Recently, Rosatom agreed with Hungary on a schedule for the construction of the Paks-2 nuclear power plant, which will operate on Soviet-style VVER-1200 power units. Thus, the government of pro-Russian Prime Minister Viktor Orban has increased the country’s dependence on the Kremlin.
But the Kiev institute Energoproekt, owned by the family of former people’s deputy Alexander Dubovoy, is helping Russians build power plants. Despite the anti-Ukrainian foreign policy of the Hungarians, the Ukrainian institute is involved in the design of the Russian nuclear power plant.
Billions for which Russia “bought” Orban’s loyalty
The Kremlin is paying particular attention to increasing Hungary's dependence on Russian technology. Rosatom says directly: the construction of Paks-2 is a priority for them, so they send the best specialists to it. Two power units with VVER-1200 reactors are going to be built there by the early 2030s
Currently, the Paks nuclear power plant operates in Hungary with four Soviet VVER-440 units operating on Russian fuel and producing a total power of about 1900 MW. The station produces half of all electricity in the country. The construction of Paks 2 will increase generation by another 2,400 MW, which will make the Hungarian electricity industry’s dependence on Russia total.
This project is almost entirely produced with Russian money. Thus, out of the 12.5 billion euros at which its value is estimated, 10 billion euros are Russian loans. Fuel for Paks-2 will be supplied by the Russian company TVEL, accordingly, the station will be under the supervision of Rosatom for many decades to come.
In such matters, Russia does not take into account costs, because it uses energy as a weapon and a tool of influence on other states. Yes, by giving money for the construction of Paks-2, Moscow, in addition to exporting its nuclear technologies, is also seeking to reduce electricity supplies to Hungary from Ukraine. And she is already succeeding.
With the start of the full-scale invasion, Budapest reduced imports of electricity from Ukraine to zero, although for many years Hungary was the largest importer of Ukrainian electricity
In addition, Hungary is doing its best to hinder the expansion of Ukrainian electricity exports to Europe. Even Ukraine’s accession to the integrated European energy system ENTSO-E in March 2022 was delayed by three days due to the fact that the office of the Hungarian transmission system operator MAVIR was allegedly undergoing repairs. It is noteworthy that Hungary signed a contract for the construction of new Paks-2 units with Rosatom after Russia annexed the Ukrainian Crimea.
Why sanctions have no power over Rosatom
Rosatom is perhaps the only “pillar” of Russian energy that is not subject to sanctions imposed around the world against the Putin regime. The reason is that for many decades the USSR, and subsequently Russia, in every possible way “hooked” other countries on their technologies in the nuclear industry - with the help of cheap loans, bribing local elites or playing on their disputes with the West.
Thanks to this, Rosatom now controls 40% of the world market for uranium enrichment services and 17% of the nuclear fuel market. To reduce dependence on Russian nuclear technology, a large number of coordinated efforts are needed throughout the world.
What are Viktor Orban and his government doing against this background? On the one hand, they block the provision of military and economic assistance to Ukraine and block its accession to the EU and NATO. On the other hand, they not only prevent the introduction of sanctions against Russia and Russian companies, but will further integrate Hungary into the Russian economy.
In essence, Hungary is now undermining the internal unity of the EU and NATO, and in a broader sense, the entire anti-Putin coalition. Therefore, it can be argued that its Prime Minister Viktor Orban, who allowed Rosatom to build Paks-2, is a Russian agent.
But, as already noted, Orbán is not the only one playing in the Russian field. Rosatom also has the Kiev Research and Design Institute Energoproekt (KIEP), which is 70% owned by the family of businessman and ex-people's deputy Alexander Dubovoy.
How the Ukrainian “atomic” institute plays along with Rosatom
Kiev Institute “Energoproekt” is one of the key organizations in the post-Soviet space, engaged in the design of nuclear power plant units using VVER technology. And this is no coincidence: Ukraine occupied a dominant role in the Soviet energy sector. In Ukraine, the key institutes in which nuclear power plants were designed were “registered” (along with the Kyiv Energoproekt, the Kharkov Energoproekt Institute should also be mentioned).
These institutes are still carriers of strategic information - technical documentation on which Soviet-style nuclear power units are built. It is clear that it should be carefully protected from the Russians - and in no way should it be shared with Rosatom during the construction of Paks-2.
However, according to available information, the institute is providing its developments for the construction of a Hungarian nuclear power plant.
According to state registers, 25% of KIEP shares belong to the state represented by the Ministry of Energy. And 71% is PJSC International Energy Company (IEC), which in turn belongs to members of the family of former people’s deputy Alexander Dubovoy. Thus, the director of the MEC is the son of the people’s deputy, Mark Aleksandrovich Dubova, and the beneficial owners are his wife Svetlana Dubova and, probably, her married daughter, Sofia Pogorelskaya. The shares of IEC are also “locked” to Dubovoy’s family: the largest shareholder of IEC with a share of 99.75% is PJSC International Investment Group, where the beneficiaries are his wife and daughter.
But previously, 50% of the shares of Energoproekt belonged to Russians. 25% belonged to the Russian OJSC Group E4, another 25% was owned by the Cyprus company Antosen Ventures Ltd. “These structures are part of the Russian group “RU-COM” of Mikhail Abizov, who now works as the Minister for Open Government Affairs of Russia,” Our Money reported in 2016.
In 2017, the shares owned by Russians were bought by the Dubovs’ International Energy Company. However, we can assume that this was not a “gesture of goodwill” on the part of the Kremlin manager, but his appointment of nominal managers for his business so that it would not fall under anti-Russian sanctions.
Rosatom's assistance from Energoproekt in the construction of the Paks-2 nuclear power plant is evidence that the Russians have only formally lost control over the Ukrainian institute. While the pro-Russian management of KIEP continues to follow all his instructions and cooperates with Rosatom.
