US development bank proposes end to nuclear finance ban

11 June 2020

The US International Development Finance Corporation (DFC) has proposed policy changes that would remove a prohibition on it providing support for nuclear power projects. This would enable the DFC to offer financing for projects to deploy technologies such as small modular reactors (SMRs) in developing countries.

(Image: Angelique Johnson)

The DFC is the USA's development bank. In partnership with the private sector, it finances solutions to challenges facing developing countries, and invests across a range of sectors including energy, healthcare, critical infrastructure and technology projects.

The DFC's existing Environmental and Social Policies and Procedures categorically prohibits it from investing in the production of, or trade in, radioactive materials, including nuclear reactors and their components. DFC is now proposing the removal of that prohibition, which does not apply to medical equipment, quality control equipment or other equipment containing a "trivial" and adequately shielded radioactive source. It has now launched a 30-day public notice and comment period on the proposal.

"Modernising DFC's policy to offer financing for nuclear projects supports the agency's development mandate, bolsters US foreign policy, and recognises advances in technology which could make nuclear energy particularly impactful in emerging markets," DFC said. Advanced nuclear technologies which are now being developed and deployed in the USA, including SMRs and microreactors, will have significantly lower costs than traditional nuclear power plants, and may be well suited for developing countries, it said.

"The proposed change could help deliver a zero-emission, reliable, and secure power source to developing countries, promoting economic growth and affordable energy access in underserved communities," DFC said. It could also offer "an alternative to the financing of authoritarian regimes" while advancing US non-proliferation safeguards and supporting US nuclear competitiveness.

The proposed change would implement a recommendation made earlier this year in the by the US Nuclear Fuel Working Group (NFWG), which said the nation's financing institutions should support the civil nuclear industry to compete against foreign state financing as a measure to increase the competitiveness of US nuclear exports. According to the NFWG, the country which is "entirely absent" from global nuclear new-build is missing out on a nuclear reactor market that the US Department of Commerce estimates is worth USD500-740 billion over the next 10 years.

Maria Korsnick, president and CEO of the Nuclear Energy Institute, said the DFC's policy change would support the development of clean, reliable energy worldwide, help countries reach their energy development goals, buttress national security and help level the playing field for US firms.

"An increasing number of countries around the world that meet DFC's project criteria are looking to build new reactors or expand existing nuclear energy programmes," she said. "Partnering with US companies would position countries to provide long-term clean, reliable energy for electricity grids, desalination, and other applications. In addition, these partnerships will forge long-term strategic economic and security relationships with the United States that can last 100 years."

The ability to offer financing solutions was highlighted earlier this week by US Assistant Secretary for the Office of Nuclear Energy Rita Baranwal. Speaking during a Special Session on US Global Leadership in Nuclear Energy and National Security at the American Nuclear Society's annual meeting, she identified the ability to offer attractive financing options as one of two areas of deficiency which the government could address to support US exports, the other being the ability to take back used nuclear fuel.

"We really need to be offering a comprehensive global package to countries that really do want to deploy US technology," she said.

Researched and written by World Nuclear News