Dr Kgaugelo Chiloane, PhD retweetledi
The Funding of Nuclear Power Plants
On June 11, 2025, the World Bank announced a historic policy shift, lifting its decades-long ban on funding nuclear power projects, a decision formalised in 2013 but effectively in place since the last nuclear project was funded in 1959 in Italy.
This reversal, driven by the bank’s board and supported by its largest shareholder, the United States, aims to address the surging electricity demands of developing countries while reducing reliance on planet-warming fossil fuels like coal and oil.
The decision comes amid growing global support for nuclear energy, highlighted by over 20 countries, including the U.S., Canada, France, and Ghana, pledging to triple nuclear capacity by 2050 at a UN climate conference.
The policy change is seen as a strategic move to bolster U.S. competitiveness in next-generation reactor technology and modular reactors and to counter the dominance of Russia and China in nuclear financing for developing nations. World Bank President Ajay Banga emphasised a balanced energy strategy, continuing support for renewables and gas infrastructure while enabling nuclear as a clean, reliable option. Critics, including Germany, had previously opposed nuclear funding due to safety concerns in less experienced countries. Still, even cautious groups like the Union of Concerned Scientists now acknowledge nuclear’s value in combating climate change.
Implications for Developing Countries:
Energy Access and Industrialization: The lifting of the ban could transform energy access for over 3 billion people in developing nations, particularly in Africa, Asia, and the Middle East, where electricity demand is projected to double by 2050. Nuclear power offers a stable, high-capacity energy source, enabling industrialisation without the heavy carbon footprint of coal, which countries like Vietnam and Indonesia heavily rely on. This could accelerate economic growth and poverty reduction.
Climate Change Mitigation: By financing nuclear projects, the World Bank supports a low-carbon energy alternative, aligning with global climate goals like the Paris Agreement. Developing countries can transition away from fossil fuels, reducing greenhouse gas emissions and contributing to global efforts to limit warming, disproportionately affecting poorer nations through climate-related disasters.
Geopolitical Shifts: The policy opens doors for U.S. and allied nuclear technologies, reducing dependence on Russian and Chinese financing, which currently dominate nuclear markets in developing countries. This could enhance energy security and foster partnerships with Western nations, though it may also intensify geopolitical competition.
Challenges and Risks: Implementing nuclear power in developing countries with limited technical expertise poses safety and regulatory challenges. The World Bank must ensure robust oversight and support for modern, safer technologies like small modular reactors. Additionally, the high upfront costs of nuclear projects may strain budgets, requiring innovative financing models.
Broader Energy Strategy: The World Bank’s continued support for renewables and natural gas alongside nuclear allows countries to tailor energy mixes to their needs. This flexibility could accelerate the phase-out of coal while addressing immediate energy access gaps, particularly in regions like Southeast Asia. However, debates persist about the role of gas as a transitional fuel.
In conclusion, the World Bank’s decision to fund nuclear power projects is a game-changer for developing countries, offering a path to sustainable industrialisation and climate resilience. However, success hinges on overcoming technical, financial, and geopolitical hurdles to ensure safe and equitable energy development.
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