Russia’s state-owned Rosatom will expand Hungary’s sole nuclear power plant in an investment to be financed with a credit line from Russia, it was revealed after the countries signed an agreement on the peaceful use of atomic energy. The agreement between Hungary and the Russian Federation was signed at the residence of Russian President Vladimir Putin in Novo-Ogaryovo, near Moscow. It was signed by National Development Minister Zsuzsa Nemeth and Rosatom chairman Sergey Kiriyenko in the presence of Mr Putin and Hungarian Prime Minister Viktor Orban. Mr Putin said after the signing that the sides had agreed on the construction of nuclear power plant blocks, adding that the Paks nuclear plant in Hungary generates 40pc of the country’s electricity. He said the construction of new blocks would boost Hungary’s energy independence. Mr Putin said the new reactors would double the Paks plant’s capacity, which is 2 GW at present. He said the agreement was extraordinary in that 40pc of the project content would be supplied by Hungarians. Mr Orban said the sides had signed an excellent professional agreement. Mr Kiriyenko said Russia would provide Hungary with credit to build two new blocks at the Paks plant. He said a decision on the size of the credit had not yet been taken, but added that the maximum amount of the line would be EUR 10bn, although the amount disbursed would be less. Mr Kiriyenko said the exact cost of the project could be established based on the work of technical experts, but added that this work had only just begun. The preliminary contract is based on the construction of the reactors, the delivery of the nuclear fuel and maintenance services, he added. At a press conference in Budapest, state secretary of the Prime Minister’s Office Janos Lazar said Rosatom would build two new blocks at the Paks plant in a EUR 10bn-12bn investment. The investment will take place without a tender, he said. Russia will provide a 30-year inter-government loan for the project, Mr Lazar said. The first new block could start operating in 2023, he added. Mr Lazar said the expanded plant would remain owned by the Hungarian state. He said the government had sent plans for the new blocks to Brussels, which had not vetoed the project. He noted that the investment could raise annual GDP by one percent and create 10,000 jobs. The Russian credit will cover 80pc of the cost of the expansion, while Hungarian co-financing will cover the rest, he said. Mr Orban said Hungary would fulfill all contractual commitments related to the construction of the South Stream gas pipeline. The South Stream pipeline will deliver Russian gas to Europe via the Black Sea. It will bypass Ukraine, whose disputes with Moscow have interrupted gas deliveries to Europe several times in recent years.