Chancellor Angela Merkel discussed major German investments including involvement in a Russian-built nuclear plant during her visit to Hungary, despite allegations that Prime Minister Viktor Orban has suppressed democracy, local media reported Tuesday.

According to Hungarian online news portal vs.hu, citing Hungarian government and German business sources, German engineering giant Siemens will join the Paks nuclear plant expansion project.

The controversial 12.5-billion-euro ($14.1-billion) deal, agreed by Orban and Russian President Vladimir Putin last year, will see Russia expand ex-communist Hungary's sole nuclear power plant, largely financed by loans from Moscow.

A diplomatic source, who wanted to remain anonymous because of the sensitivity of the issue, confirmed to AFP that Siemens' participation in the nuclear plant has been discussed for months.

"It counterweighs the Russians and keeps the Germans happy," the source told AFP. Orban's chief of staff Janos Lazar had said in December that Budapest was looking to bring in non-Russian partners on the project.

Other major investment deals between Merkel and Orban included automaker BMW opening a new car plant and Franco-German Airbus supplying some 30 helicopters for the Hungarian military.

German power company RWE has reportedly also agreed on a deal for Hungarian ownership in a power plant that the firm majority-owns to increase from the current 26 percent to 50 percent, the report said.

A spokesman for the Hungarian government declined to comment.