The World Bank has formally removed its prohibition on financing nuclear energy projects in developing countries. This smart decision will help address the booming electricity needs in these areas. The announcement comes at a time where concerns about the dual crises in energy security and sustainability have come to the forefront. Electricity demand in developing countries is expected to more than double by 2035. The International Atomic Energy Agency (IAEA) will be at the forefront of this critical advance. Specifically, it will coordinate closely with the World Bank Group’s International Finance Corporation on nuclear energy projects.
The partnership between the World Bank and the IAEA focuses on three primary objectives: enhancing energy security, promoting sustainable development, and ensuring rigorous safety standards throughout nuclear initiatives. This collaboration is expected to provide nations with viable energy solutions that align with their development goals and climate commitments.
A New Era for Nuclear Energy
Today, 31 countries run nuclear plants, providing about 9% of the world’s electricity. Almost a quarter of this production comes from low-carbon sources. This illustrates the important role nuclear energy has in reducing greenhouse gas emissions. The IAEA has been helping over 30 other countries-of-interest establish safe, secure nuclear programs. They’re important counterparts that deliver on the promise of making these initiatives safe and sustainable.
Rafael Mariano Grossi, the director general of the IAEA, was optimistic about the nascent partnership. He stated,
“This landmark partnership, yet another sign of the world’s return to realism on nuclear power, opens the door for other multilateral development banks and private investors to consider nuclear as a viable tool for energy security and sustainable prosperity. Together, we can help more people build a better future.”
This feeling is part of the new reality dawning on all—that we need all the energy we can get to feed a growing, global energy appetite.
Commitment to Safety and Sustainability
Ajay Banga, President of the World Bank, made clear that safety and sustainability must be at the heart of this new approach. He said,
“Our partnership with the IAEA marks an important step, and I am grateful to Rafael for his personal commitment and leadership in making this possible. Together, we will deepen our expertise, support countries that choose nuclear, and ensure that safety, security and sustainability guide every step forward.”
This new commitment is a significant change in emphasis. Today, we focus less on ensuring energy needs are met and more on making sure safety and environmental integrity are not compromised.
Implications for Future Investments
The World Bank’s decision has the potential to open the floodgates for other multilateral development banks. It will help spur private investors to see nuclear energy as a worthy investment again. To make this mammoth task easier, the World Bank is collaborating with the IAEA. Together, they hope to help define a framework that encourages the beneficial expansion of nuclear energy in the developing world. The implications of this partnership could lead to significant investments in the sector and a more diversified approach to global energy solutions.