World Bank will end nuclear energy ban, but still debate upstream gas
Ajay Banaga, president of the World Bank, said that its board had agreed to lift a ban on financing nuclear energy projects for developing countries. This is part of an effort to meet the growing demand for electricity.
Banga sent an email outlining the bank's new energy strategy to its staff following what he described as a constructive meeting with the board. Banga said that the board had not reached a consensus on whether or not the bank should be involved in upstream natural-gas projects.
In 2017, the global development bank, a lender at low interest rates that lends to countries to build everything from railroads to flood barriers, announced it would cease funding upstream oil projects by 2019. However, it will still consider gas projects for the poorest countries. In 2013, it decided to stop funding nuclear projects.
He said that while the issues were complex, they had been resolved in a way that would allow electricity to be used as a tool for development. However, he added, further discussions are needed on the topic of upstream projects.
Since taking office as the Bank's president in June 2023 the Banga government has pushed for a change in energy policy. They argue that the bank should adopt an "all-of-the above" strategy to help countries meet their rising electricity demands and achieve development goals.
In his memo, the author noted that by 2035 electricity demand in developing countries was expected to double, which would mean an investment of more than twice today's $280 billion annually in generation, grids, and storage.
Since taking office, the Trump administration has pushed hard to end the nuclear energy ban.
The U.S. owns 15.83% of the bank, followed by Japan at 7%, and China at close to 6%. President Donald Trump will be pleased with the bank's decision, as it broadens its approach to energy-related projects.
According to Third Way and the Energy for Growth Hub, 28 countries currently use commercial nuclear energy, and 10 others are ready to begin and another 10 could be ready by 2030.
Banga stated that the bank's revised strategic will allow countries to determine their best energy mix. Some may choose to invest in solar power, wind, hydroelectricity, or geothermal power while others may opt for natural gases or, eventually, nuclear.
He said that the bank will continue to finance and advise on midstream and downstream natural gas projects if they are the lowest-cost, best aligned, and minimize risk, and do not limit renewables.
He said that the World Bank Group will work closely with IAEA to enhance its capacity to provide advice on non-proliferation, safety, security, and regulatory frameworks.
The bank will support grid upgrades and efforts to prolong the life of nuclear reactors that are already in place. The bank would also accelerate the potential for small modular reactors, so that they can become a viable choice for more countries in time. (Reporting and editing by Nia William; Additional reporting by Valerie Volcovici)
(source: Reuters)
