Nuclear energy: How finance, policy and innovation can triple capacity by 2050

The landmark agreement between the World Bank and the International Atomic Energy Agency (IAEA) in June 2025 signals a new era: financial institutions are now firmly backing nuclear energy.

This is more than symbolic. It reflects growing momentum worldwide to expand nuclear power as a cornerstone of energy security, emissions reduction and economic development.

The IAEA’s annual projection, revised upwards for the fifth consecutive year, captures this trend. Its high-case projection estimates nuclear capacity to reach 2.6 times 2024 levels by 2050, while the low-case projects a 50% increase in current capacity.

Large-scale reactors are expected to remain central for decades but small modular reactors show strong potential, accounting for nearly a quarter of new capacity in the high-case projection, reflecting growing interest across both developed and developing countries.

The World Bank’s recent decision to reopen its doors to nuclear projects sends a strong signal to the global community, and is a move that several other multilateral development banks are preparing to follow.

Global climate commitments, energy security concerns and economic and demographic growth are increasing demand for electrification and the decarbonization of non-power sectors.

The rapid growth of artificial intelligence further amplifies the need for reliable, full time electricity capacity.

Delivering a reliable, affordable and equitable transition requires all scaleable low-carbon technologies, including nuclear. The inclusion of nuclear energy in the first Global Stocktake at the 2023 United Nations Climate Change Conference (COP28) is clear evidence of this growing acknowledgement.

Meanwhile, the Global Future Council on Energy Technology Frontiers, of which I am a member, has highlighted exactly this challenge: balancing scaleable solutions across security, equity and sustainability requires that technologies such as nuclear energy not be relegated to the margins but rather be integrated into energy innovation roadmaps.

Nuclear energy brings a unique set of strengths that make it a vital part of the clean energy transition:

Small modular reactors (up to 300 megawatt electrical units) are moving from promise to reality with over 80 designs in progress. According to the IAEA’s 2024 small modular reactor report, 68 of these designs are making tangible progress.

They are categorized as land-based light-water, marine-based, high-temperature gas-cooled, fast-neutron and micro-reactors, with non-water-cooled designs accounting for two-thirds of the total.

Small modular reactors offer several potential advantages, including enhanced inherent safety features, operational flexibility and high efficiency. Some high-temperature designs can support industrial decarbonization by providing process heat, while others are well-suited for load-following and remote or off-grid applications.

Their modular nature has the potential to reduce upfront costs, shorten construction timelines and lower project risks, making them particularly attractive to emerging markets and developing economies.

Currently, four small modular reactors are operational in Russia, China and Japan, with four more under construction in Argentina, China and Russia. Additionally, some designs in Canada, the US and Europe are nearing deployment.

To accelerate the deployment of nuclear energy and realize its full potential, key barriers must be addressed:

Achieving these ambitious goals demands a strong synergy between public and private finance. The World Bank’s recent decision to reopen its doors to nuclear projects sends a strong signal to the global community, a move that several other multilateral development banks are preparing to follow. This trend is particularly meaningful for emerging markets and developing economies, which often face the greatest financing hurdles.

In its work, the Global Future Council on Energy Technology Frontiers has called for new financing architectures – blended finance, risk-sharing vehicles and global cooperation – to overcome the capital barriers faced by large-scale, first-of-a-kind energy projects, especially in emerging economies.

Despite the growing recognition of nuclear power as an indispensable solution to compounding global climate and energy crises, public scepticism persists. This scepticism, primarily rooted in concerns over safety and radioactive waste, still exists.

A systematic, data-driven approach to engaging all stakeholders, including policymakers, regulators and local communities, is key to addressing these misconceptions.

Since COP28, momentum behind nuclear energy has only strengthened. This was reinforced by the landmark agreement between the IAEA and the World Bank this June. An ecosystem is being built to unlock the full potential of nuclear power. Yet this is no time for complacency.

The international community must continuously mobilize all available measures and tools to support this goal. IAEA flagship initiatives such as the Nuclear Harmonization and Standardization Initiative, the SMR Platform and the Atoms4NetZero initiative are making important contributions. Yet, more action is urgently needed.