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World Bank Lifts Decades-Old Ban On Nuclear Energy Funding To Meet Rising Power Demands
June 12, 2025
10:57
The World Bank has ended its decades-long prohibition on financing nuclear energy projects, marking a significant policy shift as it seeks to address the surging electricity demands of developing nations.
In a memo to staff on Wednesday, World Bank President Ajay Banga announced that the institution will “for the first time in decades” support nuclear energy initiatives. The decision aligns with projections that electricity needs in emerging economies will more than double by 2035.
“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 stated in the memo, which was reviewed by Agence France-Presse (AFP).
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The World Bank will collaborate closely with the International Atomic Energy Agency (IAEA), the UN’s nuclear watchdog, to bolster regulatory frameworks and non-proliferation safeguards.
“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 emphasized.
To meet escalating energy demands, annual investments in power generation, grid infrastructure, and storage must rise from $280 billion to approximately $630 billion, according to the bank’s estimates.
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The Washington-based lender also plans to accelerate the development of Small Modular Reactors (SMRs), which could offer a scalable and cost-effective solution for nations transitioning to cleaner energy. At the same time, the bank will continue financing the retirement or repurposing of coal-fired plants and support carbon capture technologies for industrial and power generation use.
The policy shift follows pressure from the United States, the World Bank’s largest shareholder, which has advocated for ending restrictions on nuclear energy funding.
During the IMF and World Bank’s spring meetings in April, U.S. Treasury Secretary Scott Bessent urged the institutions to prioritize “dependable technologies” over “distortionary climate finance targets,” suggesting investments in gas and other fossil fuel-based energy where necessary.
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Bessent praised the bank’s move to lift nuclear financing restrictions, signaling broader support for flexible energy solutions.
While the nuclear financing ban has been lifted, Banga noted that the World Bank’s board has yet to reach a consensus on whether to support upstream gas projects—a contentious issue among member nations. The decision underscores the bank’s evolving strategy to balance climate goals with the urgent energy needs of developing economies.
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