Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

By bne IntelliNews May 18, 2017

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear engineering firm Kralovopolska RIA, they announced on May 18

Opimus Group and Konzum said in a filing on the Budapest Stock Exchange they have also agreed to enter into a strategic agreement with the aim of expanding in the region in projects concerning nuclear development and wastewater treatment. In the Czech Republic, Kralovopolska RIA was involved in building the Temelin plant.

The announcement comes just days after Russian state nuclear agency Rosatom said that it will soon announce the first tenders for the €12bn project to expand Hungary's Paks nuclear power plant. Tenders are set to launch imminently, and will be open to companies throughout the EU.

Lorinc Meszaros is mayor of Felcsut, which is the home town of Prime Minister Viktor Orban. Commonly claimed to be the PM's proxy, Meszaros is now using the empire he has built so rapidly in banking, tourism, agriculture, and industry in recent years to expand into a new and highly specialised segment, it appears.

Atomstroyexport, the Rosatom subsidiary that will select the subcontractors for the Paks expansion, has said that many companies from the Czech Republic have already qualified as suppliers. That explains the motive behind the acquisition by Konzum and Opimus, Portfolio.hu claims. Meanwhile, the Russian company is keenly pushing to take part in the Czech Republic's delayed strategy to add up to four new units at its nuclear facilities in the coming decades.

Opimus is buying a 40% stake in KPRIA Magyarorszag, with Opimus to hold a further 11%. Kralovopolska RIA will retain 44%, while the rest of the company is held by a Slovakian businessman, according to reports in the Hungarian media.

Over the next 12 months, the volume of contracts on Paks could be worth up to €900mn, and then rise as high as €3bn at the peak of the investment in 2021-2022.  Hungary hopes to have at least 40% of the work done by local suppliers.

The inter-governmental deal reached with Russia in January 2014 will see Rosatom add two new units to Hungary's only nuclear power plant, which currently accounts for half of the county’s electricity output. Moscow will lend Budapest €10bn towards the project cost. Hungary says it plans to take out a loan at better conditions and use that to refinance the Russian loan.

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