Author: PPD Team Date: 13/06/2025
The World Bank has ended its 2013 ban on financing nuclear energy projects in developing countries. The decision, reported by Reuters, reflects a shift in response to rising electricity demand and a push for energy diversification.
Under the new strategy, the Bank will support countries in developing nuclear power, including life-extension of existing reactors and small modular reactor (SMR) deployment. The World Bank Group will work with the International Atomic Energy Agency (IAEA) on safeguards, safety, and regulatory frameworks.
The change aligns with World Bank President Ajay Banga’s “all of the above” energy strategy. Since his appointment in June 2023, Banga has pushed for an inclusive energy mix to support development goals. The World Bank estimates electricity demand in developing countries will double by 2035. This will require a major increase in annual investments in generation, transmission, and storage, up from the current US$280 billion.
The United States, the Bank’s largest shareholder, has long advocated lifting the nuclear funding ban. The move is expected to be welcomed by the current US administration. In March 2025, the US Department of Energy disbursed US$56.7 million from a larger US$1.52 billion loan to support the restart of the 800 MW Palisades nuclear plant in Michigan.
While the nuclear funding pivot was approved quickly, debates continue around World Bank support for upstream natural gas projects. Some member countries have expressed concern, calling for further consultation.
Critics from the climate community argue that nuclear and gas funding could reduce focus on renewables and climate adaptation. However, the Bank has reiterated its support for retiring coal assets, financing carbon capture (excluding enhanced oil recovery), and expanding renewables.
Power Peak Digest’s analysis: The World Bank’s nuclear financing shift is a strategic geopolitical move to reduce the influence of China and Russia in developing countries’ energy systems. Both nations have aggressively promoted their nuclear technologies abroad. By enabling access to alternative financing, the Bank strengthens Western alignment and offers low-carbon power solutions to countries with growing energy demand.