Russian Duma ratifies protocol to agreement with Hungary on loan for Paks-2 NPP

MOSCOW. July 21 (Interfax) - Russia's State Duma has ratified a protocol to an agreement on a loan to finance the construction of the Paks-2 nuclear power plant in Hungary.

The document grants Hungary a deferment on interest accrued from March 1, 2022 until the protocol comes into effect.

The government introduced the document (No. 403010-8) to the parliament.

The Russian government in March 2014 provided the Hungarian government with a state loan of up to 10 billion euros until 2030 to finance the construction of power units 5 and 6 of the Paks NPP.

"The debtor until February 2022 honored its payment obligations under the agreement on time and in full, exercising its right to pre-pay loan debt," an explanatory note says.

But restrictions imposed in February 2022 made it impossible to receive payments from debtor countries, including Hungary, in both dollars and euros.

The Russian Finance Ministry held a series of bilateral consultations with the Hungarian Finance Ministry with the participation of the Russian contractor and the Hungarian customer to agree on new conditions and procedures for the Hungarian side to honor its payment obligations.

As a result, a protocol was signed providing for the repayment by the Hungarian side of the debt on interest accrued from March 1, 2022 until the date the protocol took effect - 1.6 million euros as of July 1, 2023 - as well as commission for not drawing loan funds - 0.9 million euros - for 2021 and 2022 no later than 30 calendar days after the protocol takes effect.

Russia plans not to accrue default interest on outstanding loan payments if they are made within 30 days from the date the protocol comes into effect.

All provisions of the agreement relating to the procedure for acceptance of the construction contract for financing are terminated.

Loan payments will be made using an account of the Hungarian side in euros to be opened in a Russian bank.

The Hungarian parliament in 2009 approved the construction of two new power units at the Soviet-designed Paks NPP. Project costs were estimated at 12.5 billion euros.