World Bank Ends Nuclear Energy Ban to Meet Power Demand

The World Bank has reversed its longstanding policy against nuclear energy financing, announcing it will now support nuclear projects for the first time in decades as part of a broader strategy to meet soaring electricity demands in developing countries.

In a message to staff on Wednesday, World Bank President Ajay Banga confirmed that the institution would re-engage with nuclear energy, citing the need for massive investment in electricity generation, grids, and storage. Banga highlighted that demand for electricity in developing nations is projected to more than double by 2035.

“To meet this need, annual energy investment must rise from $280 billion to roughly $630 billion,” Banga stated, adding that the World Bank will work closely with the United Nations’ nuclear watchdog, the International Atomic Energy Agency (IAEA), to enhance its expertise in nuclear safety and non-proliferation measures.

The World Bank will now support efforts to extend the operational life of existing reactors in countries where they are already in use, and assist in modernising power grids and infrastructure. It also plans to help accelerate the development of Small Modular Reactors (SMRs), a newer nuclear technology seen as more adaptable and potentially more accessible to smaller economies.

Appointed in 2023, Banga has been a driving force behind changes to the bank’s energy policy. His announcement comes just a day after a World Bank board meeting. “Our goal is to help countries secure the energy their people need, while allowing them to choose the solutions best aligned with their development goals,” he said.

The bank’s renewed interest in nuclear energy comes amid wider discussions about balancing energy security with climate targets. In addition to supporting nuclear projects, Banga said the bank will continue to back initiatives to decommission or repurpose coal-fired plants, as well as invest in carbon capture for industrial and power sectors.

The move follows months of pressure from shareholders, notably the United States — the bank’s largest stakeholder — which has been urging the institution to reconsider its restrictions on nuclear energy. In April, US Treasury Secretary Scott Bessent said the World Bank should focus on dependable, scalable technologies to help emerging economies expand energy access, rather than adhere strictly to climate finance commitments.

Bessent suggested this could include gas and other fossil fuel-based energy, and welcomed the bank’s openness to lifting its nuclear energy ban.

However, while the bank has now made its position on nuclear clear, Banga noted that its board has yet to reach consensus on whether or under what conditions it should finance upstream gas projects. Discussions on that issue remain ongoing.

With this policy shift, the World Bank appears to be signalling a more pragmatic approach to energy development, one that prioritises flexibility and access over rigid adherence to past restrictions.

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