After more than six decades, the World Bank returns to the nuclear sector.

The step marks a fundamental policy shift and is likely to have far-reaching consequences for the global energy transition. In particular, nuclear energy is considered a stable and CO₂-free base load carrier in emerging markets with growing electricity demand. Banga justifies the policy shift with the need to handle the doubling of electricity demand in developing countries by 2035. To meet this demand, the annual investment requirement in generation, grids, and storage must increase from the current 280 billion USD to 630 billion.

Nuclear energy projects are hardly feasible without low-cost financing from institutions like the World Bank, according to industry circles. The move could also prompt the Asian Development Bank and other multilateral lenders to reconsider. The background is the competitiveness of Western suppliers: While Russia with Rosatom and China with state-supported nuclear projects are expanding globally, U.S. and EU firms have so far lacked equivalent access to financing.

The World Bank's change of direction follows a successful lobbying campaign by Western nuclear power advocates – including the USA and France – and a political shift in Berlin. The German government under Chancellor Friedrich Merz recently signaled a willingness to abandon its decades-long blockade against nuclear projects. France's request to treat nuclear energy on par with renewable energies in the EU is no longer being blocked.

For the first time since 1959, the World Bank could finance nuclear projects again. It is focusing, according to Banga, on Small Modular Reactors (SMRs), which are considered a scalable and potentially more cost-effective option—especially for regions with weak grid infrastructure.

The strategy shift also comes at a time when AI technologies are significantly increasing global power demand. At the same time, governments are relying on low-CO₂ base load solutions in light of the climate crisis. More than 30 countries committed at the UN Climate Conference COP28 in Dubai last year to triple global nuclear power capacity by 2050.

Banga emphasized that private investments are essential but need support from the World Bank – for example, in the form of guarantees or equity instruments. The bank also wants to continue promoting solar, wind, hydrogen, geothermal, and gas power plants, provided they do not hinder the expansion of renewables.