The World Bank’s board has agreed to end a longstanding ban on funding nuclear energy projects in developing countries as part of a broader push to meet rising electricity needs, according to World Bank President Ajay Banga. The Bank stopped funding nuclear power projects in 2013. To date, the World Bank’s only loan for new nuclear capacity was $40m in 1959 for Italy’s NPP.
The 2011 Fukushima Daiichi accident resulted in the World Bank imposing a de facto ban on nuclear funding. This was then formalised in 2013. The policy reversal followed similar decisions on nuclear energy, including the Declaration to Triple Nuclear Energy signed by 22 countries in December 2023, as well as recent decisions by the European Investment Bank, Germany, and Canada to boost nuclear power.
Banga said in an email to staff that, for the first time in decades, the World Bank Group “will begin to re-enter the nuclear energy space”. In partnership with the International Atomic Energy Agency (IAEA) and others “we will support efforts to extend the life of existing reactors in countries that already have them and help support grid upgrades and related infrastructure. We will also work to accelerate the potential of small modular reactors – so they can become a viable option for more countries over time”.
Some countries “may choose to invest in solar, wind, geothermal, or hydro where those make the most sense”, the email noted. “In a number of others, the best path forward may include natural gas – or, over time, nuclear”.
Banga has championed a shift in the bank’s energy policy since taking office in June 2023, arguing the bank should pursue an “all of the above” approach to help countries meet rising electricity needs and advance development goals. The email said electricity demand was expected to more than double in developing countries by 2035, which would require today’s annual investment of $280bn in generation, grids and storage to be almost doubled.
US President Donald Trump has been pushing hard to end the ban on nuclear energy projects since taking office. The US is the Bank’s single largest shareholder (15.83%), followed by Japan (7%) and China (6%). Trump withdrew the US from the Paris Climate Agreement and its emission-reduction targets as one of his first acts in January.
Banga said the bank would continue advising on and financing the retirement of coal plants, supporting carbon capture for industry and power generation, but not for enhanced oil recovery, which can secure commercial financing.
NEA Director-General William D Magwood IV welcomed the decision. “The World Bank plays an essential role in assuring that nuclear energy is accessible to all regions of the world,” he said. “We are actively supporting the bank’s efforts to rebuild their nuclear energy expertise. The growing working relationship between our two institutions will be a key element in supporting all countries’ efforts to finance nuclear energy projects that can contribute to energy security and economic growth.”
