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Global consensus calls for nuclear expansion, which needs financial support
The World Bank and other MDBs do not currently provide financing for new nuclear power construction projects, although some MDBs have provided loans for upgrades of existing nuclear power reactors or their decommissioning. Mr. Grossi said that nuclear power financing would better align MDBs with the “new global consensus” forged last year at COP28 in Dubai, where the world called for accelerating the deployment of nuclear power alongside other zero-emission energy technologies to achieve deep and rapid decarbonization.
Dozens of countries have also signed a oath made at COP28 to work towards tripling global nuclear power capacity to achieve net zero by 2050. The pledge also called on the World Bank, regional development banks and international financial institutions to include nuclear power in their lending. That call was echoed by dozens of countries at the first Nuclear Energy Summit hosted by the IAEA and the Government of Belgium in March.
The International Energy Agency (IEA) says global nuclear power capacity, which provides a quarter of the world’s low-carbon electricity, must at least double by mid-century to meet climate goals, in line with the IAEA’s highest-case scenario for 2023. projections. Doubling nuclear capacity by 2050 will require more than doubling nuclear energy investment to $100 billion annually, the IAEA estimates.
About 30 so-called newcomer countries are considering or already embarking on nuclear power to accelerate their development and reduce emissions. In nuclear power, they see a technology that can provide the backbone of a modern energy system with 24/7 electricity, as well as applications such as industrial heat needed to cleanly power a modern economy, including enabling greater deployment of variable solar and wind power.
About two-thirds of newcomers to nuclear power are in the developing world, and according to the International Energy Agency (IEA), nuclear power will have to expand significantly in these countries if the world is to have a reasonable chance of meeting the climate goals of the Paris Agreement.
But financing such projects remains a major hurdle. While some newcomers, such as Bangladesh and Egypt, are already building their first nuclear power plants with the help of government-backed financing from nuclear reactor suppliers, other countries may need to look for different financing options. Several newcomers are interested in emerging technologies such as small modular reactors (SMRs).