The World Bank has made a landmark decision by lifting its long-standing ban on financing nuclear energy projects in developing nations. Announced by President Ajay Banga after a constructive board session, the move is part of a broader strategy to help countries cope with surging electricity demand. While board members showed strong support for reviving nuclear financing, they remain undecided on funding upstream natural gas hookups and infrastructure.
Banga laid out his new strategy in a memo to staff following Tuesday’s board meeting. He pointed out that electricity demand in developing countries is set to more than double by 2035, and current investments—about 280 billion dollars annually—need to increase proportionally. The World Bank had halted nuclear power lending in 2013 and phased out upstream oil and gas funding by 2019, though poor nations could still receive support for gas projects. The board’s decision restores funding for nuclear power, including extending reactor lifespans, upgrading grids, and accelerating the deployment of small modular reactors, while pledging to partner with the International Atomic Energy Agency to safeguard against proliferation and ensure safety and regulation standards.
The decision reflects Banga’s “all of the above” approach to energy, a strategy he championed after taking office in June 2023. He believes developing nations must have the freedom to choose the energy mix that makes sense for them. That could mean solar and wind in some countries, natural gas in others, and nuclear in those needing high baseload power.
Balancing Climate Goals and Energy Access
Not everyone is on board. Several European nations, including Germany, France and Britain, remain wary of lifting the ban on gas projects. They fear it could divert essential funds away from renewable energy and climate adaptation efforts, which remain urgent in vulnerable nations. Meanwhile, other development specialists and U.S. officials argue that countries should have access to dependable and affordable power—even if it comes from nuclear or natural gas—just as Western countries continue consuming fossil fuels.
Barbados Prime Minister Mia Mottley weighed in, noting that low carbon energy may still include 20 percent from fossil sources. She called natural gas a clean transitionary fuel. Banga echoed that sentiment in his memo, stating countries should determine their own energy path, which could include a blend of solar, wind, geothermal, hydro, gas or nuclear. The bank will continue advising projects that blend economic value with sustainability while studying new technologies like carbon capture and marine power.
Critics argue the shift may water down the bank’s climate mission if fossil fuels return as priority funding recipients. But the bank aims to balance this by maintaining coal plant retirements, backing carbon capture—except for projects that support oil recovery—and simplifying approvals to speed up clean energy deployment.
