ASSESSMENTS

Russia Eyes Nuclear Energy in Central Europe

Jun 6, 2012 | 10:05 GMT

Russia Eyes Nuclear Energy in Central Europe
Russian President Vladimir Putin (R) with Hungarian Prime Minister Viktor Orban in Moscow

DMITRY KOSTYUKOV/AFP/Getty Images

Summary

Russia's state-owned nuclear energy company Rosatom announced June 5 that it would compete for the contract to expand Hungary's Paks nuclear power plant. Rosatom offered to finance the project's entire construction cost, which is expected to exceed $12 billion. Rosatom's offer comes as funds for costly energy infrastructure development in Central Europe have become scarce because of the European financial crisis. Furthermore, Central European energy diversification and liberalization efforts have threatened Russia's traditional leverage as the region's natural gas supplier.

Central Europe's electricity consumption is increasing, but the condition of its Soviet-era nuclear infrastructure is in decline. This means Russia could use atomic energy projects to extend its influence in the region's energy sector. Although initiatives like Rosatom's offer do not carry the same strategic weight as Russia's control over Central Europe's natural gas, the bid indicates Moscow's awareness of important shifts in the region and its willingness to seek alternative inroads into the Central European energy sector. 

Russia's offer to help expand Hungary's nuclear power plant comes at a beneficial time for both countries....

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