World Bank Lifts Nuclear Funding Ban amid Power Demand Surge
TEHRAN (Tasnim) – The World Bank has ended its ban on financing nuclear energy projects in developing countries, as part of a broader shift to meet soaring electricity demands.
World Bank President Ajay Banga announced the policy change in an email to staff after a board meeting on Tuesday.
The board supported lifting the ban on nuclear projects but remains divided on backing upstream natural gas investments.
Banga said discussions on natural gas are ongoing, noting the complexity of the issue.
“We've made real progress toward a clear path forward on delivering electricity as a driver of development,” he said.
The World Bank had halted nuclear funding in 2013 and upstream oil and gas projects starting in 2019, although it continued supporting gas in the poorest countries.
The new policy shift comes as demand for electricity in developing countries is projected to more than double by 2035.
Meeting that need would require over twice the current $280 billion annual investment in generation, grids and storage.
The United States, the bank’s largest shareholder, has long pushed to end the nuclear ban.
US President Donald Trump, who exited the Paris Agreement early in his term, has supported a broader energy policy for developing nations.
Twenty-eight countries currently use nuclear power, with 10 more preparing to start and another 10 possibly ready by 2030, according to the Energy for Growth Hub and Third Way.
The World Bank plans to coordinate with the International Atomic Energy Agency on safety, security, and regulatory frameworks.
It will also support extending the life of existing reactors, improving grids, and exploring small modular reactors.
However, upstream gas remains a contentious issue.
Germany, France, and Britain have not backed a full policy reversal, according to sources familiar with the talks.
Trump administration officials and some experts argue that developing countries should access affordable energy options, as wealthier nations still use fossil fuels.
Climate advocates warn that new nuclear and gas projects could undermine climate goals and divert resources from renewable energy.
Barbados Prime Minister Mia Mottley said, “Net zero does not mean fossil fuel free. It means, still, that there will be 20% energy coming from fossil fuels. We know natural gas is that clean fuel.”
Banga said the new strategy gives countries flexibility in choosing energy sources—solar, wind, geothermal, hydro, natural gas, or nuclear—based on national needs.
The bank will continue to fund midstream and downstream gas projects where they are the most cost-effective and consistent with development and climate goals.
It also plans to assess emerging technologies like carbon capture and ocean energy, aiming to streamline review and approval processes.
Coal plant retirements will still be supported, including carbon capture for industry and power generation, but not for enhanced oil recovery.
