US removes Russia sanctions that prevented main NPP construction in Hungary
(MENAFN) The United States has lifted sanctions that previously blocked financial transactions related to Hungary’s Paks-2 nuclear power plant, clearing the way for the stalled project to proceed. The US Office of Foreign Assets Control (OFAC) issued a general license on Friday permitting Russian banks, including Gazprombank, to engage in transactions linked to civilian nuclear energy.
The Paks-2 project, initiated in 2014 through a bilateral agreement with Russia, involves the construction of two reactors by the Russian state nuclear company Rosatom. A €10 billion loan from Russia is funding the majority of the estimated €12.5 billion cost. Construction had been on hold due to US sanctions on Gazprombank, the primary financier, prompting repeated appeals from Hungary for exemptions.
Hungarian Foreign Minister Peter Szijjarto confirmed on Sunday that the restrictions had been lifted. He criticized previous US decisions that placed Hungary in a “very difficult” position by jeopardizing its energy infrastructure. However, Szijjarto praised the new US administration for treating Hungary as a “friend” and reversing the sanctions related to Paks-2.
He emphasized that the nuclear plant is essential for Hungary’s long-term energy security and is expected to help the country meet most of its electricity needs by the mid-2030s.
Hungary has consistently opposed EU and US sanctions on Russian energy since the start of the Ukraine conflict in 2022. It continues to rely heavily on Russian gas and oil, secured through EU exemptions and long-term agreements with Gazprom. Recently, Hungary blocked an EU initiative to phase out Russian gas by 2027, citing energy security concerns.
The OFAC license also lifts restrictions on civil nuclear transactions involving several major Russian financial institutions, including the Russian Central Bank, Sberbank, VTB, Alfa-Bank, and others. The move comes amid signs of warming ties between Washington and Moscow, as both sides explore diplomatic avenues to end the ongoing Ukraine conflict.
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