US House ramps up pressure on World Bank nuclear ban
Will the US or Banga move first?
Hey, a bright spot for US development policy! On March 5, the House Financial Services Committee overwhelmingly approved the International Nuclear Energy Financing Act of 2025. The bill calls for the US Treasury to use its “voice and vote” at the World Bank and other related multilateral agencies to
Remove prohibitions on financial and technical assistance for nuclear energy.
Increase internal capacity to assess nuclear potential and assist client countries.
If you read this Substack, you’ll know why I think lifting the ban is overdue and why this bill makes me happy.
Here’s what I think it means:
This is not just MAGA posturing. US pressure is real. The lead sponsor is powerful committee chair French Hill (R-AK) who effectively controls every dollar from the USG to the multilateral banks.
Democrats are on board too. Nuclear is a rare example of bipartisan agreement. The bill’s co-sponsor is Ritchie Torres (D-NY) and it passed out of committee 39-10 with a majority of Ds.
Nuclear power is a US national security issue. Congress is mainly concerned that Russia and China will use state-owned & state-financed nuclear tech to dominate the next wave of global nuclear exports. The US is already way behind, and the World Bank could help ensure fairer competition for nuclear power. This is especially important as the next generation of smaller modular reactors come to market and lots of countries will want them.
Banga is in a pickle. President Biden appointed AJ Banga as World Bank president in 2023 with an explicit mandate to prioritize climate. He did so (and sometimes it went overboard). Now, as the NYT reported last week, he’s got to carefully pivot back to keep the Bank’s largest shareholder from quitting the organization – and he’s presumably negotiating to keep his job. Nuclear could help him do both.
What will the White House do?
The wildcard is what’s going on inside the US administration. The nuclear ban is just one issue affecting its future stance toward the multilaterals. Frustration with the World Bank also rests on its lending to China (which is both a donor and a borrower) and the visceral antipathy to anything resembling foreign aid. One wing of Republicans believe a “World Bank” is just too close to a “World Government” and would like it to just go away. Others understand that the World Bank, built by the US and allies after World War II, is in reality one of the high-leverage ways to promote private sector development – or, if you prefer, global capitalism. I hope this sensible faction wins the internal debate.
Who moves first?
The bill now waits for a vote on the House floor and a Senate companion to be introduced. Congressional action could all be OBE if Banga preemptively lifts the nuclear ban or if the White House makes a decisive move to push him out. The FT today is reporting that Banga has a nuclear review underway and that the Trump administration is also soon deciding what to do. Germany, the principal anti-nuclear holdout, is also getting a new government that could give Banga more leeway. So I expect nuclear to be a major issue when the World Bank’s shareholders all gather in Washington in about a month.
Tick tock. Who will move first?
Todd, Your piece is badly misinformed. First, the WBG can survive US exit; in fact, it would be a good thing (check my recent Substack on that subject). Second, you are wrong about design & construction times for nuclear where under the best conditions (small reactors in China, South Korea, Japan), 5-8 years are needed, during which time the cost & reliability of renewable & battery systems in WBG borrower nations will continue to fall. Third, the nuclear build times would be longer in IBRD borrowers because the safety and liability issues around nuclear are not well understood in greenfield countries (there would be a deluge of Inspection Panel cases, for one thing). Fourth, the WB has no staff expertise in nuclear and would have to hire expertise from the competing suppliers (US, China, Japan, etc) which would present an enormous conflict of interest. Fifth, the insurance costs of nuclear in greenfield countries (Indonesia, others) would be very high and reinsuring them would add to the LCOE of nuclear in such countries. Sixth, even a few nuclear plants using the cheapest modular designs (eg, South Korea) would absorb a significant amount of IBRD lending capacity and divert IBRD lending from other areas (eg, green lending), which is probably the idea anyway behind pressure from hayseeds like French Hill. Seventh, the US effort to lift the ban is basically special pleading from the US industry which is convinced that it can use USG pressure on the WBG to give preference to US designs & US construction. PS: Your remark on “overboard” (linking to the obviously silly WBG publicity on GHG savings in Guiné-Bissau) is designed to fool the ignorant in pretending that there is a terrible, consequential pattern of WBG pressure on tiny, poor countries to go green.
Great news!!