Moscow is to lend Budapest up to 10 billion euros in a nuclear cooperation agreement finalised during a visit to Russia by Hungarian Prime Minister Viktor Orban.
The leader of the former Soviet bloc state had warm praise for his host, Vladimir Putin.
The 30-year loan will fund the expansion of Hungary’s only nuclear power plant where two new blocks will be built.
“Russia is our most important partner after the countries of the EU,” Orban told reporters as he sat with Putin in the Russian President’s residence outside Moscow.
“We appreciate that development… what we can see in Russia after your leadership. That makes the cooperation important for Hungary.”
A European Union member for a decade, Hungary remains heavily reliant on Russia for its energy provision.
The new blocks at the Paks nuclear power plant, south of Budapest, are expected to come on line before 2023.
They will remain in Hungarian state ownership.