World Bank Embraces Nuclear Energy After Decades

The World Bank is stepping back into nuclear energy financing for the first time in decades, signaling a bold move to help developing nations meet rapidly growing electricity demands.

World Bank President Ajay Banga confirmed the decision in an internal email to staff on Wednesday, emphasizing the urgent need for diverse energy solutions as global energy consumption is projected to soar.

The pivot comes as developing countries face a dramatic surge in electricity demand, expected to more than double by 2035. To keep pace, annual investments in energy generation, grids, and storage will need to jump from $280 billion to approximately $630 billion.

Recognizing this challenge, Banga stated that the World Bank would collaborate closely with the International Atomic Energy Agency (IAEA) to reinforce nuclear safety standards, non-proliferation safeguards, and regulatory frameworks.

“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,” he wrote.

One major focus will be the development and deployment of Small Modular Reactors (SMRs) — a newer, more flexible form of nuclear technology that has the potential to be scaled and adapted for use in a wider range of countries. These reactors are seen as a promising alternative for nations that may not have the capacity or infrastructure to support large-scale nuclear plants.

Since taking the helm of the Washington-based development lender in 2023, Banga has been pushing to modernize the World Bank’s energy policy to better align with the realities of climate change, rising demand, and global development needs.

His memo, issued a day after a key board meeting, outlines a broader energy strategy that also includes continued financing for retiring or repurposing coal plants, improving electricity grid performance, and supporting carbon capture initiatives in both industrial and power generation sectors.

While the move into nuclear marks a significant policy evolution, Banga acknowledged that discussions are still ongoing regarding the bank’s role in “upstream gas” investments — particularly under what conditions, if any, such projects should be supported.

The United States, as the World Bank’s largest shareholder, has been vocal in encouraging the institution to reconsider its longstanding opposition to nuclear energy financing. With this new direction, the World Bank appears to be aligning with a more pragmatic and diversified approach to global energy development — one that balances environmental concerns with the pressing need to expand reliable energy access across the developing world.

This re-engagement with nuclear energy reflects a broader recognition that clean, scalable power solutions — including advanced nuclear — will be essential in achieving global development goals and combating energy poverty in a warming world.