Hungary will not proceed with the construction of the hydropower dam at Nagymaros, the border town with Slovakia, Energy Minister Csaba Lantos told news site Index in a background briefing, confirming reports that the long-standing Gabcikovo-Nagymaros hydroelectric power plant (HPP) System dispute between the countries could soon come to an end.

Under the draft deal, Hungary would formally give up plans to build the dam, and in return accept Slovakia’s 1992 diversion of the Danube and the continued operation of the Gabčíkovo hydropower plant (HPP) on the Slovakian side of the border. Budapest hopes the volume of water directed back toward Hungary could increase by as much as 10% compared with the current level and that it.

"Our focus has been on securing more water than we are receiving today," Lantos stressed, noting the ecological importance of the measure.

"We will not have to contribute to the refurbishment of the power plant, since we will not be co-owners," the minister added.

Lantos gave the background press briefing after government officials met with 31 mayors in the region. 

Deputy energy minister Gabor Czepek, the government commissioner in charge of Hungarian-Slovak energy infrastructure, said that the two sides had agreed to "let go of the past" and would not base further negotiations on past grievances.

Czepek said Hungary had already invested some HUF500bn (€1.2bn at 2013 prices) into related infrastructure, while remaining dependent on Slovakia in all water management matters.

As part of the package, Hungary would also get access to green electricity generated by Slovakia at a favourable price. The volume under discussion would be sufficient to cover the annual electricity consumption of 775,000 people in the region.

The controversy surrounding the construction of the HPP dates back to 1989, when Hungary, under growing public pressure and amid a rising environmental movement, scrapped its participation in the joint dam project with what was then Czechoslovakia. 

The decision to abandon the Soviet-era plan was based on ecological concerns, including fears of damage to the Danube’s unique floodplain ecosystems and threats to groundwater supplies in parts of Hungary. The last reform-Communist government of Miklos Nemeth succumbed to public pressure after mass protests in May 1988, the largest gatherings on the streets of Budapest since the October 1956 revolution.

In response, Slovakia, by then an independent state, took unilateral action in 1992 by diverting 83% of the Danube’s water flow into a newly constructed canal on its side of the border, allowing it to proceed with the HPP. 

Budapest declared the move unlawful and accused its neighbour of violating international treaties and environmental norms. In a 1997 ruling, the International Court of Justice found both parties at fault, Hungary for abandoning the project, and Slovakia for diverting the river. The ICJ then called on both sides to reach a joint solution.

According to Lantos, improved bilateral ties and closer integration of the two countries’ energy markets helped bring the agreement within reach. "We wouldn’t have come this far without a significant and positive shift in Hungarian-Slovak relations," he added.

Environmental groups, including the Danube Charter organisation, have previously rejected any solution involving the transfer of electricity from the power plant as compensation for the unlawful diversion of the river.

Opposition parties in Slovakia accused the Fico government sacrificing economic sovereignty and giving away national resources to Budapest. According to energy experts and MPs, the proposed deal would see Slovakia transferring 40-50% of the electricity generated at the dam to Hungary for production costs, allowing Hungarian actors to pocket the profit.

Despite ideological differences, Robert Fico’s left-populist Smer party has sought closer ties with Viktor Orban and his nationalist Fidesz government, aligning on issues such as migration, EU scepticism, and opposition to military support for Ukraine.