U.S.-Hungary civil nuclear pact accelerates shift away from Russian fuel

The U.S. and Hungary formalized a civil nuclear cooperation deal on Feb. 16, 2026, that commits Budapest to buy American nuclear fuel and brings U.S. companies into Hungarian spent-fuel management, marking a deliberate move away from long-standing Russian fuel and service relationships. The memorandum builds on negotiations that began with a November 2025 MoU and names private-sector participants for technical work: U.S. suppliers are expected to provide fresh fuel and Holtec International will assist with spent-fuel solutions at a plant that supplies roughly half of Hungary’s electricity.

Beyond immediate procurement commitments, the agreement explicitly promotes Hungary as a regional node for small modular reactor (SMR) deployment, opening a pathway for U.S. SMR designs, licensing cooperation and industrial partnerships across Central Europe. That is strategically significant: if Hungarian authorities follow through with licensing and project selection, U.S. firms could gain long-term market share in a region where Russian VVER technology has been dominant.

However, implementation will require a sustained, multi-year effort. Integrating non‑Russian fuel into reactors originally designed around VVER specifications will demand compatibility testing, regulatory approvals and likely physical modifications. Spent-fuel handling under Western technical norms similarly requires construction of new facilities, trained personnel and strict oversight.

Financing is a central unresolved issue. The deal does not specify how major modernization, SMR pilot projects or spent-fuel infrastructure will be funded: options include export credit, direct investment, commercial loans or a mix of instruments. Those choices will affect project timelines, cost allocation and the degree of commercial versus political leverage wielded by external partners.

Institutional and grid preparations also matter: Hungarian regulators will face accelerated workloads to certify new fuel types and SMR designs, while grid upgrades and workforce training will be necessary to integrate different reactor classes safely and economically. Public acceptance and parliamentary oversight—particularly with elections on April 12, 2026—will shape the political durability of long-term contracts and procurement plans.

Politically, the pact is a diplomatic win for Washington and for Prime Minister Viktor Orbán’s government, strengthening bilateral ties at a sensitive moment ahead of Hungary’s vote. For Brussels and NATO partners, the agreement is double-edged: it reduces reliance on a single foreign supplier yet deepens a bilateral relationship with a government that has drawn criticism over democratic norms.

Economically, U.S. companies stand to win supply contracts for fuel, SMR components and spent-fuel services; for Budapest, the pact offers a narrative of diversifying away from Russian dependence. But whether those commercial opportunities materialize will depend on concrete procurement awards, financing arrangements and successful regulatory adaptation.

Practically, expect phased milestones: initial U.S. fuel deliveries subject to compatibility tests, regulatory approvals for non-Russian fuel use in VVER-style units, selection of pilot SMR projects and staged construction of spent-fuel facilities. Each step carries technical, contractual and budgetary risk that could slow or reshape the original intent.

This agreement fits within a broader U.S. strategy of using legal and commercial frameworks to open markets that were previously closed or dominated by other suppliers. The headline pact creates options and competition, but conversion from a diplomatic framework into operational infrastructure will be the real test.

• Agreement signed: Feb. 16, 2026.
• MoU negotiations launched: November 2025.
• Hungarian election date: April 12, 2026.
• Paks plant share of national electricity: approximately 50%.