## Is the IAEA–World Bank Nuclear Partnership Delivering After One Year?

One year in, the IAEA–World Bank Group partnership on nuclear energy has produced technical workshops and staff briefings — but no confirmed financing commitments for new nuclear capacity in developing countries. The partnership, formed weeks after the World Bank Group (WBG) formally reversed its nuclear investment ban in June 2025, was designed to unlock multilateral development bank funding for [small modular reactors](https://smrintel.com/glossary/foak) and life-extension of existing fleets. The most concrete pipeline item reported to date: Reuters reported in May that WBG is in exploratory talks with Eskom, South Africa's state power utility, over a potential multibillion-dollar nuclear investment covering up to 5,200 megawatts of new capacity. No deal has been announced.

The structural shift the partnership represents — moving the world's largest development lender from a formal nuclear prohibition to active pursuit of SMR deployment in emerging markets — is significant. But one year of relationship-building activity should not be confused with project finance.

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## From a $40 Million BWR Loan in 1959 to a 66-Year Gap

The World Bank's nuclear history is almost entirely contained in a single transaction. On September 16, 1959, WBG issued a $40 million loan — roughly $477 million in 2026 dollars, per the ANS source — to fund construction of the Garigliano nuclear power station in Italy, including approximately 60 miles of transmission lines and a substation. The project followed a 1957 joint study between WBG and the Italian government.

Garigliano entered commercial operation in May 1964, powered by a 160-MWe [boiling water reactor](https://smrintel.com/glossary/bwr). Its operational record was poor: a February 1970 *Nuclear News* article cited 24 unscheduled shutdowns, seven feedwater heater leakages, and significant CRUD deposition on fuel elements across just three operating cycles. By 1978, Garigliano became Italy's first commercial nuclear plant to shut down permanently. A post-Chernobyl referendum in 1987 closed the remainder of Italy's fleet.

WBG issued no further nuclear loans in the following decades, and in 2013 formalized that practice as an explicit policy ban. The June 2025 reversal — in which WBG president Ajay Banga stated the group would "support efforts to extend the life of existing reactors in countries that already have them" and "work to accelerate the potential of Small Modular Reactors — so they can become a viable option for more countries over time" — ended a 66-year drought in World Bank nuclear lending.

The historical lesson from Garigliano is worth keeping in mind: the gap between a multilateral loan commitment and successful commercial nuclear operation involves substantial technical, regulatory, and operational execution risk. Developing-country deployments will face those same challenges, compounded by weaker nuclear regulatory infrastructure, limited domestic fuel cycle capacity, and nascent workforce pipelines.

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## What the One-Year Update Actually Contains

The IAEA's update, published July 9, 2026, describes a set of relationship-building and capacity-building activities across three areas:

**Technical knowledge transfer.** IAEA Director General Rafael Mariano Grossi has briefed senior WBG officials, and the IAEA has held information sessions with broader WBG staff. Several technical meetings have been convened covering safety aspects of long-term operation and key elements needed to assess WBG financing for nuclear activities.

**Multilateral development bank outreach.** The IAEA hosted a workshop at its Vienna headquarters aimed at drawing other multilateral development banks into the conversation. Participants included senior experts from the European Bank for Reconstruction and Development, the Asian Development Bank, and the OPEC Fund for International Development. The discussion focused on how those institutions might finance "the technical groundwork that is often needed before decisions to invest in nuclear energy can be made."

**Three formal pillars of cooperation.** The partnership's remit covers expanding WBG's technical expertise in nuclear safety, safeguards, fuel cycles, regulatory frameworks, and waste management; supporting reactor life-extension programs; and expediting SMR deployment in developing countries.

What is absent from the update is equally notable: no project-specific financing terms, no country mandates beyond the Eskom exploration reported separately by Reuters, and no timeline commitments for [first-of-a-kind](https://smrintel.com/glossary/foak) deployments.

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## Why the Eskom Conversation Matters

The reported WBG–Eskom exploratory talks represent the most tangible near-term test case. South Africa already operates Koeberg, a two-unit pressurized water reactor station, giving the country an existing regulatory framework and operational experience — factors that reduce the standing-start risk that would characterize a genuinely greenfield nuclear program in a country with no prior fleet.

A potential investment covering up to 5,200 MWe of new capacity would be a large-scale commitment by any standard. For context, that volume would represent multiple large reactor units or a substantial portfolio of SMR deployments, depending on technology selection. No vendor, technology, or financing structure has been publicly confirmed for that program.

The involvement of the Asian Development Bank and OPEC Fund in the Vienna workshop suggests WBG is also exploring Southeast Asian and Gulf-adjacent markets, where energy demand growth is rapid and grid infrastructure investment is already substantial.

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## The Broader Industry Implication

For SMR developers targeting emerging-market deployments, WBG's re-engagement is structurally important — multilateral development bank backing reduces sovereign financing risk and can unlock co-investment from commercial lenders who will not move on nuclear projects without a credible anchor institution. The IAEA's role as a technical validator is equally critical: WBG lending decisions on nuclear projects will require third-party safety and regulatory assessments that WBG's own staff cannot currently provide independently.

The risk is that the partnership remains in pre-investment technical assistance mode for years while actual SMR projects that could benefit from this financing continue to struggle with capital access. The credibility of the partnership will ultimately be measured by how quickly it moves from workshops to term sheets.

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## Key Takeaways

- The IAEA–World Bank nuclear partnership reached its one-year mark with technical workshops and staff briefings but no confirmed project financing.
- WBG formally reversed its nuclear investment ban in June 2025 after a 66-year gap since its only prior nuclear loan — a $40 million (approximately $477 million in 2026 dollars) commitment to Italy's Garigliano plant in 1959.
- The most active near-term pipeline item is WBG's exploratory talks with Eskom over a potential multibillion-dollar investment covering up to 5,200 MWe of new South African nuclear capacity, per Reuters.
- The IAEA hosted a multilateral development bank workshop in Vienna drawing in the European Bank for Reconstruction and Development, the Asian Development Bank, and the OPEC Fund for International Development.
- The partnership's three pillars cover nuclear safety expertise expansion at WBG, reactor life-extension support, and SMR deployment facilitation in developing countries.
- One year of relationship-building is a normal gestation period for multilateral finance mechanisms — the test is whether technical groundwork translates into project mandates in year two.

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## Frequently Asked Questions

**Why did the World Bank stop funding nuclear power?**
WBG issued no nuclear loans after its 1959 Garigliano commitment and formalized that practice as an explicit ban in 2013. The institution reversed that policy in June 2025 under president Ajay Banga, who indicated WBG would support reactor life extension and SMR deployment in developing countries.

**What is the IAEA–World Bank nuclear partnership?**
A cooperation agreement entered into weeks after WBG's June 2025 nuclear policy reversal. It covers three areas: building WBG's technical nuclear expertise, supporting life extension of existing reactors in developing countries, and expediting SMR deployment. The IAEA functions as the technical knowledge provider while WBG provides financing capacity.

**Which countries might receive World Bank nuclear financing?**
South Africa is the most publicly cited candidate, with Reuters reporting exploratory talks between WBG and state utility Eskom over a potential investment covering up to 5,200 MWe of new capacity. The IAEA workshop in Vienna also engaged the Asian Development Bank and OPEC Fund, suggesting Southeast Asian and Gulf-adjacent markets are under consideration.

**What was the Garigliano nuclear power plant?**
Italy's first WBG-financed nuclear project and, to date, WBG's only nuclear loan recipient. The 160-MWe boiling water reactor entered commercial operation in May 1964 and shut down permanently in 1978 following an operationally troubled history. Italy subsequently closed its remaining nuclear fleet after a post-Chernobyl referendum in 1987.

**What does the World Bank nuclear partnership mean for SMR developers?**
MDB backing can function as a critical credit anchor for SMR projects in emerging markets, reducing sovereign risk and unlocking commercial co-investment. However, WBG's current activity remains in the technical groundwork phase. Developers targeting developing-country deployments should monitor the Eskom process as the leading indicator of whether the partnership moves from capacity-building to actual project finance.