Five practical steps for the World Bank to get comfortable with nuclear
Shareholders are growing restless
The World Bank needs to pull its head out of the sand on nuclear power. But what exactly should that mean? And when? I’ve got some ideas.
What’s up with the World Bank’s aversion to nuclear?
I’ve argued before that nuclear technology is evolving quickly, most countries want it, and the push for firm low-carbon energy will make nuclear attractive in many places, especially in fast-growing emerging markets. (I mean, the US is replacing coal plants with new modular reactors, so why not help Indonesia, India, and others do the same?)
The World Bank’s mandate is to end global poverty, while it’s trying desperately to be a leader on climate policy too. Yet it currently has:
An official energy policy that explicitly excludes nuclear
Zero out of 10,000+ staff who specialize in the technology
A ban on nuclear investment via an exclusion list for its private sector arm.
I’d like to see the World Bank help nuclear tech deploy faster, smarter, and in the service of humanity. They could get involved to help countries make sound infrastructure decisions, ensure open procurement, set high safety standards, and, well, avoid locking their energy security future into a 50-year fuel agreement with the Russian state. Eventually, maybe, the World Bank could even help finance nuclear projects. But how to get started?
What specifically could the World Bank do to support nuclear in the next year or so?
I’d hope to see the following:
Send a clear signal. A categorical statement that nuclear is a zero-carbon energy source that the world will need to reach its climate and development goals could go a long way. Reopening a strategy is a messy dragged-out process, but some unambiguous public signal from Bank leadership would help set expectations of more to come.
Build an expert team. Creating an in-house technical team would allow the organization to assess the different nuclear models, model the financing options, and begin to take evidence-based views on where nuclear power might be most valuable (or not). To do this quickly, the Bank should ask shareholders to lend expert staff. I’m confident they would respond enthusiastically.
Hang an advisory shingle. Once some critical mass of inside knowledge is established, the Bank should do what it always does: advise countries on their options, the requirements and implications of different choices, procurement standards, and all the other plumbing that is the Bank’s normal remit – but has been utterly missing because of an outdated ideological ban.
Normalize nuclear in infrastructure planning. I hear anecdotally that some country teams will talk about nuclear already with partners that want it, but the staff mostly keep it on the down-low since the Bank officially does not get involved with nuclear. And no one wants to rile the German delegation. This is dumb. Just be open.
Most importantly, remove nuclear from the IFC exclusion list. The biggest near-term positive impact the World Bank could have to help nuclear markets grow would be to end the ban at the International Finance Corporation (IFC, the arm of the Bank that lends to private companies). IMO, it’s bonkers to list nuclear power alongside weapons, gambling, and child labor. Just take it off.
The real benefit → the ripple effect
Sure, it would be helpful for the IFC to eventually co-finance nuclear projects, but its money is not that important. The urgent reason to remove nuclear from the World Bank sin bin is because so many others blindly follow its lead. Setting investment standards is complicated and politically fraught, so lots of other public and private financial institutions merely copy the IFC’s exclusion list. The Asian Development Bank, for instance, uses the same language (and the exact same footnote). The US Development Finance Corporation (DFC) did the exact same thing (same words, same footnote) until the ban was successfully lifted in July 2020. A quick google search turned up lots of private funds with the exact same list and language. So a change at the IFC should unlock other multilateral banks, private funds, and institutional investors. I’ll say it again: Just take it off.
When could we hope for such changes?
These five steps won’t all happen quickly. The annual meetings of the World Bank and IMF are in late October, the semi-annual get-together of the shareholders and a circus of outsider groups. I suspect that will be too soon for any major changes, but even some open discussion of a still-taboo subject could help soften opposition and set the stage for more positive steps.
A few weeks later is COP29. At the last COP, about two dozen influential countries pledged to triple nuclear power and – in a major first – specifically called for the World Bank to consider nuclear technology. I expect the pressure to be turned up this year, but probably no meaningful changes announced by November.
That leaves the Bank-Fund spring meetings in April 2025 as the first really juicy target date. If clear changes aren’t afoot by then, I would expect the growing ranks of pro-nuclear shareholders to get irritated. Tick tock.
Thank you so much for these thoughtful and practical analyses.
I keep trying, too https://www.mattball.org/2023/08/net-zero-in-practice-is-war-on-poor.html
I'm all for helping nuclear but so what if a bunch of places have rules against investing in nuclear? As long as it's genuinely profitable someone else will be happy to invest and make the money. At least in the first world we have robust capital markets that mean this really shouldn't make a difference.
The real issue is and always has been regulatory. In the US the fact that the NRC isn't allowed to weigh cost vs safety nor target a specific safety level guarantees a lack of profit because any cost savings always make some other safety mechanism viable. More generally, it's clear that most western governments would prefer it if no nuclear plants were built even if they want to be seen as not standing in the way and that means the industry faces regulatory risk/uncertainty.