Washington has issued a general license allowing Russia’s Gazprombank to resume transactions related to Hungary’s Paks-2 power plant project
The US has lifted sanctions that barred financial transactions via Russia’s Gazprombank related to Hungary’s Paks-2 nuclear power plant. A general license issued by the US Office of Foreign Assets Control (OFAC) on Friday grants Gazprombank and a host of other Russian banks permission to conduct transactions “related to civil nuclear energy.”
Paks-2, launched in 2014 under a bilateral agreement, involves two reactors constructed by Russia’s Rosatom and includes a €10 billion ($11.7 billion) Russian loan to cover most of the estimated €12.5 billion cost. The project, deemed critical to Hungary’s energy security, was scheduled to start last year near the existing Paks NPP, the country’s only nuclear power station, which supplies about half of the nation’s electricity. However, US sanctions on Gazprombank – through which the project was financed – forced construction to pause. Budapest repeatedly appealed to Washington for a waiver.
Hungarian Foreign Minister Peter Szijjarto confirmed on Sunday that the US has now lifted the restrictions.
“The US made numerous decisions on political grounds that placed our country in an extremely difficult situation,” Szijjarto said in a statement. “One of these decisions sought to undermine Hungary’s energy supply by imposing restrictions on the construction of the Paks-2 NPP, making it virtually impossible for construction to continue.”
He added that “fortunately, since January, there has been a president in Washington who views Hungary as a friend.”
“In light of this, the US government has lifted sanctions related to the Paks nuclear power plant investment,” Szijjarto stated. He stressed that Paks-2 “guarantees Hungary’s secure energy supply,” and will allow the country to cover most of its electricity needs by the mid-2030s.
Hungary has opposed Western sanctions on Russian energy since the Ukraine conflict escalated in 2022, arguing the imports are essential for national security. It maintains a long-term gas deal with Gazprom. Hungary gets the bulk of its oil and gas from Russia under exemptions it secured from EU restrictions. Budapest recently blocked a European Commission proposal to phase out Russian gas imports by 2027, warning the move would “destroy Hungary’s energy security” and raise costs sharply.
The OFAC license also lifts restrictions on civil nuclear-related transactions from the Russian central bank and the country’s largest lender Sber Bank, along with Vnesheconombank, Alfa-Bank, VTB, Otkritie, Rosbank, and several others. The move follows a thaw in relations between Russia and the US amid diplomatic efforts toward a peaceful resolution of the Ukraine conflict.
