European Commission approves Hungary state aid to Paks upgrade project

Brussels, March 6 (MTI) – The European Commission has granted its approval to the Hungarian state’s providing a subsidy to the Paks nuclear power plant upgrade project, according to a statement issued by the EC on Monday.

“The European Commission has concluded that Hungary’s financial support for the construction of two new nuclear reactors in Paks (Paks II) involves state aid. It has approved this support under EU state aid rules on the basis of commitments made by Hungary to limit distortions of competition,” the statement said.

The EC said that according to the agreement to avoid overcompensation of the operator of Paks II, any potential profits earned by Paks II will either be used to pay back Hungary for its investment or to cover normal costs for the operation of Paks II. Profits cannot be used to reinvest in the construction or acquisition of additional generation capacity.

To avoid market concentration, Paks II will be functionally and legally separated from the operator of the Paks nuclear power plant (the incumbent MVM Group) and any of its successors or other state-owned energy companies.