World Bank faces pressure from US to lift ban on nuclear power financing

The World Bank is facing increasing pressure from its largest shareholder, the United States, to lift its ban on financing nuclear power, as Western nations seek to compete with China and Russia in the nuclear energy race.

French Hill, chair of the US House Financial Services Committee, has indicated that the Biden administration is committed to supporting the push for nuclear energy funding just months ahead of a pivotal decision on the ban, Caliber.Az reports per foreign media.

Hill told the Financial Times last month that World Bank President Ajay Banga had the backing of the US to reconsider the policy, with the global development institution moving closer to including nuclear energy in its funding for emerging markets.

“We support both the export of this technology and a much broader approach to financing it,” Hill said.

The World Bank has not financed nuclear power since the 1950s, but this could change within months as the bank conducts a review of its energy policies under Banga's leadership. The review could see nuclear energy brought back into the fold, especially with the advent of new technologies such as smaller modular reactors that could make nuclear power more affordable.

Banga, a former Mastercard CEO, has expressed openness to revisiting nuclear technology, notably in an address to the European Commission earlier this month. However, countries such as Germany and several smaller European nations have traditionally opposed nuclear financing at the World Bank.

The US, alarmed by China and Russia’s growing influence in nuclear development across Africa and Asia, is particularly keen to see the World Bank change its stance. Hill said he has been in constant discussions with other governments eager to expand nuclear energy but struggling to garner attention from Western nations.

The World Bank is currently finalising a new energy strategy that aims to explore nuclear as part of a reliable energy mix, alongside investments in renewables and natural gas. A senior official stated that the bank is still working out how nuclear projects could be made affordable for developing countries, with the review expected to conclude in the coming months.

The US government’s scrutiny of the World Bank’s nuclear policy comes as the Trump administration reviews its relationship with international financial institutions, a process expected to be completed by August. The administration’s Project 2025 manifesto has labelled multilateral organisations, including the World Bank, as contrary to US free market principles.

However, during his first term, former President Donald Trump established the Development Finance Corporation, demonstrating a willingness to use such institutions to advance US national security interests.

Hill introduced a bill last month urging the US to lobby the World Bank to end the nuclear financing ban, signalling that lifting the ban is a top priority for Washington. Todd Moss, director of the Energy for Growth Hub think tank, which has advocated for the bank to build technical capacity in nuclear power, said the bill was intended to ensure American nuclear firms were not hindered by an outdated policy.

The World Bank approved its only loan for nuclear power in 1959 to help fund Italy's first atomic plant. Since then, it has explicitly excluded nuclear power from its lending policies, citing safety concerns and the risk of proliferation. The bank’s private sector arm, the International Finance Corporation, has similarly avoided nuclear projects.

In recent years, China’s state-owned development banks have surpassed the World Bank in financing global energy projects, including nuclear power. Meanwhile, Russia's Rosatom has secured agreements with countries such as Vietnam, Egypt, and Turkey to finance nuclear plants.

While some US firms, such as Westinghouse, have secured deals for nuclear projects, official US financing has been limited.

Support for nuclear power has grown in Washington, with President Joe Biden signing legislation last year to streamline the permitting process for new nuclear reactors. The 2025 legislation, introduced by Hill and New York Democrat Ritchie Torres, would go further, establishing a trust fund to support nuclear projects through the World Bank and other international financial bodies.

Hill advocates for Western democracies to offer competitive bids and affordable financing for nuclear energy projects in developing countries, ideally incorporating American components and assistance from the US Export-Import Bank.

By Aghakazim Guliyev