Fourteen of the world’s largest banks and financial institutions, including Bank of America, Citi, Parabas, Morgan Stanley, Goldman Sachs and Abu Dhabi Commercial Bank, are pledging to increase their financial support and backing for nuclear energy. This announcement was made at an event held in New York City during Climate Week, in a long-awaited recognition by these financial institutions that the nuclear sector has a critical role to play in the transition to low-carbon energy and provided direct support of COP28’s pledged goal of a global tripling of nuclear power.
The announcement occurred at a gathering in the Rockefeller Center, which brought together heads of state, ministers, and top executives from the nuclear and finance sectors. John Podesta, White House climate policy adviser, introduced the sesion by saying, “Our mission is clear: to ensure nuclear energy plays its role in building a sustainable, secure future. If we work together, we can make nuclear a cornerstone of our climate strategy.”
The banks did not commit to any specific funding but their pledge is an acknowledgement that the availability of funding is critical in the transition to low-carbon energy. In particular, high financing costs have been an obstacle to the construction of new plants and lack of availability of funding interest contributed to the decline in new projects for most of the last four decades. with the majority of the world’s reactors built in the 1970s and 1980s.
We believe that this new bank pledge is a reflection of the demand inflection point that nuclear is experiencing, with increasing customer interest demonstrating the value that nuclear has for both reliable energy and carbon-free energy. Banks are increasingly aware that, rather than being controversial, nuclear power is becoming increasingly popular, especially for those fully committed to decarbonization.
Bank of America has already begun to recommend nuclear investments for its clientel, having previously issued its “Nuclear Necessity” report. It will naturally follow, then, that BofA and other banks that have done their homework, will be willing to provide direct lending, project finance and investment banking support to utilities and other nuclear companies looking to deploy new nuclear generation.
This announcement should help to shift attitudes at other international and multilateral agencies, such as the World Bank and IMF, which still do not provide any finance to nuclear projects. What is becoming increasingly clear is that there is virtually no scenario in which the world can achieve carbon neutrality by 2050 without nuclear power, according to the UN’s Intergovernmental Panel on Climate Change. These banks have heard that message and are ready to deal.
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Sources
Financial Times, World’s biggest banks pledge support for nuclear power, by Lee Harris and Malcolm Moore, September 22, 2024
World Economic Forum, Center for Energy & Materials, World’s biggest banks back nuclear power, and other top energy stories, Roberto Bocco, updated Oct. 9, 2024.
Environmental Energy Leader, 14 Major Banks Pledge Support to Triple Nuclear Capacity by 2050: Leading financial institutions unite to accelerate global nuclear energy expansion, September 24, 2024.