By Andrea Shalal
WASHINGTON (Reuters) -The World Bank’s board has agreed to end a longstanding ban on funding nuclear energy projects in developing countries as part of a broader push to meet rising electricity needs, the bank’s president Ajay Banga said on Wednesday.
Banga outlined the bank’s revised energy strategy in an email to staff after what he called a constructive discussion with the board on Tuesday. He said the board was not yet in agreement on whether the bank should engage in upstream natural gas projects, and if so, under what circumstances.
The global development bank, which lends at low rates to help countries build everything from flood barriers to railroads, announced in 2017 it would stop funding upstream oil and gas projects beginning in 2019, although it would still consider gas projects in the poorest countries. It decided in 2013 to stop funding nuclear power projects.
“While the issues are complex, we’ve made real progress toward a clear path forward on delivering electricity as a driver of development,” he said, adding that further discussion was required on the issue of upstream gas projects.
Banga has championed a shift in the bank’s energy policy since taking office in June 2023, arguing the bank should pursue an “all of the above” approach to help countries meet rising electricity needs and advance development goals.
In his memo, he noted that electricity demand was expected to more than double in developing countries by 2035, which would require more than doubling today’s annual investment of $280 billion in generation, grids and storage.
The Trump administration has been pushing hard for ending the ban on nuclear energy projects since taking office.
The U.S. is the bank’s single largest shareholder – at 15.83%, followed by Japan with 7% and China with close to 6% – and the bank’s decision to broaden its approach to energy projects will likely please President Donald Trump, who withdrew the U.S. from the Paris Climate Agreement and its emission-reduction targets as one of his first acts in January.
Twenty-eight countries already use commercial nuclear power, with 10 more ready to start and another 10 potentially ready by 2030, according to the Energy for Growth Hub and Third Way.
Banga said the bank’s revised strategy would allow countries to determine the best energy mix, with some choosing to invest in solar, wind, geothermal or hydroelectric power, while others might opt for natural gas or, over time, nuclear.
He said the bank would continue to advise on and finance midstream and downstream natural gas projects when they represented the least-cost option, aligned with development plans, minimized risk and did not constrain renewables.
In nuclear energy, he said the World Bank Group would work closely with the International Atomic Energy Agency to strengthen its ability to advise on non-proliferation safeguards, safety, security and regulatory frameworks.
The bank would support efforts to extend the life of existing nuclear reactors in countries that already had them, along with grid upgrades. It would also work to accelerate the potential of small modular reactors so they could become a viable option for more countries over time.
(Reporting by Andrea Shalal; additional reporting by Valerie Volcovici; Editing by Nia Williams)
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