The European Commission has objected to Hungary’s €10 billion plan to expand its Soviet-era Paks nuclear power plant in a deal with Russia, and may force Budapest to revise the terms of the agreement, EU sources said yesterday (12 March). Hungarian officials strongly denied the reports.

Confirming a report in Friday’s Financial Times, one diplomat said objections by the EU’s nuclear fuel purchasing agency Euratom against a plan for Moscow to supply fuel to new reactors at the Paks facility was backed by the Commission. Hungary may have to review the deal.

In January 2014, Hungarian Prime Minister Viktor Orbán and Russian President Vladimir Putin agreed that Russia would build two new reactors at Paks, and provide a 30-year loan of some €10 billion, covering 80% of the costs.

The Soviet-constructed plant in central Hungary now supplies about 40% of the country’s electricity. Many in Hungary have protested against the plan to increase the country’s energy dependence from Russia.

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Benedek Javor, a Hungarian member of the Greens bloc in the European Parliament, has opposed the deal. He told Reuters the EU objection was to a fuel supply contract signed with Russia.

According to the FT, Euratom refused to approve Hungary’s plans to import nuclear fuel exclusively from Russia. Hungary appealed against the decision, but last week the Commission threw its weight behind EurAtom.

Reportedly, the move blocks the expansion of the Paks central. To revive it, Budapest would need to re-negotiate its contract with Moscow or pursue legal action against the Commission.

The Euratom Supply Agency (ESA) ensures a regular and diversified supply of nuclear fuels to EU users. In particular, the ESA recommends that EU facilities operating nuclear power plants maintain stocks of nuclear materials and cover their needs by entering into long-term contracts with a diverse range of suppliers. It also monitors the EU nuclear fuel market.

A government spokesman in Budapest quoted by Reuters, Zoltan Kovacs, denied that the EU executive had “blocked” the expansion of Paks.

A Hungarian cabinet state secretary Andras-Giro-Szasz also “firmly denied” the report, in a statement to Hungarian state newswire MTI.

“It is not true that the EU has blocked the Paks II construction,” Giro-Szasz, communication state secretary for the prime minister s office, told MTI.

Giro-Szasz said he has asked the FT to issue a correction, MTI added.

The European Commission and Euratom had no immediate comment.

According to reports, on 3 March the Hungarian parliament classified the contract with Russia for the expansion of the Paks nuclear plant for 30 years.