Budapest: Hungary said Monday that the EU`s nuclear body Euratom has signed a fuel supply agreement, clearing the way for Russia to build the extension of the country`s sole nuclear plant.
Under the deal -- agreed with Euratom at the end of March -- Russia will be able to supply fuel for two new reactors at the Paks plant in central Hungary over a 10-year period.
Euratom had initially expressed concerns over plans for Russia to be the only fuel supplier, threatening to unravel the planned 12.5 billion euro ($13.4 billion) project.
A European source confirmed Monday`s go-ahead of the deal to AFP.
Janos Lazar, the chief of staff for Prime Minister Viktor Orban, called the agreement a "milestone".
However, negotiations with the European Commission, the EU`s executive arm, are expected to last several more months to address concerns over competition and procurement, Lazar said.
Hungary signed an agreement with Russia`s Rosatom last year to expand Paks with two power blocks of 1,200 megawatts financed with a 10-billion-euro ($11-billion) loan from Moscow.
Under the original deal, Russia would have supplied fuel for the new reactors for 20 years.
The pact was seen as a sign of increasingly close ties between Orban and the Kremlin, and has sparked concerns in the EU at a time when the bloc`s relations with Russia are strained over the Ukraine conflict.
"This (deal) is about the security of Europe`s energy supply, about Hungary`s energy independence, about becoming less reliant on gas, and not about becoming more dependent on Russia," Lazar said.
Construction of the reactors is scheduled to begin in 2018.