financing of the Paks project is changing favorably for Hungary
As a result of successful negotiations, the Paks II. investment’s finance agreement can be changed favorably for Hungary: it will be enough to start repaying the loan in 2031, so the cost of this can already be generated by the power plant - appeared on the government's website. According to the Ministry of Finance, the change will not affect the interest rate, the loan can still be prepaid at any time, and the availability fee will be more flexible than before.
The rescheduling of the financing was mainly required by the length of previous EU investigations.
A statement from the Ministry of Finance highlights: in terms of financing, 80% of the development is an interstate loan provided by Russia. Of the €12,5 billion investment, €10 billion will be raised by the state in the form of low-interest financing. According to the amendment, the interstate loan will be available until 2031, until the end of the project implementation, under unmodified conditions.
Regarding the availability fee, the new scheme is more flexible than before, more favorable for Hungary, as the annual credit line can be revised until July of the current year. In addition, it is enough to start repaying the loan in 2031, instead of 15 March 2026, so that the already operating nuclear power plant will be able to extract the cost of this.
The Hungarian government sees the Russian loan mainly as a safety net, as we always draw as much of the EUR 10 billion credit line as is needed to pay the bills that arise in the given period. The loan agreement is also extremely beneficial due to its outstandingly long term, and Hungary has the right to prepay the loan already taken out at any time, at face value, without additional fees. This ensures that the project is implemented with the most favorable funding at all times.
Hungary has prepaid all bills so far or the prepayment is already in progress, so the amendment can be made after the approval of the Parliament so that Hungary has no debts to Russia regarding Paks II. - according to a statement published on Kormany.hu.