Hungary’s political shift could force Serbia to rethink how it gains access to Paks 2 power

Hungary’s political transition is beginning to reshape the outlook for Paks 2, a nuclear expansion project that has been politically and financially intertwined with Russia—and that has also drawn interest from Serbia. The implications extend beyond bilateral energy talks: they touch on how future deals are negotiated, how transparent financing is expected to be, and how EU energy governance may determine what kinds of cross-border participation are feasible.

Budapest signals a review of Paks 2’s structure

The new Hungarian political leadership has indicated it intends to review the financing structure, implementation conditions and overall economics of the €12.5 billion Paks 2 project. For years, Paks 2 has stood out as one of the closest strategic partnerships between Budapest and Moscow inside the EU. It was awarded without international tender to Rosatom in 2014 and has been financed largely through a Russian state loan structure.

Why Serbia cares: winter supply gaps and decarbonization pressure

Serbia has repeatedly said it wants access to future nuclear electricity from Paks 2. Serbian officials have previously discussed potential ownership participation, long-term supply arrangements or other strategic cooperation mechanisms tied to output from the plant.

The logic behind that interest is straightforward. Serbia faces structural electricity deficits during winter demand peaks, while European climate obligations increasingly constrain the long-term viability of coal generation.

From Orbán-era alignment to a more Brussels-oriented approach

Under former Prime Minister Viktor Orbán, Paks 2 carried geopolitical weight beyond energy investment. The project reflected Hungary’s willingness to maintain deep strategic and financial ties with Russia despite broader tensions between Moscow and Brussels.

Now, however, Hungary’s political environment appears poised to change quickly. The incoming leadership has emphasized the need for a “transparent nuclear strategy” and signaled willingness to reassess costs, financing terms and implementation conditions. That could complicate any future Serbian participation by shifting negotiations into a potentially different political and regulatory framework.

Construction continues—but scrutiny could rise

The changes do not necessarily mean Paks 2 will be abandoned. Construction has already moved into active phases after the first concrete pour earlier in 2026. Still, analysts warn that tighter scrutiny around commercial terms and ownership structures could become more likely if Hungary moves toward stricter procurement transparency and reduced geopolitical dependence on Russian-linked infrastructure.

Potential scenarios for Belgrade

For Serbia, several outcomes are possible. A favorable scenario would preserve access to future nuclear-generated electricity through long-term offtake agreements rather than direct equity participation. Such an approach could help Serbia improve baseload stability while avoiding deeper political entanglement in ownership debates tied to a Russian-financed project inside the EU.

Direct ownership participation looks more complex. Earlier regional analyses suggested Serbia might face difficult trade-offs—either requiring substantial financial commitments or potentially involving strategic concessions related to Serbian energy assets. In a climate increasingly focused on transparency and EU regulatory compatibility, those discussions could become even more sensitive.

Nuclear fits Serbia’s longer-term planning—if deal conditions allow it

The broader context is Europe’s evolving power market integration and decarbonization requirements as Serbia moves gradually closer toward EU electricity market coupling. Nuclear power becomes strategically more attractive as hydropower expansion remains limited by environmental and permitting constraints, coal faces rising carbon exposure under mechanisms such as the Carbon Border Adjustment Mechanism and ETS-related pressures, and wind and solar capacity expand faster than system balancing solutions—especially for winter baseload stability.

In theory, access to nuclear-generated electricity from Paks 2 could provide Serbia with long-duration low-carbon baseload supply during the 2030s, improving security of supply while potentially reducing future carbon exposure from fossil-based generation.

EU-aligned negotiations may replace politically driven understandings

The incoming Hungarian leadership also appears focused on rebuilding confidence with Brussels by strengthening institutional transparency and reducing perceptions of politically opaque strategic deals. If that translates into practice, negotiations involving external partners such as Serbia could become more commercially structured, more tightly regulated, and more closely aligned with EU state-aid and competition frameworks.

At the same time, uncertainty around Paks 2 economics remains part of the picture inside Hungary itself. Cost escalation, delays and financing exposure have become politically sensitive issues, with critics questioning whether costs remain justified under current market conditions. If redesigns or renegotiations follow—or if refinancing becomes necessary—Serbia’s role could end up subordinated to domestic Hungarian priorities.

Serbia is also preparing its own nuclear decisions

The timing matters because Serbia is entering a more serious phase of debate around nuclear energy. Serbian Energy Minister Dubravka Đedović Handanović recently confirmed that feasibility studies and preparatory analyses aligned with recommendations from the International Atomic Energy Agency are underway, with strategic decisions expected in coming years.

A shift in cooperation terms is likely

Overall, Hungary’s political changes do not automatically close the door for cooperation around Paks 2—but they are likely to change its form. As politically driven understandings give way to frameworks shaped by EU energy governance, financial transparency requirements and commercial market logic, practical cooperation may increasingly center on long-term electricity purchase agreements, transmission coordination and regional balancing mechanisms rather than direct ownership stakes in the plant itself.

The underlying regional trend remains clear: across Central and South-East Europe, nuclear energy is returning to long-term industrial planning. The question now is less whether countries will seek nuclear-linked electricity access—and more what political, financial and regulatory conditions will govern those partnerships as projects like Paks 2 move deeper into construction.