Historic agreement between IAEA and World Bank on nuclear development

For the first time in decades, the World Bank is reintegrating nuclear energy into its development financing strategy. It has partnered with the International Atomic Energy Agency (IAEA) to support countries that are turning to nuclear power as a means of securing reliable, affordable, and low-carbon electricity.

This marks the World Bank’s first step since lifting its longstanding restriction on financing nuclear projects. Through this new partnership, the IAEA and the World Bank will collaborate to strengthen capacity, enhance safeguards, and share technical expertise. The IAEA will also help the Bank “deepen its internal knowledge in areas such as energy planning, regulatory frameworks, the refurbishment of existing reactors, and the deployment of new technologies such as small modular reactors (SMRs).”

A Historic Shift for the World Bank

Two weeks ago, the World Bank’s Board of Executive Directors formally endorsed nuclear power “as part of a broader electrification approach—one that prioritizes accessibility, affordability, and reliability, delivered in a way that responsibly manages emissions. The goal is to help countries provide the energy their people need while giving them the flexibility to choose the path that best aligns with their development ambitions, national context, and nationally determined contributions (NDCs).”

World Bank President Ajay Banga and IAEA Director General Rafael Mariano Grossi signed the agreement during an event held in Paris. Ajay Banga emphasized the stark inequality in electricity access: average annual per capita electricity consumption is around 50 MWh in high-income countries, compared to just 4 MWh in Africa. He noted that this gap has widened in recent years, making “equitable growth and development in our world much more difficult,” as electricity demand in developing countries is expected to more than double by 2035.

With electricity demand in developing countries expected to more than double by 2030, we have launched a new partnership with the @WorldBank to support the safe, secure and responsible use of nuclear energy for their clean energy future.https://t.co/6ABneIx8nS pic.twitter.com/GM8VAZcuef

— IAEA – International Atomic Energy Agency ⚛️ (@iaeaorg) June 27, 2025

Meeting the Growing Demand in Developing Nations

“Meeting this demand will require annual investment in generation, grids, and storage to rise from today’s $280 billion to approximately $630 billion,” Banga stated. “This is the scale of effort that underpins our initiative to connect 300 million people in Africa to electricity by 2030 with the African Development Bank. That’s why we’ve developed a clear pathway to make electricity a driver of development.”

He underlined that sustainable development requires a stable, long-term power base. “What’s new is that, for the first time in decades, the World Bank Group is beginning to re-enter the nuclear energy space… This is a significant step we are taking—carefully, but with partnership and intent.”

The partnership will focus on three priority areas:

1. Strengthening capacity to advise on non-proliferation, safety, security, and regulatory frameworks.

2. Considering the life extension of existing reactors, described as “one of the most cost-effective ways” to generate electricity.

3. Exploring how we can accelerate the potential of small modular reactors (SMRs) to make them a more viable option for more countries over time.

Ajay Banga said: “The World Bank Group cannot do this alone, which is why this partnership with the IAEA is critical. It marks a very concrete first step in our re-engagement with nuclear energy. The IAEA will help us build internal capacity across a broad range of topics—from energy planning, project lifecycles, and fuel management, to waste disposal and the technical infrastructure needed to succeed. This coordinated approach will deepen our understanding of the responsible role nuclear energy can play and provide our clients with access to the guidance and support they need to pursue this path—if they choose to do so.”

A strong signal to international financial Institutions

IAEA Director General Rafael Grossi referenced current global challenges and declared that this agreement shows “when we work together, when we have a good idea, when we have the will to do something and change things—it is possible.”

He praised the efforts of the World Bank President, saying: “For many, many years, there was a prevailing narrative that this wasn’t possible. And for many, many years… the nuclear industry, those who actually do the work, were facing a wall—being told that nuclear investment was not for international financial institutions.”

“In my countless rounds of conversations across many regions of the world, when I approached banks, regional banks, financiers… they pointed to the World Bank’s position,” Grossi said, emphasizing that this policy shift comes after a year of joint efforts.

He concluded by stating: “The major hurdle we had was a lack of financing. Many clients in the Global South, in developing nations, and even in industrialized economies, needed financial support. And now they know they can come to the World Bank, they can talk to the World Bank. They can explain what they want to do—starting with life extensions, but also feasibility studies… looking into concrete projects, assessing feasibility, and working together.” ■