World Bank and IAEA Forge New Partnership to Support Nuclear Energy in Development

In a historic move that signals a transformative shift in global energy development strategy, the World Bank Group and the International Atomic Energy Agency (IAEA) have entered into a strategic partnership to advance the safe, secure, and sustainable deployment of nuclear energy in developing countries. The agreement, signed today by World Bank Group President Ajay Banga and IAEA Director General Rafael Mariano Grossi, marks the World Bank Group’s first formal engagement with nuclear energy in decades.

The memorandum of understanding (MoU) cements over a year of close collaboration between the two institutions and represents a significant pivot in the World Bank’s approach to electrification. This collaboration is expected to play a key role in expanding access to reliable, affordable, and low-carbon electricity across low- and middle-income nations grappling with rising energy demand and decarbonization goals.

Responding to Surging Global Electricity Demand

The agreement arrives at a critical time. Electricity demand in developing countries is expected to more than double by 2035, fueled by rapid industrialization, urban expansion, and digital transformation—including the accelerating adoption of energy-intensive technologies such as AI.

“Jobs need electricity. So do factories, hospitals, schools, and water systems,” said President Ajay Banga. “As demand surges—with AI and development alike—we must help countries deliver reliable, affordable power. That’s why we’re embracing nuclear energy as part of the solution—and reembracing it as part of the mix the World Bank Group can offer.”

By formally embracing nuclear power as an option, the World Bank seeks to offer its member countries a technology-neutral pathway toward energy security and economic growth. The renewed engagement is based on providing countries with the flexibility to adopt energy sources that align with their development strategies and Nationally Determined Contributions (NDCs) under the Paris Agreement.

Nuclear Energy: A Strategic Asset for Developing Economies

Nuclear power offers several unique advantages, especially for developing nations:

• It provides continuous baseload electricity, enhancing grid stability and resilience—a crucial factor for sectors such as agriculture, manufacturing, healthcare, and tourism.

• It creates high-skilled employment opportunities and promotes local industrial development.

• It integrates well with renewable energy systems, helping to stabilize grids with intermittent sources like wind and solar.

Currently, 31 countries operate nuclear power plants, producing nearly 9% of the world’s total electricity, and accounting for almost a quarter of all low-carbon electricity. Another 30+ countries, mostly in the developing world, are actively considering nuclear power and are already engaging with the IAEA to build essential infrastructure and regulatory frameworks.

Three Pillars of the New Partnership

Under the newly signed MoU, the World Bank Group and IAEA will collaborate in three strategic areas:

1. Knowledge Building in the Nuclear Sector

   • Strengthen the World Bank’s capacity to evaluate and support nuclear projects through in-depth understanding of safety protocols, energy planning, fuel cycles, reactor lifecycles, and waste management.

2. Extension of Existing Reactors' Lifespans

   • Assist developing nations in extending the operational life of current reactors, many of which are approaching or exceeding their original 40-year design life. This is considered one of the most cost-effective ways to maintain low-carbon electricity supplies.

3. Advancement of Small Modular Reactors (SMRs)

   • Accelerate the development and deployment of SMRs, which offer modular construction, lower upfront costs, and flexibility in scaling energy capacity to suit varying national needs—making them ideal for smaller economies and remote regions.

“SMRs have great potential to cleanly and reliably power progress and fight poverty,” said Director General Grossi, “but financing remains a roadblock. Today’s agreement is a crucial first step to clearing that path.”

A Turning Point for Global Nuclear Financing

Historically, multilateral development banks (MDBs) have steered clear of nuclear investments, citing cost, complexity, and political sensitivities. This new partnership signals a turning point—potentially encouraging other MDBs and private sector investors to follow suit and re-evaluate nuclear power as a viable and scalable tool for climate-friendly development.

“This landmark partnership… opens the door for other multilateral development banks and private investors to consider nuclear as a viable tool for energy security and sustainable prosperity,” said Grossi.

The IAEA has long supported member states with the technical, regulatory, and safety frameworks necessary for nuclear development. Now, with the World Bank’s financial and institutional clout, developing countries may have unprecedented access to the tools, knowledge, and support they need to integrate nuclear into their national energy strategies.

A New Era in Sustainable Energy Collaboration

The World Bank–IAEA partnership represents a historic reinvigoration of nuclear power within the global development agenda. As nations strive to meet rising energy demand while reducing emissions, this alliance offers a path forward that is inclusive, safe, and responsive to national contexts.

By working together, the two institutions aim to provide countries with credible options to power their futures—not just with more energy, but with the right energy: affordable, reliable, low-carbon, and sustainable.