The World Bank has re-entered the nuclear energy sector “for the first time in decades,” its President, Ajay Banga, announced on Wednesday, as the institution seeks to help developing nations meet soaring electricity demand.
In an internal email, Banga confirmed that the bank will collaborate closely with the United Nations’ nuclear watchdog, the International Atomic Energy Agency (IAEA), to bolster guidance on non-proliferation safeguards and regulatory frameworks.
This decision follows projections that electricity demand in developing countries will more than double by 2035. To meet this surge, Banga noted, annual investment in energy generation, storage, and grid systems must rise from $280 billion to $630 billion.
“We will help extend the lifespan of existing nuclear reactors in countries that already use them and support infrastructure upgrades,” Banga said. He added that the bank would also accelerate efforts to advance Small Modular Reactors (SMRs) to make them a practical option for more nations in the future.
Since assuming leadership of the World Bank in 2023, Banga has advocated a reform of the bank’s energy strategy. His memo came just a day after a board meeting on energy policy.
“Our aim is to help countries deliver the energy their populations need while preserving the freedom to pursue development paths that suit their ambitions,” he wrote.
Beyond nuclear investment, Banga reaffirmed the bank’s ongoing support for decommissioning or repurposing coal-fired power stations and funding carbon capture technologies for industrial and energy sectors. He also pledged continued support for improving grid performance.
During the International Monetary Fund and World Bank spring meetings in April, US Treasury Secretary Scott Bessent urged the bank to prioritise practical, reliable energy access over “distortionary climate finance targets.” He encouraged the use of World Bank resources to support energy development in emerging economies, including potential investment in gas and fossil fuels.
Bessent also praised the bank’s reconsideration of its longstanding restrictions on nuclear project funding.
However, Banga acknowledged that the World Bank’s board has not yet reached a consensus on whether, and under what conditions, it should support upstream gas development.
The United States, the World Bank’s largest shareholder, remains a leading voice in the push to reverse the institution’s past limitations on nuclear energy support.