Why Nuclear Power Is Moving Back Into the Global Development Agenda

Nuclear power is moving back into the development-finance debate as the IAEA and World Bank Group deepen cooperation on reliable, low-carbon electricity. The shift comes as emerging economies face rising power demand, widening investment needs and growing pressure to expand energy access without locking in higher emissions.

Nuclear energy is moving back into the development-finance conversation, one year after the International Atomic Energy Agency (IAEA) and the World Bank Group signed a cooperation agreement aimed at helping countries assess nuclear power as part of their long-term electricity plans.

The partnership marks a notable shift because it represents the World Bank Group's formal return to engagement with nuclear power after several decades. More importantly, it reflects a broader change in how energy development is being framed. Under the partnership, the IAEA and the World Bank agreed to collaborate in three priority areas: strengthening nuclear knowledge within the World Bank to support informed financing decisions, extending the safe operation of existing nuclear power plants, and accelerating work on small modular reactors, or SMRs. These smaller reactor designs are expected to play a larger role in future energy systems, especially as countries look for firm low-carbon power options that can complement other energy sources.

The significance of the agreement lies less in any single project than in the institutional signal it sends. Nuclear power, long treated cautiously by many development lenders, is being reconsidered as part of the electricity access, energy security and climate debate.

Electricity demand is reshaping the energy debate

The renewed attention comes as emerging economies face a steep electricity challenge. The IAEA has pointed to rising electricity demand as one of the biggest development pressures facing these countries. More than one billion people still lack reliable access to electricity, limiting opportunities for economic growth, healthcare, education and industrial development.

World Bank estimates cited in the material suggest developing economies will account for nearly two-thirds of global electricity demand by 2035. Meeting that demand would require annual investment in power generation to rise from around $280 billion today to $630 billion.

The figures explain why the conversation around nuclear energy is widening. Countries seeking to expand power systems need electricity that is not only cleaner, but also dependable at scale. Renewable energy, grids, storage, hydropower, gas and nuclear power all occupy different roles in national energy planning. The challenge is building systems that can meet rising demand without locking economies into higher-emission pathways or exposing them to chronic shortages.

Nuclear energy's appeal is its ability to provide large-scale, low-carbon electricity. Its difficulty lies in financing, governance, safety requirements, long planning cycles and public confidence. IAEA's cooperation with the World Bank and other financial institutions focuses on the technical and institutional conditions that shape whether nuclear power can be responsibly considered before countries reach expensive construction decisions.

The financing gap comes before the reactor

For many countries, the biggest nuclear barrier is not only technology. It is the ability to prepare, finance and govern projects that require long-term commitments. Nuclear power demands strong regulatory systems, trained institutions, safety frameworks, infrastructure planning and clear rules on waste management, security and non-proliferation.

Over the past year, the IAEA and the World Bank have organised technical meetings, workshops and training sessions on nuclear power, safety standards and financing approaches. In January, the IAEA hosted a workshop in Vienna with representatives from international financial institutions including the World Bank Group, the European Bank for Reconstruction and Development, the Asian Development Bank and the OPEC Fund for International Development. The discussions examined how these institutions could support early-stage nuclear projects before construction decisions are made, including feasibility studies for SMRs, infrastructure planning, radioactive waste management and policy reforms aligned with international nuclear safety, security and non-proliferation standards.

Nuclear power cannot be treated as a plug-in solution for countries facing electricity shortages. It requires years of preparation, legal alignment, technical capacity and public accountability. By concentrating on knowledge, planning and standards, development institutions are positioning themselves closer to the decision-making phase that determines whether nuclear projects become feasible, safe and financially credible.

The real test is confidence, not enthusiasm

The IAEA has expanded partnerships with other development institutions, including agreements with the Asian Development Bank and the OPEC Fund in 2025. The ADB also updated its energy policy in 2025 to allow support for nuclear power projects, including investment opportunities linked to decarbonisation efforts.

This means that more institutions are willing to examine nuclear energy as one possible part of the wider power mix. The future of nuclear power in development finance will depend not on renewed interest alone, but on whether countries can meet the demanding conditions required for safe and economically sound deployment.

Nuclear power can support energy security and climate goals, but only if its financial, regulatory and safety challenges are handled with discipline. SMRs may attract attention because of their future potential, but they will still need credible financing pathways, licensing systems and public trust.

The next phase will show whether this renewed institutional engagement can move from workshops and policy alignment to practical readiness. What matters now is not whether nuclear power has re-entered the conversation, but whether development finance can help countries assess it with enough caution, capacity and transparency to make it a responsible option where it fits.