Hungary begins the early repayment of the loan

2/6/18 7:00 AM
Thanks to the good performance of the Hungarian economy and its favorable international financial market situation, Hungary is pre-paying a total of 78.2 million euro of loan which was the drawdown to finance the Paks II. investment. With the early repayment the country has a significant interest rate savings.

As Mihály Varga minister of national economy told Világgazdaság, the loan agreement proclaimed in Act XXIV. of 2014 contains, that the Hungarian party has the right to repay any amount received at nominal value and without any additional charges. The minister informed Anton Siluanov Russian minister of finance via letter about the Hungarian intent. According to the contract, the transaction can take place 90 days later. Mihály Varga said, Hungary pays back the total amount of the borrowed loan, 78,2 million EUR (24,2 billion HUF).

Our country will continue to use the possibility of early repayment until it is possible and convenient for the interest environment - the minister added. Maintaining a loan agreement with the Russian party is however necessary in the long term as it provides a safety net for the Paks II. project and is available on fixed terms even if the current favorable market financing conditions may change – Mihály Varga said in the business newspaper.

As it is known, the Hungarian-Russian loan agreement was signed on 28 March 2014, within which the Russian Party will provide the Hungarian Party with a maximum of EUR 10 billion of loan for the financing of works, services and equipment necessary for the design, construction and commissioning of power plant units 5 and 6 of the Paks Nuclear Power Plant. The credit agreement was approved by the Hungarian Parliament on 23 June 2014 with 110 votes in favor, 29 against and 19 abstentions.

Dr. Attila Aszódi announced at the Budapest conference of Portfolio Energy Investment Forum 2017 the payment of the first ten contractor’s accounts of the Paks II. project has begun. The state secretary responsible for the maintenance of the performance of the Paks Nuclear Power Plant said at Portfolio’s event, that according to the decision of János Süli, minister without portfolio responsible for the design, construction and installation of the two new nuclear power plant units of Paks on 6 November 2017, the first payment of the contractor’s accounts can begin, 80% is paid from Russian intergovernmental loan, while 20% is paid from national budget sources.