Washington D.C., USA – The World Bank is re-engaging with nuclear energy financing “for the first time in decades,” its President Ajay Banga announced on Wednesday. This strategic shift is aimed at addressing the burgeoning electricity demand in developing nations, a critical component of their growth trajectories.
In an internal email to staff, Banga stated that the institution will collaborate closely with the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog. This partnership is designed to “strengthen our ability to advise on non-proliferation safeguards” and robust regulatory frameworks, ensuring responsible development.
The decision comes as projections indicate that electricity demand in developing countries is set to more than double by 2035, according to Banga’s memo, which was seen by AFP. To adequately meet this projected need, annual investment in energy generation, grids, and storage will require a substantial increase, from the current $280 billion to approximately $630 billion.
“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,” Banga detailed in his communication. The Washington-based lender also intends to accelerate the development of “Small Modular Reactors” (SMRs), aiming to make these advanced nuclear technologies a viable option for a wider array of countries in the future.
Banga, who assumed leadership of the development lender in 2023, has been a proponent of revising the bank’s energy policy. His announcement follows a board meeting held just a day prior. “The goal is to help countries deliver the energy their people need, while giving them the flexibility to choose the path that best fits their development ambitions,” Banga affirmed.
Beyond the renewed focus on nuclear power and grid performance, Banga indicated that the World Bank would continue financing the decommissioning or repurposing of coal plants and supporting carbon capture technologies for industrial and power generation sectors.
In April, during the International Monetary Fund and World Bank’s spring meetings, U.S. Treasury Secretary Scott Bessent had advocated for the bank to more efficiently utilize its resources in boosting energy access for emerging economies. Bessent emphasized a focus on “dependable technologies” rather than pursuing “distortionary climate finance targets,” a stance that could potentially include investments in gas and other fossil fuel-based energy production. He had also previously lauded the bank’s efforts to remove restrictions on supporting nuclear energy projects. The United States, as the World Bank’s largest shareholder, has been among the nations campaigning for the institution to reconsider its previous stance on nuclear financing.
Banga concluded by noting that while the bank is moving forward with nuclear energy, it has yet to reach a board-level agreement on whether it should “engage in upstream gas” and under what specific circumstances such engagement would occur.
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