Prime Minister Péter Magyar’s government is considering replacing Russian state-owned Rosatom as the main contractor for the Paks II nuclear expansion, according to Reuters. A final decision is expected later this year or in early 2027, as the government reviews the project’s costs, viability and potential alternatives.
Hungary is considering a major change to its flagship nuclear power project, with the government reportedly sounding out alternative suppliers to replace Russia’s Rosatom at the Paks nuclear power plant expansion.
Two sources familiar with the review told Reuters that all options remain on the table, including changing the main contractor. The government is examining the legal, technical and financial implications of such a move, as well as its potential impact on the project’s timetable and overall viability.
A source close to the administration said the government was leaning towards the conclusion that the expansion itself was necessary, but that Rosatom should not be involved.
Decision expected by early 2027
The government of Prime Minister Péter Magyar is expected to make a final decision on the Paks II project later this year or early next year, according to Reuters.
The expansion was originally estimated to cost EUR 12.5 billion. By the time the first concrete was poured in February 2026, Hungary had already spent more than EUR 2 billion on the project.
The contract was awarded to Rosatom without a public tender in 2014, under former prime minister Viktor Orbán. It has since been amended five times, while a sixth amendment has reportedly been prepared but not signed.
Replacing the Russian company would not be straightforward. According to Reuters, Hungary could have to absorb the EUR 1.1 billion already paid to Rosatom, as well as potential penalties for terminating the contract. No alternative supplier has been publicly identified.
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Rosatom says it has received no termination notice
Rosatom told Reuters that it was continuing work according to the schedule agreed with the Hungarian state. The company also said production of the main equipment for the future reactor units was under way.
“We have received no formal notification from the customer of any intention to terminate the contract, nor do we see any legally justified grounds for such a decision,” a company spokesperson said.
The statement suggests that no formal termination process has been communicated to Rosatom, despite the reported review and discussions about alternative suppliers.
A European supplier could make the project easier to manage in terms of foreign policy and sanctions, one source told Reuters. However, changing the contractor would not eliminate the project’s technical and management challenges.
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EU court ruling adds to Paks II uncertainty
The project has already faced legal and regulatory complications. In September 2025, the Court of Justice of the European Union annulled the European Commission’s 2017 approval of state aid for Paks II, adding another obstacle to the expansion.
The project is also politically sensitive because of Hungary’s close nuclear cooperation with Russia following Moscow’s full-scale invasion of Ukraine in February 2022. While EU countries have reduced their reliance on Russian oil and gas, Rosatom has so far avoided EU-wide sanctions.
Paks II is Rosatom’s most prominent nuclear power project within the European Union. Finland cancelled its contract with the Russian company in May 2022, and the two sides have since been involved in legal disputes.
Hungary still plans to rely on nuclear energy
Despite the possible change of contractor, the Magyar government remains committed to nuclear power, Reuters reported. Nuclear energy provides large amounts of low-carbon electricity around the clock, helping balance renewable sources whose output varies with the weather.
Hungary expects electricity demand to rise, making nuclear generation an important part of its future energy mix. Zsuzsa Beres, deputy state secretary for nuclear energy and international relations at the Ministry of Economy and Energy, recently said nuclear energy and its supply chain offered significant potential to strengthen Europe’s own capabilities.
As a possible interim measure while the future of Paks II is reviewed, the government is also exploring a 20-year extension of the operating licences for the four existing Russian-built reactors at Paks. Their current licences expire between 2032 and 2037.