World Bank Explores Nuclear Energy Financing Amid Policy Tensions
ECONOMY & POLICY

World Bank Explores Nuclear Energy Financing Amid Policy Tensions

The World Bank’s steering committee on Friday endorsed plans to expand energy access initiatives, including exploring potential financing for nuclear energy projects. This move aligns with recent U.S. directives aimed at broadening the bank's approach to energy sector funding.

The committee’s statement also reaffirmed support for the development lender’s gender equality strategy. This endorsement comes just days after U.S. Treasury Secretary Scott Bessent criticised both the World Bank and the International Monetary Fund (IMF) for what he described as "mission creep," accusing them of drifting beyond their core mandates of development and economic stability into areas such as climate change, gender, and inclusion.

In a joint statement, the World Bank and IMF's Development Committee called for the World Bank Group (WBG) to work towards providing affordable and reliable energy access to 300 million Africans by 2030.
"We encourage the WBG to explore further options for increased affordable and reliable energy access, including potential support for nuclear energy," the statement noted.

Bessent, however, urged the World Bank to prioritise affordability over climate-related targets, welcoming the decision to lift the prohibition on financing nuclear energy. He also advocated for continued support for gas and other fossil-fuel-based energy production.

While the Development Committee recognised the World Bank’s goal to allocate 45 per cent of its lending to climate activities by fiscal year 2026, it stressed that climate financing should be driven by client demand, focusing on areas like electricity access, resilient transport solutions, biodiversity, sustainable food systems, and climate adaptation.

The panel also fully endorsed the World Bank’s gender strategy, highlighting programmes that aim to provide 80 million women and women-led businesses with access to capital and efforts to improve human capital outcomes for women and girls.

German Development Minister Svenja Schulze stated that she had pushed to maintain focus on women's rights and climate change concerns during the discussions, despite U.S. pressure to scale back these priorities.
"We set a course for the bank over the past two years, and we must stick to it," Schulze said, noting that European Union countries collectively hold 23 per cent of the bank’s shares compared to the United States’ 16 per cent.

Participants noted that the United States, traditionally the first speaker during Development Committee meetings, did not lead this session and found limited support for its position outside of Russia.

One delegate, speaking anonymously, remarked that Washington’s current stance was surprising given decades of strong U.S. backing for the World Bank. There remains uncertainty over whether the United States will honour its earlier pledge, made under President Joe Biden, to contribute $4 billion to the International Development Association, the bank’s fund for the world’s poorest nations. Bessent indicated that fulfilling the pledge would depend on upcoming U.S. budget negotiations and World Bank reform progress.

The World Bank’s steering committee on Friday endorsed plans to expand energy access initiatives, including exploring potential financing for nuclear energy projects. This move aligns with recent U.S. directives aimed at broadening the bank's approach to energy sector funding.The committee’s statement also reaffirmed support for the development lender’s gender equality strategy. This endorsement comes just days after U.S. Treasury Secretary Scott Bessent criticised both the World Bank and the International Monetary Fund (IMF) for what he described as mission creep, accusing them of drifting beyond their core mandates of development and economic stability into areas such as climate change, gender, and inclusion.In a joint statement, the World Bank and IMF's Development Committee called for the World Bank Group (WBG) to work towards providing affordable and reliable energy access to 300 million Africans by 2030.We encourage the WBG to explore further options for increased affordable and reliable energy access, including potential support for nuclear energy, the statement noted.Bessent, however, urged the World Bank to prioritise affordability over climate-related targets, welcoming the decision to lift the prohibition on financing nuclear energy. He also advocated for continued support for gas and other fossil-fuel-based energy production.While the Development Committee recognised the World Bank’s goal to allocate 45 per cent of its lending to climate activities by fiscal year 2026, it stressed that climate financing should be driven by client demand, focusing on areas like electricity access, resilient transport solutions, biodiversity, sustainable food systems, and climate adaptation.The panel also fully endorsed the World Bank’s gender strategy, highlighting programmes that aim to provide 80 million women and women-led businesses with access to capital and efforts to improve human capital outcomes for women and girls.German Development Minister Svenja Schulze stated that she had pushed to maintain focus on women's rights and climate change concerns during the discussions, despite U.S. pressure to scale back these priorities.We set a course for the bank over the past two years, and we must stick to it, Schulze said, noting that European Union countries collectively hold 23 per cent of the bank’s shares compared to the United States’ 16 per cent.Participants noted that the United States, traditionally the first speaker during Development Committee meetings, did not lead this session and found limited support for its position outside of Russia.One delegate, speaking anonymously, remarked that Washington’s current stance was surprising given decades of strong U.S. backing for the World Bank. There remains uncertainty over whether the United States will honour its earlier pledge, made under President Joe Biden, to contribute $4 billion to the International Development Association, the bank’s fund for the world’s poorest nations. Bessent indicated that fulfilling the pledge would depend on upcoming U.S. budget negotiations and World Bank reform progress.

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