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The Asian Development Bank is reviewing whether to lift a ban on funding nuclear power projects to help meet a surge in demand for energy across the region.
The talks between officials at Asia’s largest multilateral lender and government stakeholders reflect growing support for the emissions-free energy source among global policymakers as they search for solutions to meet fast-rising electricity demands and climate commitments.
It follows a decision by the board of the World Bank last week to remove its decades-long prohibition on funding nuclear energy as well as policy shifts on nuclear energy from critical shareholders Japan and Germany.
“As part of a mandatory review of the policy scheduled for this year, we are discussing with our shareholders the possibility of expanding engagement in nuclear energy,” said Priyantha Wijayatunga, senior director for energy at the ADB.
“The energy policy review will consider amendments in response to changes in the external environment,” he told the Financial Times.
The ADB is the largest multilateral development bank in Asia. Last year, it committed $24.3bn in funding to promote development in Asia and the Pacific.
The bank is prohibited from financing nuclear energy projects, although its policies allow it to provide some forms of technical assistance such as energy planning and analysis.
But there is growing appetite among the ADB’s stakeholders for nuclear energy. Japan, the joint-largest shareholder in the bank alongside the US, has dramatically shifted its position on nuclear energy since the development bank finalised its current energy policy in 2021.
Nuclear energy power provided 30 per cent of Japan’s power before the Fukushima Daiichi nuclear disaster in 2011, which led to the closure of all the nation’s 54 nuclear reactors.
About a quarter of those facilities have since reopened, and Japan’s national energy plan to 2040 adopted in February pledged to “maximise” the use of nuclear power for first time since the disaster. Tokyo also said it would consider the construction of new reactors at existing nuclear power sites.
Japan’s pivot on nuclear energy has been spurred by higher than expected forecasts for electricity demand, thanks to the expansion of power-hungry semiconductor factories and data centres.
Meanwhile, Germany’s new government, led by Chancellor Friedrich Merz, signalled in May that it had dropped the nation’s long-standing opposition to nuclear power.
The US under Donald Trump has also been a vocal advocate of nuclear energy. Last month, the president signed a series of executive orders directing the government to fast-track construction of nuclear reactors, with the aim of quadrupling the country’s atomic energy capacity by 2050.
The orders also included targets for US energy exports and development of civil nuclear projects globally.
Washington has been calling for multilateral lenders to back nuclear projects, which it argues would help western companies compete with state-owned nuclear enterprises in Russia and China that are expanding overseas.
Russia’s Rosatom is building nuclear plants in Turkey, Bangladesh, China, India and Iran, while China National Nuclear Corporation is building reactors in Pakistan.
“The status quo of backroom nuclear deals only helps Russia and China,” said Todd Moss, executive-director at the Energy For Growth Hub, a think-tank that has advocated for western development banks to invest in nuclear energy.
Moss added that development banks could “work with governments to identify the best models for their needs and procure them competitively”.
He said the ADB was in a particularly important position because of its links with countries in south and south-east Asia that relied on coal power.
