Hungary’s plans to finance the construction of two nuclear reactors will be investigated.

The European Commission has opened an in-depth state aid investigation into the project called Paks II.

It will analyse if a private investor would have financed the nuclear project on the same terms as Hungary’s state aid.

If the project is found to involve state aid, the Commission will investigate if it would lead to distortions of competition in the Hungarian energy market.

In May 2015, the Hungarian authorities notified plans to invest in the construction of two nuclear reactors at the Paks site.

The Commission stated it has concerns this investment “may not be on market terms”.

Under the EU Treaty, Member States are free to determine their energy mix. The Commission’s role is to ensure that when public funds are used to support companies, this is done in line with EU state aid rules, which aim to preserve competition in the Single Market, it added.

Margrethe Vestager, Commissioner in charge of competition policy said: “Given the size and importance of the Paks project, the Commission has to carefully assess whether Hungary’s investment is indeed on market terms or whether it involves state aid. This requires a complex analysis. I think it is important that stakeholders can also submit their views.”

The UK Government is investing £2 billion in Hinkley Point C nuclear plant.