US Lifts Russia Sanctions Enabling Hungary Paks II Nuclear Expansion

The Trump administration has lifted sanctions previously imposed under President Biden that hindered the expansion of Hungary's Paks nuclear power plant, a project largely financed and constructed by Russia's state-owned Rosatom. Hungarian Foreign Minister Peter Szijjarto expressed gratitude for the removal of these politically motivated sanctions, stating that the previous restrictions made it nearly impossible to continue the $12 billion project, which is critical to Hungary's energy security. The U.S. Treasury and State Department granted exemptions to Rosatom to allow the continuation of the project despite ongoing Western sanctions on Russia amid the war in Ukraine, prioritizing keeping Hungary within NATO and preventing its increased reliance on Russia and China. The Paks II project involves adding two new reactors expected to provide most of Hungary's electricity by the mid-2030s, with construction momentum expected to resume following the lifting of financial transaction restrictions on Russia's Gazprombank. The decision involved extensive lobbying from Hungary and concerns from the nuclear sector about supply disruptions, illustrating policy divergences within the EU and the U.S. regarding sanctions enforcement. Overall, the exemption reflects a strategic compromise balancing geopolitical concerns and Hungary's energy sovereignty.