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Hungary’s new government is considering replacing Russia’s state nuclear corporation Rosatom as the main contractor for the Paks II nuclear power plant, raising questions about whether Budapest is preparing to break with Moscow or simply seeking more favorable terms for a project already plagued by delays and rising costs.

According to an October 21 Reuters investigation, Prime Minister Péter Magyar’s government has begun exploring alternative suppliers as part of a comprehensive review of the €12.5 billion project, awarded to Rosatom by former Prime Minister Viktor Orbán in 2014.

The uncertainty has reached Rosatom’s leadership. Director General Alexei Likhachev acknowledged on October 23 that the project could either accelerate or be abandoned altogether, adding that the corporation had received no response to its requests for talks with the Hungarian government.

But Bellona nuclear expert Dmitry Gorchakov cautions against interpreting the reports as evidence that Hungary has decided to abandon Rosatom.

“I fear these rumors about a possible replacement, attributed to anonymous sources, are simply part of the debate now taking place indirectly between Hungary’s new government and Rosatom,” he said.

The high cost of breaking with Russia

Paks II involves two Russian-designed VVER-1200 reactors intended to expand Hungary’s nuclear generating capacity. Construction has suffered repeated delays, with the first concrete poured only in February 2026.

By then, Hungary had already spent more than €2 billion on the project, including approximately €1.1 billion paid to Rosatom. Gorchakov says the threat of cancellation may be a negotiating tactic rather than a settled policy.

“Refusing to work with Rosatom would be the most radical measure, one that apparently was not even discussed during the election campaign,” he said. “It may be useful as a bargaining position, but that does not mean it will actually happen.”

He estimates that replacing the Russian contractor could delay construction by another five to ten years—about how long it would take to approve an alternative design and begin building.

There is at least one European precedent for breaking with Rosatom on a major construction project—Finland’s Hanhikivi plant, which Helsinki cancelled in 2022 with the outbreak of the Ukraine war. But unlike Finland, Gorchakov notes, Hungary remains deeply dependent on Rosatom. Its four existing reactors operate on Russian nuclear fuel, while Rosatom is expected to participate in extending their operating lives.

“Breaking relations with Rosatom could involve much more than simply abandoning a new Russian nuclear power plant,” Gorchakov said.

Such a rupture, he added, could trigger litigation, diplomatic disputes—just as Finland’s divorce with Rosatom did.

Geopolitical calculations

Bellona nuclear expert Alexander Nikitin agrees that negotiations over the future of PAKS II may be underway but argues that economic considerations alone cannot determine the outcome.

“Geopolitics will enter into these economic negotiations,” he said. “And that could very well mean Rosatom loses.”

Nikitin believes Russia’s invasion of Ukraine has fundamentally changed how European governments assess long-term dependence on Russian technology.

Building a Russian nuclear power plant establishes relationships with Moscow lasting many decades, encompassing fuel supplies, maintenance, specialized equipment and technical expertise. For countries seeking to reduce Moscow’s influence, those commitments increasingly carry political risks.

“Experience from Ukraine and other countries previously dependent on Rosatom shows that it is possible to replace the corporation at any stage,” Nikitin said. “Of course, the question is how much it costs.”

But he argues that the price of replacing Rosatom must be weighed against the long-term political and strategic costs of maintaining dependence on Russia.

Is there a compromise to be had?

Hungary is already pursuing alternatives to Russian supplies. On October 29, Magyar’s government submitted legislation to formalize a nuclear cooperation agreement with the United States, covering civilian nuclear technology, including small modular reactors.

The agreement, originally signed under Orbán, encourages the use of American technology in future nuclear projects. It does not, however, resolve the question of Paks II.

Gorchakov believes Budapest may ultimately seek a broader compromise, using the project’s future to negotiate better terms with Rosatom while gradually diversifying fuel supplies and reducing Russian involvement in the existing plant.

Rosatom also has reasons to compromise. Paks II remains its only nuclear power plant construction project in the European Union, making its preservation commercially and politically important.

The dispute comes amid continuing uncertainty over the project’s regulatory and environmental future. A September 2025 European Court of Justice ruling annulled the European Commission’s approval of Hungarian state aid, while exceptionally low Danube water levels have raised questions about cooling arrangements for the expanded station.

Gorchakov argues that these concerns should form part of Hungary’s review, alongside the project’s finances.

Hungary’s decision, expected by late 2026 or early 2027, will therefore determine more than the future of two reactors. It will test how far a European country deeply embedded in Russia’s nuclear industry is prepared to go to reduce that dependence.

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Russia’s state nuclear corporation Rosatom made progress on two of its international reactor projects in recent weeks, bringing new generating units closer to commercial operation in Bangladesh and China. Yet the contrasting experiences of those two countries illustrate the uneven fortunes of Russia’s nuclear exports.

Meanwhile, efforts by Germany and the United States to reduce their nuclear sectors’ exposure to Russia have been complicated by existing commercial dependencies and political decisions that leave important channels of cooperation intact.

And new reporting on a Rosatom-owned carbon fiber plant in Tatarstan has raised further questions about the corporation’s involvement in Russia’s war against Ukraine, including its access to Chinese industrial materials used in military drone production.

Together, these developments illustrate the competing pressures shaping Rosatom’s international business as it seeks to expand its overseas presence while facing sanctions, logistical obstacles and growing scrutiny of its military connections.

Two nuclear milestones, two very different experiences

On October 11, the first reactor at Bangladesh’s Russian-built Rooppur nuclear power plant reached minimum controlled power, a crucial step toward eventual electricity generation.

The milestone followed months of commissioning difficulties. During testing in July, engineers discovered that two of three pressure relief valves in the reactor’s primary cooling circuit were not functioning properly. Repeated tests failed to resolve the problem, forcing Rosatom to dispatch additional specialists. The malfunction delayed commissioning and affected work on the second reactor, after components originally intended for that unit were transferred to the first.

The project also encountered logistical problems in September when a shipment of Russian nuclear fuel was delayed because its aircraft lacked permission to cross Pakistani airspace. The shipment eventually reached Bangladesh in early October using an alternative route.

China, meanwhile, presented a markedly different picture. On October 8, Unit 7 of the Tianwan nuclear power plant, outfitted with a Russian-designed VVER-1200 reactor, was connected to China’s electricity grid. Construction there began in May 2021, making it the fastest Russian-designed VVER-1200 project to reach grid connection, including those built in Russia itself.

Bellona nuclear expert Dmitry Gorchakov attributes much of the difference to how the projects are organized.

“The key difference in Rosatom’s Chinese projects is the high degree of localization,” Gorchakov writes in the September Nuclear Digest. “The Chinese side takes responsibility for most of the construction, supplies, project management and financing, while Rosatom provides the main nuclear island equipment and technological support.”

In Bangladesh, by contrast, Rosatom bears responsibility for a far larger share of the project, making delays in equipment supplies, financing and logistics more difficult for the customer to overcome.

For Gorchakov, the contrast illustrates how the success of Russian nuclear exports increasingly depends on the capabilities of the countries purchasing them.

Western sanctions leave important gaps

Even as Rosatom advances its overseas projects, Western efforts to limit cooperation with the corporation remain inconsistent.

In Germany, environmental organizations have challenged a decision allowing Advanced Nuclear Fuels, a subsidiary of France’s Framatome, to expand its fuel fabrication plant in Lingen to manufacture fuel for Russian-designed VVER reactors using Rosatom technology.

The environmental organization BUND filed suit in September, citing concerns about security risks, Russian influence and shortcomings in the environmental review. Yet on October 5, authorities in Lower Saxony permitted the project to proceed immediately, despite the ongoing legal challenge.

Gorchakov sees the decision as evidence of a broader contradiction in European policy.

“The story of the nuclear fuel plant in Lingen shows the gap between political statements about the risks of cooperation with Russian companies and decisions that allow such cooperation to develop in practice,” he writes. The United States has displayed similar contradictions.

On September 18, President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which includes measures targeting Rosatom’s leadership and reaffirms restrictions on Russian uranium imports. But sanctions against Rosatom executives will not take effect until January 2028, and the legislation allows presidential exemptions on national security grounds.

The final law is also considerably weaker than earlier proposals, which contemplated sanctions against foreign purchasers of Russian uranium and sweeping tariffs against countries trading in Russian energy products. Gorchakov questions whether the measures will meaningfully reduce Rosatom’s international business.

“The weakening of the original proposals during the legislative process, together with the Trump administration’s unwillingness to use the available instruments of pressure on the Kremlin, calls into question the effectiveness of the new sanctions against Rosatom,” he says.

Chinese materials and Rosatom’s wartime connections

The question of Rosatom’s place in Russia’s war economy has become increasingly difficult to separate from its civilian nuclear business.

In September, Politico published two investigations based on internal Russian documents obtained by the Ukrainian Center for Security and Cooperation concerning Alabuga-Volokno, a carbon fiber manufacturer in Tatarstan belonging to Rosatom’s UMATEX composites division.

According to the documents, China’s state-owned Jilin Chemical Fiber Group arranged shipments of up to 46 tonnes of polyacrylonitrile precursor, a raw material used to manufacture carbon fiber. Carbon fiber has numerous civilian applications, but it is also used in Russian attack drones.

The plant is already subject to Western sanctions and export restrictions. Rosatom has denied violating applicable laws.

A subsequent investigation revealed plans to expand Alabuga-Volokno’s production capacity by as much as 500 tonnes annually by 2029. According to Politico, internal project documents identified import substitution for dual-use products and supplying Russia’s aviation and defense industries among the reasons for the expansion.

The findings do not establish that every shipment of Chinese precursor is destined for military production. They do, however, highlight the difficulty of separating Rosatom’s civilian industrial operations from supply chains that support Russia’s armed forces.

Bellona expert Alexander Nikitin has argued that Russia’s invasion of Ukraine has fundamentally altered the place of nuclear infrastructure in international security.

“Nuclear energy facilities have become a factor in war,” Nikitin writes in his commentary on the Ukrainian nuclear situation. “They have begun to influence military planning, political decision-making, the nature of the use of force and assessments of the limits of acceptable risk.”

The Alabuga disclosures extend that concern beyond nuclear facilities themselves to the wider industrial activities of Russia’s state nuclear corporation.

Taken together, Rosatom’s overseas construction milestones, the limitations of Western sanctions and its connections to military supply chains reveal a corporation operating as an international nuclear supplier, an instrument of Russian industrial policy and a participant in sectors supporting the country’s war effort—all at the same time.

For governments seeking to reduce dependence on Russian nuclear technology, the challenge is no longer simply finding alternative reactor designs or fuel suppliers. It is determining how far Rosatom’s commercial relationships extend into the broader economic and strategic interests of the Russian state.

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Armenia is reconsidering its plans for a new nuclear power plant after a fresh proposal from Russia’s state nuclear corporation Rosatom and a sharp revision of the country’s future electricity needs, potentially opening the door to decades of continued dependence on Russian nuclear technology.

The discussions come as Armenia works to extend the operating life of its aging Metsamor nuclear power plant, whose sole functioning reactor was commissioned in 1980 and is now expected to remain in service until at least 2036.

During a September 29 meeting in Yerevan, Rosatom Director General Alexey Likhachev presented Armenian Prime Minister Nikol Pashinyan with proposals for new nuclear generating capacity, including a Russian-designed VVER-1000 reactor capable of producing approximately 1,000 megawatts of electricity.

The proposal is one of several under consideration by Armenia, which has also explored nuclear cooperation with the United States, France, South Korea and China.

Pashinyan emphasized that no decision had been made and that the government would evaluate competing proposals on economic and technical grounds, including their cost, safety, construction schedules and guarantees.

But according to Bellona nuclear expert Alexander Nikitin Armenia’s eventual decision will be shaped as much by geopolitics as by its electricity requirements.

A changing calculation

Until recently, Armenia had favored replacing Metsamor with one or more small modular reactors, whose relatively modest generating capacity appeared better suited to the country’s limited electricity market.

But on October 1, Pashinyan acknowledged that the government’s calculations had changed.

According to the prime minister, new investment projects, including facilities associated with artificial intelligence, have substantially increased Armenia’s anticipated electricity requirements.

Just over a year ago, he said, Armenia had an electricity surplus. Now, investment commitments have created the prospect of a deficit.

“I have said dozens of times before that we need nothing more than a modular nuclear power plant,” Pashinyan said. “But now, due to this change, we have to understand that, most likely, a modular plant will not be enough for us.”

He suggested that a reactor with a capacity of 1,000 megawatts might prove a more practical alternative, although experts are still examining the question.

The shift could improve Rosatom’s prospects. Unlike many proposed small modular reactor designs, Russia’s conventional VVER technology has an established operating history, something Moscow has emphasized in promoting its nuclear exports.

Yet a large reactor would also present challenges for Armenia’s relatively small electricity grid, requiring careful consideration of how the country would manage the sudden loss of such a substantial generating unit.

Nikitin, however, believes Armenia should continue exploring smaller reactors rather than concentrating its future nuclear generating capacity in one large facility.

“Given Armenia’s heightened seismic activity, I believe the country would be better served by establishing several power-generation centers using small modular reactors based on designs currently being offered by nuclear companies from the United States, South Korea, France or even China,” he said.

He also suggested that Armenia could establish an international consortium to develop small modular reactors, potentially including Rosatom, since cooperation with the Russian corporation will remain necessary as long as Metsamor continues operating.

Keeping Metsamor running

Meanwhile, Armenia remains dependent on its existing nuclear plant.

Metsamor’s second reactor, a Soviet-designed VVER-440 unit, began operating in 1980. Both of the plant’s reactors were shut down following the devastating 1988 Armenian earthquake, but the second was restarted in 1995 amid severe electricity shortages.

Today, it supplies a substantial share of Armenia’s electricity, estimated by Nikitin at approximately 30 to 40 percent.

Rosatom is participating in a modernization program intended to extend the reactor’s operation until 2036, when it will have been in service for 56 years, excluding its period of shutdown.

Likhachev has said he sees no technical obstacles to reaching that target. He also disclosed that Armenian officials are examining the possibility of a further extension until 2046.

Such an undertaking would require extensive additional investment in safety systems, equipment modernization and spent-fuel storage. Likhachev acknowledged that the necessary expenditures could substantially increase the cost of electricity generated by the plant.

Nikitin describes the extension as an interim measure driven by Armenia’s difficult energy circumstances rather than a desirable long-term solution.

“Extending the operating lives of nuclear power plants has become common practice in virtually every country. There is nothing unusual about it in itself, although aging equipment can certainly be expected to cause problems, particularly when subjected to external stresses such as earthquakes,” he said.

He warned that Armenia’s seismic conditions and the limitations of Metsamor’s original Soviet-era design make replacing the plant particularly important.

“The sooner Armenia develops a new nuclear power infrastructure, the less likely it will be to encounter problems with a plant built to an outdated design that did not incorporate many of today’s safety requirements,” Nikitin said.

A decision with lasting consequences

For Armenia, choosing a replacement reactor involves more than selecting generating capacity.

In recent years, Pashinyan’s government has moved toward closer relations with the European Union while effectively freezing its participation in the Russian-led Collective Security Treaty Organization. Armenia has also discussed the possibility of withdrawing from the Eurasian Economic Union.

Nikitin argues that Moscow views these developments with concern and regards nuclear cooperation as one means of maintaining its influence over Armenia.

“Russia is doing everything it can to preserve the country’s dependence on Rosatom, pursuing various initiatives and offering proposals through the nuclear corporation that appear attractive at first glance,” he said.

In Nikitin’s assessment, the strategic purpose of these offers is to discourage Armenia from moving further away from Russian-led institutions and toward the European Union.

Russia already supplies Metsamor’s nuclear fuel and provides technical services. Awarding Rosatom the contract for a replacement plant could preserve that relationship for decades through fuel deliveries, maintenance, specialized equipment, personnel training and nuclear safety support.

“If Armenia agrees to build another Russian nuclear power plant, it will effectively become dependent on Rosatom — and therefore Russia — for nearly a century,” Nikitin warned.

He pointed out that the long-term relationship between a nuclear plant and its technology supplier extends well beyond construction, encompassing fuel supplies, spent-fuel management and the maintenance of specialized equipment.

Choosing a Western or Asian supplier could diversify Armenia’s nuclear partnerships, although alternative technologies would bring their own financing, licensing and construction challenges. Pashinyan has said Armenia expects to select its new reactor technology by the end of 2027, perhaps sooner.

With construction likely to take many years, the government faces a narrowing window in which to replace Metsamor before its planned retirement. For Nikitin, the choice goes to the heart of Armenia’s relationship with Russia.

“The decision to build a new nuclear power plant in Armenia will undoubtedly be driven more by politics than by energy considerations,” he said.

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Russia’s state nuclear corporation Rosatom has taken full control of one of the country’s largest logistics companies, consolidating an expanding transport empire that now stretches from Arctic icebreakers to Black Sea grain terminals.

The acquisition, announced October 7, gives Rosatom the remaining 51 percent of Delo Group, a major Russian container and freight operator, from its founder Sergei Shishkaryov. Rosatom already owned the other 49 percent.

The takeover is the latest step in Rosatom’s transformation from a nuclear energy corporation into a sprawling state conglomerate with an increasingly important role in Russia’s international trade.

Bellona expert Alexander Nikitin sees a broader political purpose behind the expansion.

“Putin trusts Rosatom,” Nikitin said. “That is why Putin is giving Rosatom access to resources the nuclear corporation could previously only have dreamed of.”

According to Nikitin, the corporation’s rapid growth has become particularly pronounced since Russia launched its full-scale invasion of Ukraine.

Building a transport empire

The purchase gives Rosatom complete control of Delo’s network of maritime terminals, rail infrastructure and container operations.

According to Reuters, the company operates a container fleet with capacity exceeding 220,000 twenty-foot equivalent units, or TEUs, and approximately 40,000 railway platforms. It also controls the KSK grain terminal at Novorossiysk, one of Russia’s largest grain export facilities, with annual handling capacity of up to 10 million tonnes.

Rosatom already controls another major shipping company, FESCO, which operates maritime and rail freight services linking Russia’s Far East with domestic and international markets.

According to Russian business newspaper Vedomosti, Rosatom chief Alexei Likhachev said the corporation’s combined logistics operations now account for approximately 50 percent of Russia’s container-handling market and 44 percent of its rail container transport.

The acquisition followed a prolonged disagreement between Rosatom and Shishkaryov over Delo’s future. Under a shareholder buyout mechanism initiated earlier this year, Rosatom acquired the founder’s stake for a reported 77 billion rubles, approximately $900 million. Interfax reported that Rosatom financed the purchase with borrowed funds.

Nikitin argues that the acquisition belongs to a much larger pattern of concentrating strategically important industries under Rosatom’s control.

The corporation’s influence, he said, now extends across “nuclear and conventional weapons, advanced technologies across the civilian nuclear design and construction industry, mineral resources in the Arctic, including rare earths and precious metals,” as well as logistics infrastructure.

“Rosatom is becoming the managing corporation for Russia’s major port facilities,” Nikitin said, citing Vladivostok, Kaliningrad, Novorossiysk, St. Petersburg and Nakhodka.

The Arctic connection

For Rosatom, the acquisition is about more than moving containers. Since 2018, the corporation has been responsible for developing the Northern Sea Route, while its nuclear icebreaker fleet provides the infrastructure necessary to keep Arctic shipping lanes navigable.

Moscow has repeatedly promoted the route as a strategic commercial corridor connecting Russian Arctic resources and Asian markets.

But expanding Arctic shipping requires considerably more than icebreakers. It also depends on cargo terminals, railway connections, container services and reliable transport networks linking the Arctic to the rest of Russia.

By combining Delo with FESCO and its existing transport operations, Rosatom is seeking to bring more of that infrastructure under unified management.

In remarks published by Vedomosti, Likhachev described the corporation’s goals as strengthening Russia’s transport sovereignty, maintaining international freight connections and developing both the Northern Sea Route and the broader Trans-Arctic transport corridor.

The corporation also argues that consolidating its logistics businesses will eliminate overlapping investments and could save as much as 100 billion rubles over the next decade.

Whether those savings materialize remains uncertain.

The acquisition does not mean that all these operations will directly serve the Northern Sea Route. Many of Delo’s most important assets lie far from the Arctic. But the consolidation gives Rosatom a much larger role in determining how Russian freight moves between ports, railways and international markets.

More than a commercial transaction

The acquisition also illustrates how closely Russia’s largest state corporations are becoming intertwined with the country’s broader strategic priorities.

As Reuters reported, Shishkaryov said he intends to devote a substantial portion of the proceeds from the sale to Russia’s national security needs, although he provided no details about how the money would be used.

For Nikitin, however, Rosatom’s growing power is about more than overcoming commercial obstacles.

“Rosatom is becoming an institution the Kremlin can rely on when necessary,” he said.

Concentrating so many resources under its roof, Nikitin argues, is making Rosatom increasingly important to the country’s political leadership.

“Today, it is impossible to name another Russian company that has expanded so dramatically or accumulated so many resources as Rosatom,” he said. “In every sense, it has become the most trusted asset of Russia’s current leadership.”

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