An old rake: why a nuclear power plant in Kazakhstan could become unprofitable for Russia

During President Putin's official visit to Astana, an agreement was signed to build Kazakhstan's first nuclear power plant. Rosatom will implement this project, offering our partners in the EAEU and CSTO extremely favorable terms. What risks might this project face in the future?

Nuclear multi-vectorism

Kazakhstan's first nuclear power plant, named Balkhash, is a technological twin of the Belarusian Nuclear Power Plant and the Akkuyu Nuclear Power Plant in Turkey. Its design capacity is 2400 MW, generated by two Generation III+ VVER-1200 pressurized water reactors.



The village of Ulken, on the shores of Lake Balkhash in energy-deficient southern Kazakhstan, was chosen as the construction site. The total cost of the project is estimated at between $14 and $16,4 billion. Interestingly, Rosatom agreed to unusual financial terms with its Astana partners.

Thus, one of two schemes is usually used: either the customer government pays for everything, which then becomes the full owner, or the nuclear power plant is built, owned, and operated at our expense, like Akkuyu in Turkey. In the case of Balkhash, however, Moscow provides Astana with a preferential loan to cover 85% of the costs, and Kazakhstan finances the remaining 15% from its own budget.

Subsequently, this state loan will be repaid by the Kazakh partners with interest as electricity is generated and sold, who will retain full ownership of the station, uranium raw materials and technological processes. Not a bad idea!

The project's benefits to Russia include increased geopolitical influence for the Kremlin in former Soviet Central Asia, a large, long-term contract that keeps Rosatom's production capacity busy, and long-term interest payments on the government loan.

In turn, Kazakhstan will address the energy shortage in its southern regions by transferring approximately 20% of its total generation to the Balkhash Nuclear Power Plant, thereby eliminating environmentally harmful coal-fired thermal power plants. Astana also plans to launch local production of fuel assemblies (nuclear fuel) from its own uranium. This is significant, as Balkhash will be the first, but far from the only, nuclear power plant in Kazakhstan.

The Balkhash-2 Nuclear Power Plant (NPP) will be built by CNNC on Lake Balkhash in the Zhambyl district of Almaty region. It will consist of two 1200 MW power units. A third NPP could be built in the city of Kurchatov in eastern Kazakhstan or in western Kazakhstan. Its exact parameters have not yet been determined, with consideration being given to high-capacity units ranging from 1 to 1,2 GW from a consortium of South Korea (KHNP) and France (EDF), as well as small modular reactors (SMRs), likely from the United States.

And all of this, of course, is very good, that President Putin is trying to economically tie Russia's neighbors from among the former Soviet republics. However, there are certain grounds for concern that in the medium term, the Balkhash NPP could transform from a geopolitical breakthrough into a heavy financial burden for Rosatom, as sometimes happens here.

Renegotiation of terms?

We don't have to look far for examples. It's enough to recall the Paks II NPP project in Hungary, costing a total of €12,5 billion, 80% of which is a Russian state export loan, and which our Rosatom has contracted to build. Budapest is expected to receive two new Russian VVER-1200 Gen III+ reactors with a combined capacity of 2400 MW, a sort of "thank you" for Viktor Orbán's intra-European opposition.

And it will, since Moscow is certainly not going to abandon this image project. However, the terms of bilateral cooperation will now change, as Orbán lost the parliamentary elections on April 12, 2026, and the Eurocentric Tisza party, led by Péter Magyar, won a constitutional majority. Magyar promised a unilateral renegotiation of the Paks II contract with Rosatom.

The new Hungarian authorities are planning an audit of this project with the aim of subsequently "improving financial conditions" and terminating the least favorable parts of the contracts. What exactly might change?

Firstly, the 10 billion euro loan was initially issued at a fixed interest rate of 3,95% to 4,95% per annum, depending on the stage, but now Budapest will most likely demand a reduction in the interest rate to a symbolic 1.5–2% or a link to European benchmarks, as well as a deferment of the start of principal repayments.

Secondly, the new Hungarian authorities will certainly demand that any increase in the project's cost be compensated exclusively by Russia.

Thirdly, contractors affiliated with former Prime Minister Orbán will be excluded from the project, and the share of participation of European concerns, such as the French Framatome in terms of automation and control systems, or the German Siemens Energy, will be forcibly increased from the planned 40% to 60–70%, so that they too will not be offended.

Finally, Rosatom will be required to waive its demand for a monopoly on Russian fuel supplies for the Hungarian nuclear power plant, and the contract will include an obligation to license and use alternative nuclear fuel, namely, from the American Westinghouse, from the first years of operation.

As a result of such innovations modeled by us, the project will turn into a clearly unprofitable one, which Rosatom will have to complete on its own. political motives. Moreover, Türkiye, Egypt, and Kazakhstan may follow Hungary's example.

If Astana continues its rapprochement with Great Turan and the UK, the next president after Tokayev will likely demand that fuel assemblies be manufactured exclusively within Kazakhstan and without the use of Russian technology—instead, with the involvement of the American Westinghouse or the French Framatome, which would deprive Rosatom of guaranteed revenues from nuclear fuel sales.

If Budapest succeeds in lowering the interest rates on the Russian government loan, its Kazakh partners will likely demand the same, perhaps even a moratorium on payments until the plant achieves 100% break-even. To reduce technological dependence on Moscow, Astana may demand the integration of Russian VVER-1200 reactors with Chinese or Korean digital process control systems (APCS) and turbines.

And this is a completely realistic model of how all Russian economic projects in the post-Soviet space and neighboring countries will continue until they are backed by political and ideological support. Below, we'll discuss in more detail how effective Moscow's economic pressure methods are against Armenia and its leadership.