Nuclear Revival: Tackling the Talent Crisis for a Clean Energy Future (Copy)
Recent policy re-evaluations at the world’s foremost Multilateral Development Banks (MDBs) signal a fundamental realignment in the global approach to energy, climate, and development finance. For decades, nuclear energy was excluded from the portfolios of institutions like the World Bank and the Asian Development Bank (ADB). This exclusion is now ending, driven by a convergence of overwhelming pressures from climate change, geopolitics, and technological innovation.
Why MDBs Avoided Nuclear
The institutional aversion to nuclear energy within MDBs was a long-held position. The World Bank’s formal ban on financing new nuclear projects, instituted in 2013, was the culmination of a de facto prohibition that took hold following the 2011 Fukushima Daiichi accident. This policy was a departure from the Bank's early history; its only direct loan for a new nuclear power plant was in 1959 for Italy's Garigliano facility. The official rationale for this exclusion was institutional capacity, with the World Bank Group (WBG) stating it would not finance nuclear power because "safety of nuclear facilities and non-proliferation are not in the WBG's areas of expertise".
The Asian Development Bank adopted an even more categorical stance. Its 2021 Energy Policy stated unequivocally that the "ADB will not finance investments in nuclear power given the many barriers to its deployment, including risks". This positioned the ADB as a leader in clean energy finance but limited its definition of "clean" to renewable sources like solar and wind. Underpinning these policies were the political dynamics among key MDB shareholders, with strong anti-nuclear sentiment from influential member countries like Germany solidifying the exclusionary consensus.
The World Bank's Re-entry: A Cautious but Momentous Step
The World Bank's decision to re-engage with nuclear energy marks a historic turning point, characterized by caution and a phased strategy. The policy reversal was confirmed in a June 2025 memo from World Bank President Ajay Banga, announcing the board had agreed to "begin to re-enter the nuclear energy space". The re-entry is not a sudden opening of the floodgates but a carefully sequenced, three-pronged approach:
Support for Life Extensions: The initial focus will be on extending the operational life of existing reactors.
Financing for Grid Modernization: The Bank will support grid upgrades and related infrastructure, a critical enabler for any new power source.
Acceleration of Small Modular Reactors (SMRs): The policy includes a commitment to "work to accelerate the potential of Small Modular Reactors," signaling a strategic focus on next-generation technology.
While the World Bank's direct lending will be significant, the most profound consequence lies with its private-sector arm, the International Finance Corporation (IFC). The IFC's "Exclusion List" has long prohibited investment in radioactive materials and serves as a de facto global standard for a wide array of financial institutions. As long as nuclear remains on this list, a multi-trillion-dollar pool of global capital is firewalled from the sector. Removing this blanket prohibition would be a powerful market signal, triggering a cascade effect across the global financial system and opening the nuclear sector to a much wider and deeper pool of private capital than the World Bank could ever achieve through direct lending alone.
The Asian Development Bank’s Nuclear Policy: At a Turning Point?
While the World Bank has taken a decisive step, the Asian Development Bank (ADB) finds itself in a more complex position, caught between its own recent anti-nuclear policy and the overwhelming external pressure to adapt.
The ADB's institutional barrier is both recent and explicit. The bank's 2021 Energy Policy states that the institution "will not finance investments in nuclear power". This policy aligned the ADB with the Paris Agreement, focusing on renewables and energy efficiency. However, in the wake of the World Bank's announcement, reports indicate the ADB is now reconsidering its prohibition. This suggests a reactive shift, compelled by the actions of its larger peer and the changing geopolitical landscape.
The pressure on the ADB is both internal and external. Key shareholders like Japan have reversed their anti-nuclear stances and are now powerful voices for change. Simultaneously, the demand for reliable, low-carbon energy in Asia is immense. The ADB's core mandate is to support the economic development of its members, many of whom—including Indonesia, the Philippines, and Vietnam—are actively exploring nuclear power to transition away from coal and power their growing economies. It is highly probable that the ADB will amend its energy policy within the next 12 to 24 months, likely opening the door for financing on a case-by-case basis that mirrors the World Bank's cautious approach.
The Evolving Financial and Technological Landscape
The re-entry of the World Bank and the likely pivot by the ADB are occurring within a broader ecosystem of finance and technology that is itself in flux.
Broader Institutional Response and De-Risking Nuclear
The recent policy shifts are making waves across major financial institutions, gradually reshaping the global funding landscape for nuclear energy. While the picture remains varied, momentum is clearly building.
The European Investment Bank (EIB), though officially open to nuclear financing, has treaded cautiously—it hasn't funded a new nuclear power plant since 1987. However, there are signs of a strategic shift. Last year, EIB President Nadia Calviño emphasized that Europe "cannot be behind the curve" when it comes to SMRs. Nuclear projects, especially those focused on research and development of SMRs, are increasingly seen as “bankable” and therefore eligible for EIB support. In March, the EIB approved a €400 million loan to Orano for expanding its uranium enrichment facility at Tricastin— marking the bank’s re-entry into nuclear-related financing.
Meanwhile, the Asian Infrastructure Investment Bank (AIIB) maintains a more rigid stance. Its 2017 energy strategy explicitly rules out financing for nuclear power plants, amounting to an effective ban that remains in place.
Despite this growing institutional interest, the core financing challenge for nuclear power remains: the enormous upfront capital requirements and prolonged, high-risk construction timelines. Simply re-engaging won’t be enough. To make nuclear projects truly “bankable” for private investors, those risks must be reduced.
This is where multilateral development banks (MDBs) can play a transformative role—by enabling innovative financing mechanisms designed to de-risk investments. Structures such as the Regulated Asset Base (RAB), which permits cost recovery from consumers during construction, and Contracts for Difference (CfDs), which ensure revenue stability, are key tools in this effort. These are further supported by sovereign loan guarantees and strong insurance mechanisms grounded in international conventions like the Convention on Supplementary Compensation for Nuclear Damage (CSC) and national laws such as the U.S. Price-Anderson Act.
Technology-Specific Financing: SMRs Change the Game
The emergence of SMRs provides a powerful technological narrative that facilitates the MDB policy shift. The unique characteristics of SMRs—lower upfront cost, modularity, enhanced passive safety features, and suitability for smaller grids—directly address many of the historical objections MDBs had to traditional, large-scale reactors. The prominent placement of SMRs in President Banga's announcement was a deliberate choice, allowing the World Bank to frame its re-entry as forward-looking support for innovative and safer technology.
The financing ecosystem for SMRs is already distinct, characterized by a blend of public seed funding, venture capital, and strategic corporate investment. The U.S. Department of Energy has a $900 million funding opportunity to support "first mover" teams deploying SMRs. Similarly, India has launched a dedicated Nuclear Energy Mission focused on SMR research and development, with a significant investment of INR 20,000 crore (approximately $2.5 billion). The plan includes operationalizing at least five domestically developed SMRs by 2033.
Private companies like X-Energy and TerraPower have raised billions from venture capital and corporate giants like Amazon, often linking investment to future power purchase agreements for data centers. Furthermore, Export Credit Agencies (ECAs) like the U.S. EXIM Bank are actively marketing flexible, long-term financing packages specifically tailored for SMR exports.
The Expanding Global Nuclear Horizon
The nuclear energy sector is entering a phase of unprecedented growth. According to the IAEA’s high-case scenario, global nuclear capacity is set to more than double—reaching 950 GWe by 2050. This ambitious target means the world must add around 25 GWe of new capacity each year, over four times the pace seen in recent decades.
Asia is emerging as the powerhouse of this nuclear resurgence. The region is projected to account for 297 GWe by mid-century, driven largely by China, which already has 27 reactors under construction, and India, which aims to expand its capacity tenfold to 100 GW by 2047.
North America and Europe are also preparing for a nuclear revival, with plans underway for substantial capacity additions. Meanwhile, around 30 “newcomer” countries are setting up their first nuclear programs. Many of these are in Africa—where, according to the Nuclear Business Platform (NBP), the continent is expected to host 15 GWe of nuclear capacity by 2035. This global momentum underscores a bold, shared commitment to nuclear energy as a key pillar of the low-carbon transition.
Moving Forward
As global momentum accelerates, nuclear energy is steadily reclaiming its place at the center of the clean energy transition—supported by shifting multilateral bank policies, innovative financing structures, and rising demand for reliable, low-carbon power. From SMRs to large-scale projects driven by strategic public-private partnerships, the future of nuclear financing is being reshaped to meet the scale and urgency of the climate challenge. The cautious yet deliberate re-engagement by institutions like the World Bank signals not just a policy shift, but the beginning of a new era—one where nuclear energy can become both bankable and transformative.
