The World Bank’s recent decision to end its long-standing ban on funding nuclear energy projects in developing countries marks a significant and controversial shift in global development finance. This reversal, announced by World Bank President, Ajay Banga on 11 June 2025, comes after more than a decade of prohibition on nuclear project financing, initially enacted in 2013 following heightened safety concerns and the Fukushima Daiichi nuclear disaster in 2011. The last time the bank funded a nuclear power project was 1959 in Italy. While the Bank frames this latest move as a pragmatic response to increasing electricity demand in developing nations, the policy change raises profound questions about safety, sustainability, and geopolitical motivations.

The rationale for reversal: Energy demand and development goals

The World Bank’s ban on nuclear funding was part of a cautious approach to energy investments in developing countries, reflecting the complex challenges of nuclear safety, waste management, and non-proliferation risks—especially in nations with limited regulatory and technical experience. However, President Banga highlighted that electricity demand in these countries is expected to more than double by 2035, necessitating over $280 billion annually in energy investments to support development goals. The Bank now aims to support not only new nuclear projects but also life extensions for existing reactors, power grid upgrades, and exploration of small modular reactor (SMR) technology, which is touted as safer and more scalable.

The geopolitical imperative: US influence and nuclear competition

The policy reversal was strongly influenced by pressure from major shareholders, notably the United States, which holds the largest share in the Bank and has actively lobbied for lifting the ban since the Trump administration took office. The US wields significant influence over the bank’s policies. These lobbying efforts align with a broader US strategy to reassert its leadership in nuclear technology and to counter the growing influence of other nuclear vendors, particularly Russia and China, in global energy markets.

The World Bank’s decision is also likely to influence other international financial institutions, potentially encouraging them to follow suit in backing nuclear projects despite unresolved safety and economic concerns. This shift could reshape global development finance toward riskier energy projects driven more by geopolitical competition and industrial interests than by genuine climate safety and sustainable development priorities.

Safety and environmental concerns

Despite the Bank’s assurances of working closely with the International Atomic Energy Agency (IAEA) to ensure nuclear safety, regulation, and non-proliferation safeguards, many experts and advocates remain deeply concerned. Developing countries often lack the robust regulatory frameworks, technical expertise, and emergency preparedness needed to manage nuclear power safely. The risk of accidents, which can have catastrophic and long-lasting environmental and human health consequences, remains a critical issue.

Moreover, nuclear projects are expensive and complex, often going over the initial budget and have long period of construction. Developing nations could become locked into costly infrastructure with uncertain outcomes, diverting scarce resources from more affordable renewable energy sources such as solar and wind. These renewables can not only offer lower safety risks, but are also better tools for sustainable development and climate resilience goals.

Growth of nuclear in developing countries

Countries like Uganda are already advancing ambitious nuclear plans, with projects like a 2,000 MW reactor estimated to cost up to $9 billion, relying heavily on external financing and technical partnerships. Other developing countries in Africa are following suit. Egypt’s El Dabaa Nuclear Power Plant is the continent’s most advanced project, with four Russian-built reactors totaling 4,800 MW capacity. South Africa, already home to the Koeberg Nuclear Power Plant, is expanding its nuclear ambitions with a Nuclear New Build Programme targeting 2,500 MW by 2024 and plans for Small Modular Reactors (SMRs).

Beyond Africa, Bangladesh is another example, constructing the Rooppur Nuclear Power Plant of 2,400 MW capacity. In the Indian Union Budget 2025-26, finance minister, Nirmala Sitharaman announced the launch of the Nuclear Energy Mission for Viksit Bharat, with a Rs 20,000 crore (about $2.5 billion) allocation focused on developing at least five indigenously designed Small Modular Reactors (SMRs) by 2033. To facilitate this, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act are planned to encourage private sector investment and innovation in nuclear power. This is a dangerous trend where safety policies are watered down to encourage more nuclear power in developing countries.

While nuclear power promises emissions-free electricity, the financial and technical burdens may exacerbate inequalities and delay investments in renewables and energy efficiency measures that offer more immediate and equitable benefits. This is in addition to the significant social and environmental risks such projects pose, including displacement of communities, long-term radioactive waste management challenges, and the potential for catastrophic accidents with far-reaching ecological consequences.

Struggles against nuclear projects in India

India has witnessed sustained and widespread resistance against nuclear energy projects, driven by concerns over environmental safety, displacement, lack of transparency, and democratic accountability. Prominent among these are the struggles in Koodankulam (Tamil Nadu), Jaitapur (Maharashtra), and Chutka (Madhya Pradesh), which have become emblematic of grassroots opposition to nuclear expansion.

In Koodankulam, villagers, particularly fisher folk, have opposed the Russian-assisted nuclear power plant since the 1990s, fearing radiation risks, especially in the aftermath of the Fukushima disaster. Despite state repression and media vilification, the People’s Movement Against Nuclear Energy (PMANE) mobilised thousands in nonviolent protest, raising critical questions about safety protocols and local consent.

Jaitapur, intended to host the world’s largest nuclear power complex with French collaboration, has sparked ongoing resistance from farmers and fisher communities. Protesters highlight the ecological sensitivity of the Konkan coast and the project’s potential to devastate livelihoods and biodiversity.

Similarly, in Chutka, tribal communities have opposed the proposed nuclear plant, citing risks of displacement, radioactive exposure, and disregard for their consent, especially given past trauma from a failed hydro project in the same location.

These movements reflect deeper discontent with India’s top-down nuclear policy and call for rethinking energy choices in favour of safer, decentralised, and democratic alternatives.Successive governments and political leadership have come down heavily on the protesters, subjecting them to arbitrary arrests, filing false cases, vilifying them as anti-nationals, criminalising dissent and launching a crackdown on civil society organisations. The World Bank’s decision to finance nuclear projects will legitimise such human rights violations and shrinking democratic spaces

The World Bank’s lifting of its nuclear funding ban represents a highly contentious policy shift. While addressing the urgent need for expanded electricity access in developing countries is vital, prioritising nuclear energy risks sidelining safer, more affordable, and sustainable renewable options is dangerous. Developing nations deserve energy solutions that emphasise safety, affordability, and long-term sustainability rather than geopolitical power tactics and reliance on outdated, high-risk technologies. The World Bank must reconsider this dangerous path and ensure that its energy financing truly supports climate resilience and equitable development, rather than exposing vulnerable populations to unnecessary risks.

Anitha Sampath is the team lead for Energy Finance (Thermal and Renewable Energy) at the Centre for Financial Accountability.

Joe Athialy is executive director, Centre for Financial Accountability.

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