Rosatom is one of the biggest nuclear energy companies in the world. It has building projects in many different international countries, but it is also owned by the Russian Federation. The same Russia that is responsible for the illegal invasion in Ukraine, and the overall political instability and fear in Europe.
In this post, we will explore what Rosatom is, and what ongoing projects they have with Hungary and Turkey. We find out if those deals can influence these two NATO outliers to make choices that are friendly to the Kremlin, but hurt the West.
WHAT IS ROSATOM?
Rosatom, or in full Rosatom State Nuclear Energy Corporation, is one of the largest companies in the nuclear energy industry in the world. It is a Russian state corporation with headquarters in Moscow. They specialize in high-tech products, nuclear energy, and nuclear non-energy goods.
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| The Rosatom flag with the Russian Federation flag (Picture: Unknown) |
It was established in 2007. It is an umbrella corporation for more than 350 enterprises that include scientific research organizations, a nuclear weapons complex, and the world's only nuclear icebreaker fleet. As a state corporation, Rosatom is wholly owned by the Russian Federation.
Rostom is the biggest energy provider in Russia. They produce 20.28% of the whole country's energy. It is also responsible for the most amount of nuclear power plants (NPP) constructions in the world. They had about 35 nuclear power plant units (at different stages of construction) in 12 countries, as of 2020. This leads us to today's topic, the NPP projects being built in Turkey and Hungary.
WHAT ARE THE PROJECTS IN HUNGARY AND TURKEY?
In 2010, Turkey signed an agreement with Rosatom for a US$22 billion deal that a subsidiary of Rosatom would build, own and operate the Akkuyu Nuclear Power Plant. This is in Büyükeceli, Mersin Province. This NPP is expected to generate around 10% of Turkey's energy supply once finished.
Construction on the first reactor started in 2018. The site preparation contract was signed in 2013 by the Turkish construction firm, Özdoğu, and it was signed in conjuction with Russian nuclear construction firm, Atomstroyexport (ASE). The first unit is expected to be finished this year. This will be the first nuclear power plant in the world that will have the build/own/operate model.
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| Akkuyu Nuclear Power Plant (Photo: Unknown) |
On 26th August 2022, Hungary approved a permit that allows the construction of two nuclear reactors by Rosatom.
Hungary has
issued a permit that would allow the construction of two new nuclear reactors by the Russian state-owned company Rosatom. This would take the NPP, located in the southern city of Paks, to go from four reactors to six. This project is estimated to cost around US$12.4 billion and will more than double the plant's capacity.
Funds for construction will be broken down into Russia footing around US$10 billion and Hungary will pay the balance at US$2.4 billion.
The Paks NPP was built in 1980s, at the time of the Soviet Union. It generates half the country's energy needs and gets the nuclear fuel from Russia.
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| Paks II Nuclear Power Plant (Photo: Unknown) |
The estimation is that the project is finished by 2030 and the new reactors will protect Hungary from a "wild swing in energy prices." according to Hungarian Foreign Minister, Peter Szijjarto.
What is interesting to note is that Finland also had such a deal with Rosatom. Finnish energy company, Fennovoima,
scrapped the deal in May 2022 after the war in Ukraine broke out. The plant Hanhikivi 1, in Pyhäjoki, Northern Ostrobothnia, would have been the first entirely new plant built in Finland since the 1970s and the third NPP in the country. Rosatom would have own 34% of the plant, and would have supplied 10% of Finland's energy demand.
Some reasons why the project was scrapped was due to money, the construction permissions taking a long time to arrive, and the war in Ukraine made it an unpalatable deal for Finns to work with Rosatom. Especially since they took over the
Zaporizhzhia Nuclear Power Plant in Ukraine.
WHAT IS THE BENEFIT FOR HUNGARY?
For Hungary, it is easy to see why they would go ahead with these deals. Hungary has been an outlier as an EU member and also as a NATO member.
The Orbán government has quite loudly and proudly announced that Hungary enjoys low energy prices and does not suffer from the energy crisis like the rest of Europe. This is due to maintaining close ties to the Kremlin, even when Putin illegally invaded Ukraine. In fact, the war made Hungary double down on the relationship they have with the terrorist state.
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| Viktor Orbán, Prime Minister of Hungary (Picture: Unknown) |
The European Union is currently preparing its 10th sanctions package against Russia. This should be ready for 24th February 2023, which would mark the one-year anniversary of the war. Ukraine has called for Rosatom to be part of the sanctions. Hungary said they would veto such sanctions on Russian nuclear energy, if proposed. They have criticized EU's sanctions against Putin for a long time, citing that EU is trying to "ruin Europe's economy".
NOT ALL SMOOTH SAILING FOR TURKEY
The NPP construction project at Akkuyu, in the south of Turkey, has been fraught with problems. In the summer of 2022, Rosatom subsidiary Akkuyu Nükleer signed a deal with a new construction firm, TSM Enerji, to finish building the plant. They terminated the deal with Turkish firm, IC Içtaş.
IC Içtaş was livid about this termination and has started legal proceedings to challenge it. They said that Rosatom is trying to "reduce Turkish corporate presence" at the NPP.
TSM Enerji, based in Mersin, is owned by three Russia-based companies, according to the Turkish trade registry.
The Turkish Energy and Natural Resources Ministry is seeking to resolve the issue. “Our ministry has taken the necessary initiatives to resolve the dispute between the parties,” they said in a statement. Their main concern is to resolve the conflict quickly so that the project is not delayed.
After this change in partners, Rosatom holds 99.2% stake in this project and it is the biggest investment in Turkish history being done at a single site.
Turkey's president, Tayyip Erdogan, has suggested in the past that Turkey and Russia could partner up to build a further two NPPs on Turkish soil.
CAN THESE DEALS INFLUENCE POLITICS IN HUNGARY AND TURKEY?
While this is a sensitive question in the current political climate, I would say that it does nuance the decisions Ankara and Budapest makes. We can see from past actions that Hungary has done everything possible to veto, block or criticize decisions made by both NATO and the EU, of which they are members of. Turkey has also joined in on that fight.
Turkey has helped to mediate the grain deal between Russia and Ukraine. Erdogan has made it possible for allowing Ukraine's grain to be exported to starving African countries, despite Russia's blockade on the Black Sea.
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| Recep Tayyip Erdoğan, President of Turkey (Photo: Wikipedia) |
The biggest problem for NATO, and by and large European security, is that both countries refuse to ratify Sweden and Finland's ascension to the Alliance.
Hungary said that they would handle the matter in the first parliamentary sessions of February 2023. Sweden has
placed urgent demands on Hungary to begin the ratification process as soon as possible, amid fears that they could use the NATO request for ransom against frozen EU fund.
Turkey, on the other hand, is being very hard nosed on the issue since the Quran burning matter outside of the Turkish embassy in Stockholm, in January 2023. The act was carried out by Rasmus Paludan, the leader of Danish far-right political party, Hard Line. It was not the first time he had done this.
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| Pauldin burning the holy book in Stockholm (Picture: Fredrik Sandberg / Reuters) |
This was the latest of many problems that Sweden faced since submitting the NATO application. Turkey had said from the beginning that they have a long list of demands that both Sweden and Finland must fulfil in order to get a "yes" from them to be part of the Alliance.
One could very easily speculate that some hidden reasons that the ratification process has not gone through is because of Russia. President Vladimir Putin is demanding that they don't allow Sweden and Finland to become part of NATO under any circumstances.
This would be because, from a security perspective, it would bring the Alliance to Russia's border. It would close off the Baltic Sea to Russia and it would put St. Petersburg in danger, according to claims from the Kremlin.
It would be in Putin's interest to say to Turkey and Hungary if these countries will their memberships, then Russia will scrap your nuclear plants.
One thing to mention, also, is that civil power nuclear plants can produce plutonium for military uses. This is probably another reason why the owned, built and operated model for the Akkauyu NPP makes the West nervous. The instability of Turkey's government, paired up with their untrustworthy nature, is a cause for concern for many NATO members.
EVERYTHING TO LOSE
Hungary's Viktor Orbán has been named by some as a dictator, and we all know that Hungary is quite a conservative nation that has very close ties with Vladimir Putin. One can even speculate that this is why Orbán is still in power.
Hungary is on thin line, there is
growing inflation, political instability and deterioration of trade. If the deal with the nuclear plant does not continue, Hungary could also face high energy prices and that would drive the prices of goods and inflation up even more. It can create the situation that people want a new government and this is not what Orbán would like. He has enjoyed being in power since 2010.
On the other hand, Turkey is in a very sensitive spot this year. There will be a president election on May 14th of this year. They have just been hit by
two devastating earthquakes on 7th February, with death tolls is over 23,000 people. WHO have estimated that the disaster has affected around 23 million people, with Turkey and neighboring Syria, that has also been affected, combined.
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| Looking for survivors under the rubble of collapsed buildings in Kahramanmaras (Photo: Adem Altan, Getty Images) |
Over 6,000 buildings have collapsed in Turkey. President Erdogan has started enquires into finding out why so many constructions failed to withstand the tremors of the earthquakes. The way that he will handle this disaster could spell the future for him. If handled poorly, then people could easily turn against and vote in a new leader. There high inflation in Turkey is not doing Erdogan any favours, right now it is 51.17%. In 2022, it was 73.13%.
I would say that if the deal with Rosatom collapses, it will mean that Turkey will struggle provide affordable energy to its ever-growing population in the near future.
LAST THOUGHTS
My last thoughts are that it makes perfect sense that these projects can be used by the Kremlin as a geopolitical coercion tool to make countries such as Hungary and Turkey to do what they want.
At the moment, Russia does not have the capability to fight a conventional war with anyone, since they were decimated in Ukraine considerably. The only other ways that they have to their disposal are things such as coercive tactics, cyberwarfare, political pressure and blackmail. The tools that they are very familiar with.
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