Full Te ms & Condi ions o access and use can be ound a
h p://www. and online.com/ac ion/jou nalIn o ma ion?jou nalCode= ege20
Eu asian Geog aphy and Economics
ISSN: 1538-7216 (P in ) 1938-2863 (Online) Jou nal homepage: h p://www. and online.com/loi/ ege20
Russian nuclea ene gy diplomacy in Finland and
Hunga y
Pami Aal o, Heino Nyyssönen, Ma i Kojo & Palla i Pal
To ci e his a icle: Pami Aal o, Heino Nyyssönen, Ma i Kojo & Palla i Pal (2017) Russian nuclea
ene gy diplomacy in Finland and Hunga y, Eu asian Geog aphy and Economics, 58:4, 386-417,
DOI: 10.1080/15387216.2017.1396905
To link o his a icle: h ps://doi.o g/10.1080/15387216.2017.1396905
© 2017 The Au ho (s). Published by In o ma
UK Limi ed, ading as Taylo & F ancis
G oup
Published online: 05 No 2017.
Submi you a icle o his jou nal
A icle iews: 557
View ela ed a icles
View C ossma k da a
Eu asian GEoG aphy and Economics, 2017
VoL. 58, no. 4, 386–417
h ps://doi.o g/10.1080/15387216.2017.1396905
Russian nuclea ene gy diplomacy in Finland and
Hunga y
PamiAal oa, HeinoNyyssönenb, Ma iKojoa and Palla iPala
aFacul y o managemen /poli ics, uni e si y o Tampe e, Tampe e, Finland; bFacul y o social sciences/
poli ical science, uni e si y o Tu ku, Finland
ABSTRACT
We compa e Russian nuclea ene gy diplomacy owa ds
Finland and Hunga y, whe e he Russian s a e co po a ion
Rosa om in ends o build nuclea powe plan s by he 2020s.
Russian nuclea ene gy diplomacy ea u es Rosa om wo king
wi h o he s a e ins i u ions, i s own subsidia ies and an
ex ensi e ne wo k o companies and R&D ac o s o suppo
Russian nuclea powe p ojec s ab oad. Using he s uc u a ion
app oach, we ind h ee in e es s d i ing such diplomacy:
ene gy business and associa ed p o i s; mode niza ion o he
Russian economy, including he di e si ica ion o i s expo
s uc u e; while o eign policy in e es s a e also in ol ed,
conside ing he cons ain s eme ging in EU-Russia ene gy
diplomacy in he oil and gas sec o s, including he sanc ions
since 2014. Some domes ic ac o s in Finland and Hunga y
make he linkage be ween nuclea ene gy and o eign policy
as explici as do some wes e n commen a o s. Seeking o
pu sue hese in e es s, Russian ac o s mus accommoda e
hei conside able asse s o he s uc u al cons ain s hey
encoun e in he a ge coun ies. We iden i y ou s uc u al
dimensions The Russian ac o s a e well endowed as ega ds
he esou ces, echnology, and in as uc u e dimension;
and he dimension o inance, business models, and
ma ke s. Howe e , on he ins i u ional dimension hey ace
a less con ollable en i onmen . Rega ding he ecological
dimension, hey mus con o m o local sa e y equi emen s.
In bo h cases, Russian ac o s we e able o s eng hen
pe cep ions o join in e es s wi h ac o s in he a ge coun y
acili a ing he nuclea powe plan p ojec s, he eby pa ing
he way o he use o so powe .
In oduc ion
The ene gy diplomacy pu sued by Russian poli ical and business ac o s h oughou
Eu asia and beyond is a equen ly examined subjec . Exis ing esea ch ocuses on
nego ia ions on he de elopmen o new ields, pipelines and e minals, supply
© 2017 The au ho (s). published by in o ma uK Limi ed, ading as Taylo & F ancis G oup.
This is an open access a icle dis ibu ed unde he e ms o he c ea i e commons a ibu ion-noncomme cial-node i a i es
License (h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/), which pe mi s non-comme cial e-use, dis ibu ion, and ep oduc ion
in any medium, p o ided he o iginal wo k is p ope ly ci ed, and is no al e ed, ans o med, o buil upon in any way.
ARTICLE HISTORY
ecei ed 14 augus 2017
accep ed23 oc obe 2017
KEYWORDS
ussia; Finland; hunga y;
diplomacy; nuclea ene gy;
s uc u a ion
CONTACT pami aal o [email p o ec ed]
OPEN ACCESS
EURASIAN GEOGRAPHY AND ECONOMICS 387
con ac s, and deli e y p ices o Russian oil and na u al gas (e.g. Shad ina 2014)
and on ins i u ions, ag eemen s, and dispu es be ween Russia and i s cus ome
coun ies (Belyi 2015; Romano a 2016). Fu he s udies analyze how he ma ke
en y o shale oil and gas om Uni ed S a es ields has in ensi ied he compe i ion
o Russian expo e s (K opa che a 2014). Howe e , he poli ical and economic
sanc ions imposed by he EU and se e al o he s a es in Eu ope, Ame ica, and Asia
since Russia’s annexa ion o he C imea om Uk aine in 2014 hampe he ene gy
diplomacy o Russian ac o s (Aal o and Fo sbe g 2016). This “ha d powe ” ace o
Russian o eign policy uels dis us , ein o cing he ealis -geopoli ical eading o
ene gy issues being insepa able om Russian o eign policy (Dann eu he 2016;
Had ield 2016). I is he e ha nuclea ene gy diplomacy eme ges as a mo e “so
powe ” ace o Russian ac ions, esul ing in comme cially a ac i e ag eemen s
on he deli e y o nuclea powe plan s (NPPs).
Russian ene gy diplomacy in he nuclea powe sec o has been li le examined,
al hough nine een coun ies in Asia, Eu ope, and A ica ha e ecen ly signed ag ee-
men s wi h Russian pa ies on he cons uc ion o NPPs o supply o nuclea uel,
o ha e such coope a ion ongoing. Cu en ly o e one-qua e o globally ongoing
ci ilian nuclea powe p ojec s makes Russia and i s s a e co po a ion Rosa om –
wi h o e 350 subsidia y companies – he la ges p o ide in his s a egic ma ke .
In 2013 Rosa om had con ac s wo h US$66.5 billion in his oughly US$500 billion
ma ke and in ended o iple i s sales by 2030 (Da id 2014). In 2016 i s con ac
po olio eached US$100 billion (De Cle cq, Bu mis o a, and S ubbs 2016). Such
olumes o ade equi e p oac i e diplomacy mobilizing he s a e and a ne wo k
o ac o s o suppo he ope a ions o Rosa om ab oad. Some wes e n obse e s
no e ha his may inc ease Russian in luence and al e he in e na ional balance
o powe (Da id 2014; A ms ong 2015; De Cle cq, Bu mis o a, and S ubbs 2016).
Since he la e 2000s Russian o eign policy and ene gy diplomacy ha e indeed
become mo e asse i e, no ably owa d he o me So ie Union a ea (Casie 2016).
Howe e , in he key EU ma ke s, Russia combines “geopoli ical” app oaches o he
conduc o diplomacy wi h legalis ic and echnoc a ic ones (Romano a 2016).
These nuances a e some imes los in he EU ene gy deba e, whe e pe cep ions
o dependence on Russian ene gy supplies ha e become mo e ala mis owing o
p ice peaks and discussion being shaped by some Cen al and Eas e n Eu opean
(CEE) Membe S a es wi h oubled his o ical legacies is-à- is Russia (Casie 2016).
Fo example, se e al CEE s a es, in pa icula he Bal ic s a es and Poland, ha e
c i icized he planned No d S eam-2 na u al gas pipeline om Russia o Ge many
h ough he Bal ic Sea, d awing suppo om Denma k. The Eu opean Commission,
also c i ical o he p ojec , in June 2017 eques ed a manda e o nego ia e on he
ma e on behal o he Membe S a es.
In his a icle we pu sue a balanced analysis ee om any ala mism. To pa se
ou he a ious aspec s ha can be ela ed o Russia’s NPP expo s, we i s sys-
ema ically examine he in e es s d i ing Russian nuclea ene gy diplomacy and
hen he s uc u es wi hin which Russian ac o s seek o p omo e hose in e es s
388 P. AALTO ET AL.
in he a ge coun ies. Ou scope is limi ed o ci il nuclea ene gy. Al hough mos
o Rosa om’s in e na ional p ojec s a e in Asia, we ocus on wo cases in he EU;
namely, Finland and Hunga y. This ocus is ele an o se e al easons. Fi s , we
co e Rosa om’s wo majo NPP supply ag eemen s in he EU – one in an “old” EU
Membe S a e (Finland) and he o he mo e ecen ly acceded (Hunga y).1 Finland
and Hunga y con ac ed new NPPs om Rosa om in 2013 and 2014 espec i ely,
bo h scheduled o s a ope a ion in he 2020s. Second, he wo coun ies ha e
ex ensi e ene gy ade wi h Russia and So ie -supplied NPPs. Thi d, nuclea powe
is c ucial o bo h, accoun ing in 2014 o 35% o domes ically p oduced elec ici y
in Finland and o 53% in Hunga y (Wo ld Nuclea Associa ion [WNA] 2016). Fou h,
he con ac s no only p o ide a key EU-a ea e e ence o Rosa om’s in e na ional
ac i i ies bu also ep esen a diploma ic iumph o Russia. The diploma ic gains
a e signi ican in iew o he EU’s sanc ions agains selec ed Russian ac o s in which
Finland and Hunga y also pa icipa e.
2
In he case o Finland, he con ac also goes
agains he ide in he wide geos a egic con ex , whe e he coun y is in ensi ying
i s coope a ion wi h he NATO mili a y alliance and whe e he Russian pa ies eac
nega i ely o he e-ac i a ed deba e on possible u u e NATO membe ship, in
iew o he wo coun ies sha ing a bo de .3 Fi h, Finland and Hunga y a e in e -
es ing inasmuch as hey a e legally bound by he EU compe i ion ules go e ning
ene gy p ojec s and poli ically commi ed o he a ge o he Ene gy Union o
educing dependencies on la ge ex e nal supplie s (Eu opean Commission 2015a).
As such, hey a e pa o an in eg a ing ene gy ma ke p omo ing libe aliza ion
o enhance compe i ion, whe eas Russia e ains con ol o e mos o he ene gy
sec o (Dann eu he 2016), wi h some compe i ion in he elec ici y ma ke (Aal o
e al. 2012).
In sho , he Finnish and Hunga ian cases ypi y he mix u e o his o ically de el-
oped bila e al ene gy coope a ion and con empo a y mul ila e al s uc u es o
EU-Russia ene gy ela ions wi h moun ing ensions and he wo pa ies on di -
e en ma ke de elopmen ajec o ies. We he eby ask (1) which in e es s d i e
Russian nuclea ene gy diplomacy in he cases o Finland and Hunga y, and (2)
o wha ex en can Russian ac o s ealize hei in e es s in hese wo cases. Ou
compa ison seeks o assess he balance be ween he asse s Russian ac o s possess
and he s uc u al cons ain s hey encoun e in he pu sui o hei in e es s. We
aim he eby o p o ide a i me basis o u he esea ch and deba e on Russian
nuclea ene gy diplomacy. Alongside case-speci ic ea u es, we will also add ess
EU-le el legal obliga ions and commi men s. Ou main ocus will be on he con-
duc and oom o maneu e o Russian ac o s a he han on he policies o he
EU, Finland, o Hunga y pe se.
In he second sec ion o his a icle we su ey he exis ing esea ch. In he hi d
sec ion, we discuss ou me hodological solu ions, including ou concep ualiza ion
o Russian ac o s, hei in e es s, and he s uc u es encoun e ed in ope a ions
ab oad. In he ou h and i h sec ions we examine he conduc o Russian ac o s
be o e p esen ing ou conclusions.
EURASIAN GEOGRAPHY AND ECONOMICS 389
Russian nuclea ene gy diplomacy: Wha do we know?
Exis ing esea ch is sca ce and does no add ess wha nuclea ene gy diplomacy
migh mean on he concep ual plane o speci ically in he Russian con ex . In a
a e sys ema ic s udy, S ulbe g (2007) ound ha he p edecesso o Rosa om, he
Fede al Agency on A omic Ene gy, succeeded in p omo ing nuclea ene gy ag ee-
men s wi h Ky gyzs an and Kazakhs an by widening he ange o choices o he
a ge coun ies. To his end, i o e ed join en u es, asse swaps, and ex ension
o ade ela ions o o he segmen s and p oduc s. E en hough o eign policy
in e es s we e in ol ed, Russian ac o s made s a egic comp omises when equi ed
o pu sue business in e es s.
Ku o (2010) si ua es Russian nuclea ene gy diplomacy in he con ex o global
compe i ion o oil and gas due o he high p ices o he mid-2000s ha ampli ied
he po en ial o nuclea ene gy. He also men ions how he Russian ac i i ies in
cons uc ing he Busheh NPP in I an led o con o e sies wi h he US and NATO
(Ku o 2010). In his con ex , Rosa om’s con ac o an NPP in Akkuyu, Tu key, in
May 2010 was signi ican gi en ha Tu key is a NATO membe wi h special ies o
he Uni ed S a es and suppo ed he bid by Russia o become a “global leade in
nuclea powe plan cons uc ion” (So niko 2010).
Low y (2016) no es how ci il nuclea powe echnology is indeed one o he
s a egic high echnology indus ies suppo ed by he Russian s a e as pa o a
de elopmen al agenda. A he same ime, Oxens ie na (2014) implies ha he
Russian business and de elopmen al in e es s p esuppose assuming a s ong ole
in in e na ional coope a ion on nuclea sa e y and secu i y issues, especially in he
a e ma h o he Fukushima nuclea disas e o 2011.
The e a e no sys ema ic s udies on Russian nuclea ene gy diplomacy owa ds
he EU, Finland, o Hunga y. Ye we know ha in he Finnish domes ic deba e, he
p o-nuclea lobby amed he 2013 con ac wi h Rosa om in e ms o he deca -
boniza ion p ospec s o nuclea powe . The Finnish ac o s mo eo e exp essed
an in e es in secu i y o supply by s essing how building a mode n plan would
educe he need o buy elec ici y om Russia (Sy jämäki, Kojo, and Li manen
2015; Ylönen e al. 2015).
Me hodological solu ions: How o app oach Russian nuclea ene gy
diplomacy
Ou main me hodological solu ion is o apply he s uc u a ion app oach, caus-
ing us on he one hand o s udy he in e ac ion among Russian ac o s and hei
in e es s, and on he o he , he s uc u es shaping hei ope a ions ab oad. The
cons aining and enabling quali ies o hese s uc u es a e modeled in e ms o
policy en i onmen s wi h ou analy ically dis inguishable dimensions (Aal o e
al. 2012).

390 P. AALTO ET AL.
Ac o s
Russian nuclea ene gy diplomacy is a coo dina ion exe cise in ol ing se e al
ac o s. The s a e is he o mal leade : he P esiden , his adminis a ion, and he
ele an minis ies, and agencies. In p ac ice, Rosa om is he mos engaged Russian
ac o . I is a s a egic, e ically in eg a ed, and ully s a e-owned en e p ise wi h
wide- anging esponsibili ies and se e al subsidia ies.
Rosa om explo es u anium deposi s, p oduces nuclea uel commodi ies by
means o con e sion and en ichmen , designs eac o s and powe plan s, and
o e s o he echnological solu ions, also ope a ing he plan s. In 2015 Rosa om
p o ided o 18.6% o Russia’s elec ici y supply, aiming a 25–30% by 2030 and
45–50% by 2050 (WNA 2015). Nuclea sa e y, s o age, and he managemen o
spen nuclea uel and adioac i e was e a e also among Rosa om’s unc ions.
Rosa om no only seeks global echnological leade ship (Rosa om 2015a) bu also
pa icipa es in in e na ional coope a ion ega ding he peace ul uses o a omic
ene gy and he nuclea non-p oli e a ion egime.
Rosa om coo dina es a la ge ne wo k o enginee ing, in as uc u e, and con-
s uc ion companies, as well as scien i ic and R&D ac o s, many o which ecei e
s a e unding. In hese ne wo ks, indi iduals can ci cula e om one company o
ano he o be ween companies and s a e ins i u ions (Tikkala 2016). Rosa om
mo eo e ope a es echnology pa ks and inances inno a ions. I s eligibili y o
ecei e inancing om he s a e is a c ucial asse in his capi al-in ensi e high
echnology business (Low y 2016).
In e es s
A balanced assessmen o hese ac o s’ combined ac ions equi es us o examine
wha hey a e a e . We iden i y h ee main in e es s o he s a e, Rosa om, and i s
ne wo ks d i ing hei in e ac ion wi h Finnish and Hunga ian ac o s.
Fi s , he Russian ac o s sha e an in e es in ene gy business and p o i s.
This in e es pe ains o he in e na ional nuclea ene gy ma ke ha he US
Depa men o Comme ce expec s o g ow om US$500 billion o US$740 billion
o e he nex decade. The p o i s no only d i e he managemen o he compa-
nies in ol ed, bu also suppo he iscal in e es s o bo h he Russian Fede a ion
and he egions h ough he nume ous Rosa om subsidia ies (see Table 1). The
Russian go e nmen ’s 2008 Concep o Long-Te m Socio-Economic De elopmen
un il 2020 names high echnology indus ies as a majo d i e o u u e economic
g ow h. Howe e , high echnology so a accoun s o only 3% o GDP, including
he nuclea ene gy sec o . Ye he po en ial is conside able since Russia has econ-
omies o scale in his a ea and he lowes cos s in he wo ld o u anium en ich-
men (Low y 2016). The na ional p og am “De elopmen o he Nuclea Powe
and Indus y Complex” a ge s a 53% g ow h in o e seas e enues by 2020 and a
14.9% g ow h in he indus y’s con ibu ion o he olume o GDP (Go e nmen o
EURASIAN GEOGRAPHY AND ECONOMICS 391
he Russian Fede a ion 2014). The ene gy business is also a signi ican employe . I
we assume ha each US$1 billion in expo s leads o some 5000 domes ic manu-
ac u ing jobs (Da id 2014) and ha Rosa om’s expo s will iple om 2013 as he
Table 1.main subsidia ies o osa om in he Finnish and hunga ian cases.
aThe s . pe e sbu g di ision o a omene gop oek oge he wi h VnipiET Lead ins i u e became pa s o a omp o-
ek . This subsidia y handles bo h he hanhiki i-1 and paks-2 eac o cons uc ion con ac s (a omp oek 2014).
bThe nizhny no go od design ins i u e me ged in 2012 wi h a oms oyexpo (asE) in o de o bols e asE’s engi-
nee ing capabili y and enhance he compe i i e capaci ies o bo h companies. F om 2014 i became he pa -
en company o a omene gop oek (aEp). The easoning behind his me ge was o consolida e ussia’s nuclea
powe enginee ing expe ise in o a single di ision. aEp has h ee di isions: in moscow, in sain pe e sbu g, and in
nizhny no go od. The nizhny no go od di ision and he moscow di ision o aEp a e unde he execu i e con ol
o he niaEp-asE (Wnn 2014).
Subsidia ies Role
Jsc a omene gop om (Jsc aEp) The osa om subsidia y holding company o ci il
nuclea ene gy ha includes powe plan ope a o
osene goa om; nuclea uel p oduce and supplie
TVEL; u anium ade Tenex; equipmen supplie
a omene gomash; and o e seas nuclea builde
a oms oyexpo
osene goa om conce n oJsc a osa om and a omene gop om subsidia y espon-
sible o ope a ing he npps and selling he powe
gene a ed
TVEL Fuel company a osa om and a omene gop om subsidia y
esponsible o nuclea uel assemblies, p oduc ion,
and supply o nuclea uel o ussian npps and
ab oad. in 2013 TVEL along wi h osa om d a ed
he nuclea supply ag eemen s wi h Finnish and
hunga ian ac o s
TEnEX (Techsnabexpo ) a osa om and a omene gop om subsidia y espon-
sible o u anium con e sion o en ichmen se ices
and o expo ing nuclea uel
Jsc conce n Ti an-2 an enginee ing company esponsible o si e p epa-
a ion, cons uc ion, and ins alla ion wo k, as well
as de elopmen o design and supply o all he
equi ed ma e ial and equipmen
a omene gomash G oup (aEm G oup) a osa om, a omene gop om, and TVEL subsidia y
esponsible o equipmen design, p oduc ion,
deli e y, ins alla ion, and main enance o nuclea
as well as con en ional powe plan s
Jsc a omp oek aan enginee ing company designing npps and p o id-
ing hem wi h mode n compu e -based ins umen-
a ion and con ol sys ems
Jsc nizhny no go od Enginee ing company (Jsc
niaEp) <<a omene gop oek >>b
an enginee ing company ha designs, cons uc s,
and pu s in o ope a ion powe acili ies in ussia
and implemen s p ojec s ab oad. also p o ides
hem wi h mode n compu e -based ins umen a-
ion and con ol sys ems
Jsc a oms oyexpo (Jsc asE) a key o eign ade enginee ing company esponsi-
ble o he cons uc ion o nuclea powe acili ies
ab oad; since 2012, wo king wi h Jsc niaEp o
he implemen a ion o i s p ojec s as a pa o he
in eg a ed company Jsc niaEp-Jsc asE
oKB Gid op ess a subsidia y o osa om esponsible o designing he
equipmen and sys ems in ended o powe and
nuclea indus y
aos p ojec oy a Finnish subsidia y in cha ge o he nuclea eac o
supply o he hanhiki i-1 npp
aos Voima oy a Finnish subsidia y ep esen ing osa om wi h 34%
in he Finnish Fenno oima, a p i a e company
building he six h npp uni in Finland
392 P. AALTO ET AL.
company expec s, he numbe o skilled employees in his sec o would g ow om
some 300,000 o almos a million (Go e nmen o he Russian Fede a ion 2014).4
Second, he nuclea ene gy business helps o p omo e Russia’s wide socio-eco
-
nomic in e es s in he o m o he mode niza ion o he economy and di e si ica-
ion o i s expo s uc u e. The Russian economy is locked in o esou ce e enues
om oil and na u al gas (Gaddy and Ickes 2013). Russian ene gy policy planning
seeks o educe his dependence. Ins ead o aking ossil uel esou ces as he main
ehicle o de elopmen , i iden i ies he ene gy sec o o e all as an in as uc u e
o be de eloped (Minis y o Ene gy o he Russian Fede a ion 2014). This implies
ha Russian economic policy is aking a mo e de elopmen alis di ec ion. The
s a e ac i ely suppo s high echnology indus ies and R&D in a eas in which Russia
con inues o enjoy compe i i e ad an age as a legacy o he So ie e a. Rosa om
is one o hese na ional champion companies. Since i s e o m in 2007, Rosa om
has inc eased i s in es men s in R&D se en old, he annual a e being ela i ely
high a 4.5% (Low y 2016). The nuclea indus y can help o u he di e si y he
economy and expo s by gene a ing demand o p oduc s and se ices in engi-
nee ing, he s eel indus y, geology, and cons uc ion. The NPP p ojec s ab oad
ha e such wide- anging mode niza ion po en ial by i ue o Rosa om using se -
e al Russian con ac o s.
Thi d, he in e es o he s a e in o eign policy in luence also shapes he
ac i i ies o Rosa om ab oad. Some wes e n commen a o s hink Russian-buil
NPPs unc ion like embassies (A ms ong 2015). Owing o he espec i e long-
e m con ac s, hey inc ease poli ical coope a ion wi h he hos coun ies (see
Spu nik News 2015). Fo some, hese p ojec s a e “ i mly on he Russian P esiden ’s
agenda”; he e o e, “while nuclea powe expo s ha e bo h comme cial aspec s
and mode nizing a gumen s suppo ing hem, hei s a egic and poli ical alue
is also undeniable” (Ma ikainen and Vihma 2016). The Russian Fo eign Policy
Concep o 2013 s a es mo e neu ally ha one o he basic goals o o eign pol-
icy is “s eng hening Russia’s posi ions in he global ade and economic sys em,
p o iding diploma ic suppo o na ional economic ope a o s ab oad” (Minis y o
Fo eign A ai s 2013). To his end, Russia “wo ks o c ea e a o able poli ical en i-
onmen o di e si y Russia’s p esence in global ma ke s h ough he b oadening o
i s expo s nomencla u e and o he geog aphy o i s o eign economic and in es -
men ela ions” (2013). A he same ime, Russia’s Na ional Secu i y S a egy o 2016
men ions somewha bleak economic p ospec s and iden i ies he sanc ions as an
impedimen o diploma ic e o s o emedy he si ua ion (Ku ee 2016). Al hough
o icial s a egies emain ambiguous on he connec ions be ween o eign policy
and ene gy (o e en mo e so o nuclea ene gy), schola ly analyses equen ly link
he wo. Howe e , as discussed below, we should no equa e hem in a adi ional
geopoli ical ashion bu need mo e nuanced analysis in he EU-Russian con ex in
pa icula (see Dann eu he 2016).
Such de ailed analysis mus acknowledge how Russian ac o s pu sue hei in e -
es s in an in e ac i e con ex whe e hei coun e pa s’ “ eadings” o in e p e a ions
EURASIAN GEOGRAPHY AND ECONOMICS 393
o hese Russian in e es s a e decisi e. Bo owing om Feklyunina (2016), he
ene gy business and p o i in e es s, o example, may be pe inen no only o
Russian ac o s, bu also o ac o s in he a ge coun y. I so, a deg ee o collec i e
iden i y p e ails be ween he wo pa ies. Such a compa ible unde s anding o
“ou ” join in e es s opens a window o oppo uni y o Russian ac o s o exe cise
“so powe ” making ce ain ou comes mo e likely han o he s; o example, acil-
i a ing ag eemen s on NPP p ojec s. How we see he pu sui o Russian in e es s
is always a subjec i e and con ex -dependen exe cise. Russian ac ions can be
associa ed wi h ha d powe quali ies i pe cei ed o ha e been imposed o wi h
so powe quali ies i pe cei ed as a sha ed p ope y o he pa ies.
The h ee in e es s we disce n a e also in e ela ed and as such may be mu ually
suppo i e o incompa ible. The weigh o each in e es a ies. Ac o s may pu sue
hem explici ly o implici ly. We can now hypo hesize ha he ex en o which he
Russian ac o s can u he hei in e es s in nuclea ene gy diplomacy is a case- and
con ex -speci ic ques ion. The ealiza ion o he in e es s depends on he balance
be ween he asse s Russian ac o s possess and he cons ain s o he s uc u e in
which hey conduc hei ope a ions. We will model he s uc u e in Finland and
Hunga y wi hin he concep o he policy en i onmen . I includes ou dimensions
shaping he way in which Russian ac o s can u he hei in e es s.
Policy en i onmen s
Russian nuclea ene gy diplomacy encoun e s a ious policy en i onmen s in indi
-
idual EU Membe S a es. The main p inciples o he Ene gy Union – ene gy secu-
i y, compe i i e ma ke , ene gy e iciency, de-ca boniza ion, and R&D (Eu opean
Eu opean Commission 2015a) – se he o e all policy amewo k o nuclea ene gy.
The Eu a om T ea y o 1957 se s a 20% limi on he supply o u anium o nuclea
powe plan s om a single ex e nal sou ce and s ipula es coope a ion on nuclea
esea ch, sa e y, and secu i y (Mal by 2013). The ma ke s p inciple o EU ene gy pol-
icy equi es he use o a compe i i e p ocess o he con ac ing o nuclea powe
plan s. Apa om hese p o isions, he EU lacks an explici nuclea ene gy policy.
The Fukushima disas e u he educed he demand o such a policy (Talus 2013).
While Ge many is phasing ou i s NPPs and Sweden e ains om building any
mo e, Finland, Hunga y, Bulga ia, he Czech Republic, F ance, Li huania, Poland,
Slo akia, and he Uni ed Kingdom con inue wi h hei nuclea powe p ojec s
(Eu opean Commission 2017a).
Alongside his gene ic EU policy amewo k, Russian ac o s mus me iculously
analyze he na ional policy en i onmen in which hey wish o ope a e. We sugges
s a ing his analysis om he esou ces, echnology, and in as uc u e dimen-
sion. Russian ac o s can shape his dimension decisi ely. In 2014, 18% o u anium
supplied o he EU came om Russia (WNA 2015). The Russian i m JSC TVEL has a
nea - monopoly o e uel supply o he VVER-440 eac o s in he EU (Vlček 2016).
The VVER-440 uni s a e he i s ype o he VVER amily and numbe al oge he
400 P. AALTO ET AL.
Wi h Rosa om as he eac o supplie , Fenno oima had o upda e he
En i onmen al Impac Assessmen (EIA) epo (Sy jämäki, Kojo, and Li manen
2015). The upda ed epo concluded ha in ela ion o he o iginally in ended
1800MW plan , “ he impac o adioac i e emissions will be o oughly he same
magni ude” (Fenno oima 2014).
To suppo he Russian in e es in mode niza ion and di e si ica ion o expo s,
Rosa om needed Hanhiki i-1 as an in e na ional e e ence. I he e o e needed o
ul ill he nuclea sa e y s anda ds in Finland. In 2012 Rosa om ec ui ed he e i ed
Di ec o Gene al o STUK, Jukka Laaksonen, as Vice P esiden in Rosa om O e seas.
Acco ding o Rosa om (see A omene gop om 2012), he ec ui men “speaks o
how much impo ance we a ach o he e ec i eness and sa e y o ou p ojec s.” In
he p elimina y sa e y assessmen , STUK (2014a, 2014b) equi ed e isions o mee
he Finnish equi emen s. Fu he c i icism om neighbo ing Sweden ocused on
he c oss-bo de impac s o he plan .
By 2016, Fenno oima had no sol ed he p oblem o managemen o spen
nuclea uel. Posi a L d., which is building a inal disposal acili y o he exis ing
NPPs, only ag eed o collabo a e by selling expe se ices, bu no o sha e he
acili y. The Minis y o Economic A ai s and Employmen (2014, 2016) deemed
Fenno oima’s epo s su icien a ha poin and allowed i o con inue he p ocess
o applying o a cons uc ion license. The go e nmen in ends o decide on he
applica ion by 2019 (Table 2).
The ealiza ion o Russian in e es s in he case o Hunga y
In 2015, 52% o he elec ici y p oduced in Hunga y came om nuclea powe ,
19% om coal, 17% om na u al gas, and he es om enewables (mos ly om
biomass and wind powe ); howe e , al oge he 38% o elec ici y consumed was
impo ed (Eu opean Commission 2017b). In Hunga y he sha e o nuclea powe
in he gene a ion o elec ici y is he i h la ges in Eu ope a e F ance, Slo akia,
Belgium, and Uk aine (Index 2014). Hunga y’s o e all ene gy impo dependence,
52% in 2013, was in line wi h he EU a e age, o high by Hunga ian s anda ds
(Eu opean Commission 2015b; Minis y o Na ional De elopmen 2012). In 2012,
85% o oil, 79% o na u al gas, and 100% o nuclea uel we e Russian impo s
(Ámon and Deák 2015). Since Hunga y is land-locked, al e na i e supplie s o oil
and na u al gas a e limi ed.
So ie nuclea echnology and Russian nuclea uel supplies a e indispensable
o Hunga y’s nuclea ene gy sec o . Poli ically, Hunga y belonged o COMECON
and he Wa saw Pac , hus o de ing a nuclea powe plan om he Wes was p ac-
ically impossible (Nyyssönen 2006). The own o Paks in sou he n Hunga y is he
si e o ou So ie -supplied 500MW VVER-440 eac o s, ope a ed by he ully s a e-
owned MVM (Magya Villamos Mű ek). In Ma ch 2009 he Hunga ian Pa liamen
made a decision-in-p inciple on he p epa a o y wo k o Paks-2, comp ising wo
new uni s. In June 2012 he go e nmen made Paks-2 a high p io i y. The oldes

EURASIAN GEOGRAPHY AND ECONOMICS 401
wo Paks eac o s ecei ed a 20-yea li e ime ex ension in 2012 and 2014 un il
he 2030s. The expansion o nuclea powe akes place in he con ex o se e al
cu -o s o na u al gas deli e ies o Hunga y since he mid-2000s due o Russian-
Uk ainian dispu es (Acke mann 2014; Ma ni z 2014). To dec ease he isks o an-
si h ough Uk aine, Hunga y suppo ed he Gazp om-led Sou h S eam pipeline
p ojec , which had collapsed by la e 2014. The Hunga ian deba e hen u ned o
possible Russian gas impo s h ough Tu key (Népszabadság 2015a). Russian ac o s
ha e consolida ed hei posi ion in he Hunga ian ene gy sec o since he e u n
o powe o P ime Minis e Vik o O bán and his Fidesz Pa y in 2010.
Table 2. ealiza ion o ussian in e es s in he case o Finland.
Resou ces, echnology,
and in as uc u e
Finance, business mod-
els, and ma ke s Ins i u ional Ecological
osa om’s TVEL concluded
a en-yea ag eemen
wi h he Finnish commis-
sioning p i a e company,
Fenno oima, o he
p o ision o nuclea uel
o he hanhiki i-1 npp
€6.5–7bln cos es ima e
o which a €4.8–5.3bln
loan o be a anged
by he ussian pa ies;
Finnish Go e nmen
declined ejec ed
u he osa om in es -
men by equi ing 60%
Eu a ea owne ship – o
mee his c i e ion,
he pa -s a e owned
Fo um acqui ed 6.6%
as a “doo opene ” o a
possible Join Ven u e
wi h osa om
a e pa liamen accep ed
Fenno oima’s e ised
applica ion o a deci-
sion-in-p inciple wi h
osa om as eac o
supplie , he G eens le
he Finnish go e nmen
in p o es agains he
2010 decision, c i iciz-
ing he go e nmen
o “ inlandiza ion” and
wa ning o oo close
connec ions o ussian
o eign policy in e es s
The p ojec was com-
pa ible wi h Finnish
and Eu clima e policy
and deca boniza ion
a ge s
The npp is se o u ilize
he ussian VVE plan
echnology in iew o he
Fukushima acciden o
u he he mode niza-
ion and di e si ica ion
in e es s o he ussian
go e nmen ; howe e ,
osa om su e ed se ious
delays in p oducing he
documen a ion o a
cons uc ion license
Tu nkey business model
and p ospec i e elec-
ici y sales business in
he Finnish and no dic
ma ke s as a pa owne
o Fenno oima, which
se a maximum p ice
o €50/mWh o he
elec ici y he plan
would s a o p oduce
in 2024. se e al
Finnish sub-con ac o s
in ol ed o ca e o
“join in e es s”
immedia ely a e Fenno-
oima passed he i s
phase in licensing, i
p oceeded o apply o
a cons uc ion license
wi h documen a ion
o sa e y assessmen .
howe e , his s ep was
delayed because o
disag eemen s among
osa om, Fenno oima,
and Finnish au ho i ies
on documen a ion
To suppo ussian
in e es in mode niza-
ion and di e si ica ion
o expo s, osa om
needed hanhiki i-1
as an in e na ional
e e ence; o achie e
his i needed o
ul il he nuclea sa e y
s anda ds in Finland
ussian companies Ti an-2,
a omene gomash, oKB
Gid op ess, and a om-
p oek selec ed wi h Fen-
no oima’s app o al as
he main subcon ac o s
o in as uc u e de el-
opmen , hus se ing
he ussian business and
mode niza ion in e es s
The ag eemen acco ding
o p esiden pu in
is bene icial o he
ussian economy and
a good in es men by
he ussian na ional
Weal h Fund. howe e ,
his commi men was
being econside ed
immedia ely owing o
inancing sho alls in
he ussian budge
Fenno oima and osa-
om had o con ince
Finnish socie y o
he ele ance o he
p ojec by o ganizing
e en s o s akeholde s,
sponso ing ac i i ies
o young people, and
p omising jobs and
o he oppo uni ies o
local companies
Fenno oima’s epo s
deemed su icien
by he esponsible
minis y e en wi h an
un esol ed inal dis-
posal a angemen o
spen nuclea uel; he
company was allowed
o p oceed o applying
o a cons uc ion
license. The decision
o he applica ion is
scheduled o 2019
402 P. AALTO ET AL.
The esou ces, echnology and in as uc u e dimension
Rosa om concluded he ag eemen o he Paks-2 NPP in Moscow in Janua y 2014,
in he p esence o Rosa om CEO Se gei Ki iyenko, P esiden Pu in, and PM O bán.
The Nizhny No go od Enginee ing Company A omene gop oek (NIAEP-ASE) (see
Table 1) is esponsible o he enginee ing, p ocu emen , and cons uc ion o wo
1200MW VVER AES1200 eac o s, modeled on Hunga y’s exis ing eac o s. They
should be in comme cial ope a ion by 2025 and 2026, al hough he En i onmen al
Impac Assessmen men ions he yea s 2025 and 2030 (see MVM E be 2015).
Rosa om’s subsidia y, JSC TVEL, o iginally concluded a 20-yea exclusi e nuclea
uel supply ag eemen wi h MVM, which was cu o 10yea s a e he Eu a om
Supply Agency and he Eu opean Commission in e ened o ensu e compe i ion
among uel supplie s.
The posi ion o Russian companies as he majo subcon ac o s se es no only
he business and p o i s in e es s o Rosa om, i s ne wo k, and he Russian go e n-
men , bu also Russian mode niza ion and he di e si ica ion o expo s in e es .
In Feb ua y 2015 he Ge man Chancello Angela Me kel p omo ed he in e es s o
Siemens in he cons uc ion p ocess (Magya Nemze 2015; Népszabadság 2014b,
2015b).
The inancial, business models and ma ke s dimension
The es ima ed cos o Paks-2 is €12 billion, including he supply o nuclea
uel. Rosa om ini ially commi ed o a anging a €10 billion loan, epayable by
2044, wi h he ully s a e-owned Vnesheconombank as he likelies unde . The
Hunga ian side was o p o ide €2 billion, bu in ea ly 2017 P esiden Pu in aised
his o e o co e he whole amoun o he loan.7 Acco ding o A ila Aszodi, he
s a e commissione in cha ge o he expansion, he o e o inance made Rosa om
p e e able o A e a o Wes inghouse (Than 2015). Howe e , conce ns eme ged in
Hunga y o how a long- e m loan om a Russian s a e en i y o a Hunga ian s a e
en i y migh inad e en ly se e Russian o eign policy in e es s a he expense
o Hunga y. The Eu opean Commission o i s pa sc u inized he Hunga ian pa
o he inancing ega ding possible s a e subsidies bu app o ed i a e measu es
o con ol “undue dis o ions” o compe i ion in he Hunga ian ene gy ma ke
(Eu opean Commission 2017c; Népszabadság 2015e, 2016).
In he Hunga ian case, Rosa om used a u nkey business model simila o ha
used in Finland and sough o accommoda e Hunga ian in e es s by ans e ing
he plan o ull owne ship o MVM and by assu ing domes ic i ms a 40% sha e in
he cons uc ion p ocesses. The Hunga ian go e nmen u he mo e expec ed he
plan o gene a e up o 10,000 new jobs and educe ene gy dependence (Lázá
2014).
Howe e , con a y o i s plans in Finland, Rosa om will no sell elec ici y in
he Hunga ian ma ke . Becoming a ma ke pa icipan in Hunga y may in ac
EURASIAN GEOGRAPHY AND ECONOMICS 403
comp omise he p o i in e es s o Rosa om. In 2013 PM O bán sugges ed ha
Hunga ian elec ici y p ices could become he lowes in he CEE in some ou o i e
yea s (Index 2013). Howe e , some obse e s deem such expec a ions odd gi en
he in es men cos s o he new uni s, which should make consume p ices some
h ee imes highe o ende he in es men s p o i able (Sipos 2013). The go e n-
men has based i s legi imacy on low elec ici y p ices and commi ed o ezsicsök-
ken és, meaning he educ ion o u ili y bills and li ing cos s. This was one o he key
issues in he 2014 elec ion campaign o he O bán egime (Népszabadság 2014a;
Ko ács 2015). In p ac ice, he go e nmen ’s policy o de e mining he p ice has
led o ezsiha c (o e head wa ) wi h B ussels (Magya Nemze 2014). The opposi-
ion has suppo ed mo e ma ke -based mechanisms wi h he a gumen ha low
p ices lead o highe consump ion and delay in es men s in enewable ene gy.
Since 2014 a deba e o e elec ici y p ices has gone on concu en ly wi h
eme ging conce ns abou Russian o eign policy in e es s. Such in e mingling o
he dimension o inance, business models, and ma ke s wi h o eign policy issues
has become pa o he policy en i onmen Russian ac o s encoun e in Hunga y.
Thus when P esiden Pu in isi ed Hunga y in Feb ua y 2015, he wi nessed exp es-
sions o hese conce ns wi h demons a o s shou ing slogans like “We will no be
a [Russian] colony” (Népszabadság 2015a,c).
The ins i u ional dimension
Rosa om was nego ia ing he Paks-2 ag eemen a a ime when Hunga y’s ela ions
wi h he Eu opean Union and he Uni ed S a es we e cooling. Rosa om signed he
2014 ag eemen wi h Hunga y a e he Uk ainian P esiden , Vik o Yanuko ich, had
accep ed a deal wi h Russia ins ead o he long-nego ia ed associa ion ag eemen
wi h he EU. Howe e , Rosa om concluded he ag eemen be o e he Uk ainian
Maidan up ising led o his ous ing om o ice and he Eu opean Union, he Uni ed
S a es, and se e al o he s a es imposed sanc ions on Russia.
Unlike in Finland, Rosa om was no dealing wi h a nuclea powe lobby consis -
ing o indus ies and municipali ies bu wi h a go e nmen in e es ed in e aining
i s domes ic poli ical powe , making he Paks-2 ag eemen pa o i s elec o al
campaign. While in opposi ion, he Fidesz Pa y was c i ical o Russian in luence.
When in o ice and in he un-up o he elec ions, i allied i s in e es s o s ay in
powe wi h he in e es s o Rosa om and Russia (Lázá 2014). Ou app oach ea s
he eme gence o such sha ed in e es s as a pla o m o Russian ac o s using so
powe . O bán’s o e whelming majo i y enabling a powe ul leade ship simila o
ha enjoyed by P esiden Pu in o i s pa pa ed he way o Russian ac o s o
ocus any pe suasi e e o s equi ed on only one g oup in Hunga y. The supe -
majo i y enabled Fidesz o limi he pa liamen a y p ocessing o jus ou days. The
uling pa y ecei ed suppo om he ul a-na ionalis Jobbik Pa y, which has
connec ions o Russia, bu also aced espionage allega ions (Népszabadság 2015 ).
404 P. AALTO ET AL.
The ag eemen and i s pa liamen a y app o al esul ed in ins i u ional u moil
beyond he con ol o Rosa om o Russia. The i s eac ions o he opposi ion and
he NGOs anged om calls o a e e endum o an ex a session o he pa liamen
(Népszabadság 2014b). In 2014 he g een-libe al Lehe Más a Poli ika (LMP) p o-
es ed agains he pa liamen a y session by sounding a si en: hey c i icized he
has y pa liamen a y p ocedu e and lack o access o backg ound documen s (ATV
2014), as did he o me P esiden o Hunga y, László Sólyom. While Paks-2 was
one o he mos impo an decisions o he O bán go e nmen , he opposi ion
deemed he quali y o poli ical deba e low, hei own ea men un ai , and he
whole p ocedu e a iola ion o he o de o he pa liamen (Tibo 2014). Fidesz
amed he ag eemen wi h Rosa om in e ms o na ional secu i y and he eby
jus i ied he classi ica ion o he documen s.
E en ually he P esiden o Hunga y, János Áde , a i ied he bill in Feb ua y
2014. By No embe 2014, he Russian Fo eign Minis e Se gei La o had com-
mended Hunga y o no succumbing o “Russophobic app oaches,” unlike some
o he CEE s a es in he EU (Than 2015). In 2015 he Eu opean Commission launched
an in ingemen p ocedu e agains Hunga y o suspec ed iola ion o he pub-
lic p ocu emen ules, bu closed he case in No embe 2016. In he Eu opean
Pa liamen , in addi ion o c i icism o he s a e o democ acy and eedom in
Hunga y, he Paks case aised doub s ega ding he lack o public consul a ion,
ambiguous ene gy secu i y e ec s, and compa ibili y wi h Eu opean law (c .
Pa liamen a y ques ions 2015).
The Hunga ian go e nmen e ec i ely es uc u ed some o he no ms and
p ac ices in he coun y a he expense o anspa ency by classi ying he de ails
o he case o 30yea s ins ead o he no mal 15yea s. The go e nmen jus i ied
his by ea s abou sensi i e in o ma ion being leaked o e o is s (Népszabadság
2015d). The LMP again adop ed ex a-pa liamen a y measu es such as using meg-
aphones and banne s (O szággüylési Napló 2015). The Russian and Hunga ian
go e nmen s comple ed he o mali ies by upda ing he 2001 in e go e nmen al
ag eemen on nuclea ene gy (Soglashenie 2014).
Soon a e he classi ica ion decision, in Ma ch 2015, he Hunga ian G eens
o ganized a hea ing in Pa liamen (Daily News Hunga y 2015). They compa ed he
expedi ed p ocedu e o ha in Finland whe ein Fenno oima nego ia ed on de ails
o yea s, and ques ioned i he go e nmen was unawa e o he EU Commission’s
opposi ion o he ini ially ag eed 20yea s’ uel supply monopoly. The leade o he
Hunga ian ci ic lobby Ene giaklub, Ada Ámon, u he c i icized he go e nmen ’s
ailu e o publish any s udies on he impac s o he Paks-2 p ojec on he ene gy
ma ke s o p ices (Hunga y Ma e s 2015; Index 2015). O e all, o he go e nmen ,
he case depended on domes ic in e es s in e aining poli ical powe by secu ing
allegedly cheap ene gy. Fo he opposi ion, i comp omised Hunga ian o eign
policy in e es s in commi ing he u u e o he coun y o decades o come. The
opposi ion pe cei ed he go e nmen o ha e been in luenced by Russian use o
so powe .
EURASIAN GEOGRAPHY AND ECONOMICS 405
The ecological dimension
Vis-à- is he ecological dimension, Rosa om nego ia ed wi h a go e nmen p e-
e ing cen alized nuclea powe p oduc ion due o in e es s in secu i y o supply,
con olling cos s, and mee ing he deca boniza ion objec i es ag eed on a he EU
le el (Minis y o Na ional De elopmen 2012, 28–29). By con as , some opposi-
ion g oups p e e ed a mo e decen alized ene gy sys em based on enewable
sou ces o ene gy. Fo example, he Ene giaklub e e ed o Denma k, which by
2050 aims o achie e an ene gy sys em based o ally on enewables (MTI 2015).
The EU Commission also wa ned he Hunga ian go e nmen o how he policy o
main aining low egula ed p ices migh comp omise he p ospec s o imp o ing
ene gy e iciency (Can on e al. 2013).
Rosa om and MVM had o modi y some echnical and sa e y ea u es o he
Paks-2 NPP a e he publica ion o he EIA epo in 2015 (see MVM Paks II 2016),
which also e oked in e na ional c i icism ega ding he quali y o he documen-
a ion (Nuclea T anspa ency Wa ch 2015). The en i onmen al license g an ed
in Sep embe 2016 was upheld agains complain s in Ap il 2017. The Hunga ian
A omic Ene gy Au ho i y (HAEA) g an ed he si e and cons uc ion license in Ma ch
2017, which would enable building o s a on ime in 2018 (MVM Paks II 2016).
The HAEA is also esponsible o sa e y and was e issues. Unde he 1995 pol-
icy, spen uel is s o ed in pools a Paks o i e yea s and is hen ans e ed o an
in e im (50-yea ) d y s o age acili y. Fo he long-li ed in e media e-le el and
high-le el was es, a clays one o ma ion in he sou hwes has been in es iga ed.
The cons uc ion o a long- e m deposi o y has been ongoing since 2012 (WNA
2017) (Table 3).
Conclusion
Russia has an abundance o ene gy esou ces a ac ing in e es om a wide ange
o o eign go e nmen s and companies, enabling Russia o exe cise ac i e ene gy
diplomacy. We used he s uc u a ion app oach o sc u inize in mo e de ail how
Russian ac o s seek o ake ad an age o hei conside able asse s in he nuclea
ene gy sec o . Howe e , ou analysis s essed ha Russian nuclea ene gy diplo-
macy has o se e se e al in e es s simul aneously while accessing o eign ma ke s
in he a ge coun ies. In he cases o Finland and Hunga y, i aces he s uc u al
cons ain s ensuing om EU-le el policy and he na ional policy en i onmen s. Ou
app oach and esea ch ques ions ocused speci ically on his di icul “ i ” be ween
he in e es s o he Russian ac o s wi h he ea u es o he ele an policy en i-
onmen . Rega ding ou i s esea ch ques ion, each o he h ee in e es s we
pos ula ed is disce nible in he wo cases.
Rosa om pu sued i s join in e es wi h o he Russian ac o s in he ene gy busi-
ness and p o i s by o e ing a b oadly simila echnological solu ion o he Finnish
and Hunga ian con ac ing pa ies; ha is, he same eac o ype and ag eemen s

406 P. AALTO ET AL.
o he supply o nuclea uel and ela ed in as uc u e. To pu sue his business
in e es , Rosa om was a en i e o he case-speci ic cons ain s o he policy en i-
onmen in hese wo cases. S ulbe g (2007) ound he same also o be ue o
Rosa om’s conduc in Cen al Asia. In Finland and Hunga y, Rosa om and i s ne -
wo k supplied he echnology and in as uc u e on a u nkey basis. Howe e , in
Finland, Rosa om also sough u he p o i s by becoming a co-owne and ma ke
pa icipan in he Finnish elec ici y ma ke connec ed u he o No he n Eu ope.
In he Hunga ian case, whe e he O bán go e nmen is keen o main ain low
elec ici y p ices and whe e p o i s a e ha de o make, Rosa om limi s i sel o a
(po en ial) inancie and plan supplie ole. In bo h cases, a key asse o Rosa om
was i s o e o s a e-backed inance – in he Finnish case, i was decisi e o he
p ojec o con inue.
Russian in e es in he mode niza ion o i s economy and di e si ica ion o i s
expo s uc u e was also equally disce nible. Rosa om cul i a ed So ie -e a ech-
nological expe ise by o e ing a new e sion o a ied and es ed eac o design
ha was al eady o some ex en amilia o he Finnish and Hunga ian ac o s. This,
oo, cons i u ed an asse o Rosa om when compe ing designs su e ed om
echnological p oblems a si es anging om Japan’s Fukushima o Finland’s badly
Table 3. ealiza ion o ussian in e es s in he case o hunga y.
Resou ces, echnology,
and in as uc u e
Finance, business mod-
els, and ma ke s Ins i u ional Ecological
TVEL’s 20-yea exclusi e
nuclea uel supply
ag eemen wi h he
mVm o paks-2 cu by
10 yea s a e Eu a om
supply agency and
Eu opean commission
in e ened on g ounds
o enabling compe i ion
€12bln cos es ima e
including he supply o
nuclea uel; inancial
package consis ing o
ussian €10bln loan
o e , epayable by
2044 wi h hunga ian
inance o €2bln. an
imp o ed 100% inanc-
ing o e by ussia in
ea ly 2017
Fas - ack p ocedu e o
he ag eemen in he
pa liamen , c i icized
by he opposi ion o
lacking democ acy,
anspa ency, and ma -
ke o ecas s; Eu opean
commission enqui y on
g ounds o compe i ion
law; c i icism in he
Eu opean pa liamen
osa om and mVm
had o modi y pa s
o he echnical and
sa e y ea u es a e
he publica ion o he
en i onmen al impac
assessmen epo
niaEp-asE, a osa om
subsidia y, esponsible
o he enginee ing, p o-
cu emen and cons uc-
ion o wo 1200 mW
VVE aEs 1200 eac o s,
modeled on hunga y’s
exis ing eac o s
hea y s a e in ol emen
in he u nkey business
model. domes ic i ms
assu ed a 40% sha e
in he cons uc ion
p ocess o suppo he
eme gence o pe cep-
ions o “join in e es s”
in 2014 in e go e n-
men al ag eemen
o coope a ion on
nuclea ene gy wi h he
hunga ian go e nmen
was signed be o e he
uk aine c isis and he
sanc ions
in e na ional c i icism
o he quali y o doc-
umen a ion ega ding
sa e y issues
in as uc u e p o ision
se es he business
in e es s o osa om,
i s ne wo k, and he
ussian go e nmen ,
while sub-con ac ing
se es he wide ussian
mode niza ion and
di e si ica ion o expo s
in e es
osa om no o become
ma ke pa icipan
h ough he hunga ian
Go e nmen p omising
low p ices; opposi ion
suspicious o he p ice
p omises and ad e se
e ec s o de eloping
enewable ene gy
and s eng hening o
ussian p esence and
possible o eign policy
in e es s
osa om and he Go e n-
men o hunga y aced
accep abili y conce ns
on he pa o he
hunga ian opposi ion,
which also highligh ed
how he p ojec s migh
inad e en ly se e
ussian o eign policy
in e es s o he de i-
men o hunga y
hunga ian a omic Ene gy
au ho i y esponsible
o sa e y and was e
ma e s; sho - e m
and in e im s o age o
nuclea was e om paks
a ailable while con-
s uc ion o long- e m
deposi o y in p og ess
since 2012
EURASIAN GEOGRAPHY AND ECONOMICS 407
delayed i h NPP uni buil by A e a. Following a de elopmen alis economic
model (Low y 2016), he s a e-owned Rosa om backed by s a e unding and i s
ne wo k o e ed high echnology p oduc s and se ices, gene a ed sub-con ac -
ing o Russian companies, and hence helped o mode nize pa s o he Russian
economy and di e si y he expo po olio away om oil and gas.
The Russian s a e also u he ed i s o eign policy in e es s in bo h cases by
ein o cing an es ablished diploma ic ela ionship in he nuclea ene gy sec o and
ex ending i s li e o decades. These o eign policy gains a e aluable in con as
o he cons ain s in wide EU-Russia ene gy diplomacy, in pa icula sanc ions
in he oil sec o and con o e sies o e gas supplies. Al hough Russian o eign
policymake s commen ed a o ably on he Finnish and Hunga ian NPP p ojec s,
hey we e ca e ul no o di ec ly connec hese o o eign policy in luence. Ye such
po en ial in luence was disce ned in he commen a y by he Finnish Minis y o
Fo eign A ai s and g oups opposing he p ojec s in Finland and Hunga y. While
Russian nuclea ene gy diplomacy is-à- is Finland was conduc ed mos ly h ough
Rosa om and i s subsidia ies o a oid poli iciza ion, in he Hunga ian case i had a
mo e open s a e- o-s a e cha ac e in ol ing hese coun ies’ espec i e p esiden s
in a high-le el dialog.
The pu sui o Russian o eign policy in e es s also in ol es he use o so powe .
In Finland, pa ly s a e-owned companies and i ms wi h in e es s in Russia we e
pe suaded o en e he Hanhiki i-1 p ojec o each he 60% Finnish o EU-a ea
owne ship c i e ia se by he go e nmen . A e ini ial hesi a ions, he Finnish pa -
ies concluded join in e es s wi h Russian ac o s o be a s ake. In bo h coun ies,
Rosa om’s ne wo k was able o enhance such a pe cep ion by c ea ing subcon ac -
ing oles and jobs o local i ms. The o eign policy in e es s, howe e , emained
mo e sub le han in he case o Rosa om’s Akkuyu NPP p ojec in Tu key. This p o-
jec only egained i s momen um once Russia and Tu key esumed diploma ic
ela ions a e he impasse o e he downing o a Russian igh e je by Tu key in
2015, ollowing Tu key’s ailed mili a y coup and subsequen domes ic de elop-
men s in he summe o 2016 ha pushed Tu key u he owa d an ou side ole
in ela ion o he EU simila o ha o Russia.
Ou second esea ch ques ion conce ned he ex en o which Russian ac o s
could ealize hei in e es s in he wo cases. We ound Russian ac o s adep a
using hei conside able asse s on he dimension o esou ces, echnology, and
in as uc u e. Howe e , hei eco d o balancing he asse s and s uc u al con-
s ain s on he dimension o inance, business models, and ma ke s is mo e mixed.
In bo h cases Rosa om made an a ac i e inancing o e accompanied by a u n-
key business model. Ye , in he Finnish case i was poo ly in o med on he poli ical
necessi y o he 60% equi emen o domes ic o EU a ea owne ship. I de ended
he en y as a p ojec pa ne o a small C oa ian company ha he Finnish au ho -
i ies ul ima ely deemed a on o ganiza ion po en ially u ilizing Russian unding
om a s a e-owned ins i u ion in place o EU-a ea inancing.
408 P. AALTO ET AL.
In e ms o he ins i u ional dimension, in Finland Rosa om passed he i s
s ep equi ed by Finnish law ega dless o objec ions by he pa liamen a y oppo-
si ion. In Hunga y, Rosa om was s angely unawa e o how he EU-le el ma ke
egula ion hampe s he use o long- e m supply con ac s and had o wai o he
Commission o ule on whe he he planned inancial package was compa ible
wi h EU law on s a e aid. O e all, Rosa om and i s pa ne s encoun e ed ewe
cons ain s in Hunga y on he pa o he domes ic opposi ion han in Finland due
o he Hunga ian go e nmen e ec i ely supp essing dissen . This, o i s pa ,
made Hunga y a a ge o c i icism in he Eu opean Pa liamen .
On he ecological dimension, Rosa om emba ked on a lea ning p ocess o
imp o e i s expe ise by pa icipa ing in he discussion Fenno oima had wi h he
Finnish nuclea sa e y au ho i ies. In Hunga y Rosa om encoun e ed simila c i i-
cism on sa e y and c oss-bo de impac s as i did in Finland. Ye i bene i ed om
he campaign launched by he go e nmen in 2015 s essing he de-ca bonizing
ad an ages o he Paks-2 p ojec .
In summa y, we ind he hea ies cons ain s eme ging o Russian ac o s on
he ins i u ional dimension. This shows how he ene gy sec o has ea u ed mo e
egula ion, policy measu es, and sc u iny since he p edecesso o Rosa om con-
cluded he i s ag eemen s in Cold Wa Eu ope. A he same ime, he nuclea
ene gy diplomacy o Russian ac o s has managed o emo e some ins i u ional
cons ain s by skill ully p epa ing he g ound o he eme gence o join en u es
and o he in e es s. This has enabled Russian ac o s o use so powe o shape
pe cep ions in he a ge coun y. Al hough his in ol emen o Russian o eign
policy in e es s is milde and sub le han some wes e n obse e s ha e wa ned, i
is some hing Russia seeks when sanc ions and lowe p ices o oil and gas make any
gains ha de o come by elsewhe e han in he ield o nuclea ene gy diplomacy.
No es
1. Rosa om has examined he p ospec s o expanding i s ope a ions in Slo akia, while
Bulga ia is looking o e i e he Belene NPP p ojec whe e Rosa om was he supplie
be o e he ag eemen was canceled in 2012.
2. The nuclea ene gy sec o is no di ec ly subjec o he sanc ions as is o sho e and
A c ic oil; no Rosa om subsidia ies a e unde sanc ions as o Augus 2017. Howe e ,
he sanc ions in luence he nuclea ene gy ade and diplomacy indi ec ly. Access o
long- e m in e na ional inance and high-le el poli ical mee ing is es ic ed, including
a el and isa bans on some high- anking poli ical and business leade s (Aal o and
Fo sbe g 2016).
3. Fo example, in May 2017, he US Ai Fo ce used Finnish ai bases o NATO mili a y
exe cises while in June 2016, NATO oops conduc ed a landing d ill along he Finnish
coas line.
4. As wi h o he s a egic indus ies in Russia, some obse e s expec ha some o he
ac o s in he ne wo ks in ol ed seek pe sonal business bene i s since he owne ship
s uc u es lack anspa ency (see e.g. Tikkala 2016). Al hough such in o mal ne wo ks
may no be op imal o compe i ion, hey can be unc ional o uni ying s a e and
EURASIAN GEOGRAPHY AND ECONOMICS 409
business ac o s, helping hem o dis ibu e esou ces and ul ima ely, conduc business
(Ledene a 2013, 249–250).
5. The o icial English ansla ion was changed in 2015 om he Minis y o Employmen
and he Economy (MEE) o he Minis y o Economic A ai s and Employmen (MEAE).
6. Howe e , he maximum p ice o €50/MWh p omised o he owne s o Fenno oima
(Fenno oima 2013b) is much highe han he ac ual a e age p ices on he No d Pool
ma ke in he 2010s.
7. Compa ing he Hunga ian case o he ongoing B i ish Hinkley Poin p ojec , S ephen
Thomas o he Uni e si y o G eenwich es ima ed ha Paks would be buil essen ially
cheape han i s B i ish coun e pa : €5200 pe KWh agains Hinkley’s €7000 (Index
2015). The Russian loan would be bene icial o he Hunga ians: 3.95–4.95% compa ed
o he B i ish p ojec a 9.75–10.25%. Howe e , János Tó h Is án poin ed ou ha he e
is o en oom o co up ion as cos s o nuclea powe plan s seldom emain wi hin
hei budge s (2015).
Disclosu e s a emen
No po en ial con lic o in e es was epo ed by he au ho s.
Funding
This wo k was suppo ed by he Academy o Finland Cen e o Excellence on ‘Choices o
Russian Mode nisa ion’ (2012-17) and he S a egic Resea ch Council conso ium ‘T ansi ion o
a Resou ce E icien and Clima e Neu al Elec ici y Sys em (EL-TRAN) (2015-17)’ [g an numbe
293437].
ORCID
Pami Aal o h p://o cid.o g/0000-0003-1559-8175
Re e ences
Aal o, Pami, and Tuomas Fo sbe g. 2016. “The S uc u a ion o Russia’s Geo-Economy unde
Economic Sanc ions.” Asia Eu ope Jou nal 14: 221–237. doi:10.1007/s10308-015-0446-6.
Aal o, Pami, Da id Dusseaul , Ma kku Ki inen, and Michael D. Kennedy. 2012. “How a e Russian
ene gy policies o mula ed? Linking he ac o s and s uc u es o ene gy policy.” In Russia’s
Ene gy Policies: Na ional, In e egional and Global Le els, edi ed by P. Aal o. Chel enham: Edwa d
Elga , 20–44.
Acke mann, Raine . 2014. “Gas C isis: 2006, 2009…2015?.” The Budapes Times. July 18. Accessed
Janua y 9, 2016. h p://budapes imes-a chi .bz .hu/2014/07/18/gas-c isis-2006-2009-2015/
Akimo, Minna. 2017. “Fenno oiman u allisuuskul uu ia sel i ää ny myös VTT (Fenno oima’s
Sa e y Cul u e Now o Be Examined by VTT).” Kale a. Accessed July 6, 2017. h p://www.
kale a. i/uu ise / alous/ enno oiman- u allisuuskul uu ia-sel i aa-ny -myos- /752607/
Ámon, Ada, and And ás Deák. 2015. “Hunga y and Russia in Economic Te ms – Lo e, Business,
Bo h o Nei he ?” Accessed Janua y 9, 2016. h p:// eal.m ak.hu/33228/1/Amon_Deak_
Hunga y_and_Russia.._u.pd
416 P. AALTO ET AL.
Sunell, Milka. 2004. “Suomalainen Ydin oimapoikkeus [The Finnish Nuclea Excep ion].” In
Ydin oima, al a ja as a in a [Nuclea Powe , Powe and Resis ance], edi ed by Ma i Kojo,
179–207. Helsinki: Like.
Sy jämäki, Eija, Ma i Kojo, and Tapio Li manen. 2015. “Muu unu hanke: Fenno oiman
ydin oimalahankkeen YVA-yleisö ilaisuude Pyhäjoella uosina 2013-2014 [The Changed
P ojec : The Public Mee ings o EIA ega ding he Fenno oima Nuclea Powe Plan in Pyhäjoki
in 2013–2014).” YFI julkaisuja 2, Jy äskylän yliopis o, Jy äskylä. Accessed Janua y 29, 2016.
h p://u n. i/URN:ISBN:978-951-39-6246-3
Talus, Kim. 2013. EU Ene gy Law and Policy: A C i ical Accoun . Ox o d: Ox o d Uni e si y P ess.
Than, K isz ina. 2015. “Special Repo : Inside Hunga y’s $10.8 Billion Nuclea Deal wi h Russia.”
Reu e s. Ma ch 30. Accessed Ap il 21, 2016. h p://www. eu e s.com/a icle/us- ussia-eu ope-
hunga y-special epo -idUSKBN0MQ0MP20150330
The Council o S a e. 2014. “M 6/2014 p Val ioneu os on pe iaa epää ös 18. päi änä syyskuu a
2014 ydin oimalai oksen aken amises a [The Decision in P inciple by he Council o S a e on
18 Sep embe 2014 on Building he Nuclea Powe Plan ].” Accessed Augus 17, 2016. h ps://
www.eduskun a. i/FI/ aski/Documen s/m_6±2014.pd
Tibo , Nagy A ila. 2014. “Paks II a pa lamen ben [Paks II in he Pa liamen ].” Mel ányosság poli ika
elemzö közpon . Accessed Janua y 12, 2016. h p://mel anyossag.hu/con en / iles/Paks%20
II.%20a%20pa lamen ben.pd
Tikkala, Hannu. 2016. “Mi en Sosno yi Bo in kuninkaas a uli Fenno oiman pääu akoi sija?
Taus alla ää inkäy ösepäilyjä ja maksu aikeuksia [How Did he King o Sosno yi Bo Became
he Main Con ac o o Fenno oima? In he Backg ound Suspicions o Co up ion and
Financial Di icul ies].” Yle. Ap il 10. Accessed Ap il 10, 2016. h ps://yle. i/uu ise /3-8779301
Tilas okeskus. 2016. “Tilas o : Ene gia: Tilas okeskuksen PX-Web- ie okanna [S a is ics: Ene gy:
PX-Web Da abases o S a is ics Finland].” Accessed Augus 26, 2016. h p://pxne 2.s a . i/
PXWeb/pxweb/ i/S a Fin/S a Fin__ene__ehk/? ablelis = ue& xid=e59 a7e6- ca4-4a42-
bcdd-5c 70868c1d8
Ti an-2. 2015. “The B idge o F iendship.” Accessed Augus 12, 2017. h p://www. i an2. u/en/
media-p ess/len a-no os ej/358- he-b idge-o - iendship
Ti an-2. 2016. “TITAN-2 in Hanhiki i 1 NPP P ojec ’, P esen a ion, 25.8.2016.” Accessed June 9,
2017. h ps://www.lisaakauppaa. i/ ile/download& ile_id=187/
Toi onen, Janne. 2016. “S uk: Fenno oiman yön ekijöi ä on painos e u ja sa us e u ulos
– Vaiku aako ydin u allisuu een? [(S uk: Fenno oima S a Has Been Pu unde P essu e
and Fo ced ou – Impac s on Nuclea Sa e y?].” Yle. Augus 15. Accessed Augus 17, 2016.
h p://yle. i/uu ise /s uk_ enno oiman_ yon ekijoi a_on_painos e u_ja_sa us e u_ulos__
aiku aako_ydin u allisuu een/9095824? e =leiki-uup
Vehkaoja, Mikael. 2014. “Seu an gallup: Kansa o aisi Fenno oimas a aikalisän [Opinion Poll by
Seu a: Ci izens Would like o Call o a Suspension o Fenno oima].” Seu a. Augus 27. Accessed
Augus 17, 2016. h p://seu a. i/puheenaihe/seu an-gallup-kansa-o aisi- enno oimas a-
aikalisan/
Vlček, Tomas. 2016. “C i ical Assessmen o Di e si ica ion o Nuclea Fuel o he Ope a ing VVER
Reac o s in he EU.” Ene gy S a egy Re iews 13-14 (14): 77–85.
WNA (Wo ld Nuclea Associa ion). 2015. “Nuclea Powe in Russia.” Wo ld Nuclea Associa ion.
Accessed Augus 19, 2015. h p://www.wo ld-nuclea .o g/in o/Coun y-P o iles/Coun ies-
O-S/Russia–Nuclea -Powe /
WNA (Wo ld Nuclea Associa ion). 2016. “Nuclea Powe in he Eu opean Union.” Wo ld Nuclea
Associa ion. Accessed Oc obe 8, 2016. h p://www.wo ld-nuclea .o g/in o ma ion-lib a y/
coun y-p o iles/o he s/eu opean-union.aspx

EURASIAN GEOGRAPHY AND ECONOMICS 417
WNA (Wo ld Nuclea Associa ion). 2017. “Nuclea Powe in Hunga y.” Accessed June 2, 2017.
h p://www.wo ld-nuclea .o g/in o ma ion-lib a y/coun y-p o iles/coun ies-g-n/hunga y.
aspx
WNN (Wo ld Nuclea News). 2014. “Rosa om G oups Enginee ing Expe ise.” Wo ld Nuclea
News. Accessed Ap il 18, 2016. h p://www.wo ld-nuclea -news.o g/C-Rosa om-g oups-
enginee ing-di ision-22101401.h ml
Tass. 2014. “Finland Does No Plan o Gi e up Cons uc ion o Nuclea Plan in Conjunc ion wi h
Rosa om.” Russian News Agency. Accessed Ap il 26, 2016. h p:// ass. u/en/economy/749548
Ylönen, Ma ja, Tapio Li manen, Ma i Kojo, and Pi i a Lindell. 2015. “(De)Poli icisa ion o Nuclea
Powe : The Finnish Discussion a e Fukushima.” Public Unde s anding o Science 26: 260–274.
doi:10.1177/0963662515613678.