Non-Military Security

Nuclear as a green solution? International banks are still reluctant to invest in new projects

Bianka Niňajová

World leaders met for the first-ever nuclear summit in Brussels, Belgium, co-organised by the Belgian government and the International Atomic Energy Agency (IAEA). 34 countries, including the pro-nuclear states of the EU, the United States, the United Kingdom, China, Japan and Saudi Arabia, are calling for a renewed source of nuclear energy in a bid to achieve climate neutrality. “This historic summit will build on the momentum of COP28, where the world finally agreed it must invest in nuclear energy to meet its climate goals,” stressed IAEA Director General R. Grossi. In a joint statement, the participating countries talked about the need to include nuclear energy in the energy mix, as well as about better financing for nuclear energy and new global investments. The President of the European Commission, Ursula von der Leyen, who also spoke at the summit in Brussels, spoke about the need to accelerate investment and ensure the availability of financing. She added that the future of nuclear ” depends on the industry’s ability to deliver on time and on budget.”

The world’s multilateral banks will also have to be involved in the process of greater integration of nuclear power in the world’s economies and in the construction of new plants. However, the World Bank, the Asian Investment Bank and the European Investment Bank are all reluctant to finance nuclear projects. They mostly refer to the lack of research and concerns about the risks of nuclear energy. The vice president of the European Investment Bank (EIB), the largest public financial institution in the world, T. Östros, explained that the risk of nuclear projects is too high for the bank. The EIB has financed eight nuclear projects since 2000, worth more than a billion euros, but this is only a fraction of what the bank has invested in renewable energy. In 2021 alone, it has lent more than €10 billion to renewable energy projects. The bank has confirmed that it wants to continue to support renewable energy. It did not confirm any investment in nuclear power development. However, European institutions and many union countries believe that rising support for nuclear will force the investment bank to change its long-term strategy. 

The reluctance of investment banks to finance nuclear power projects is also a consequence of previous negative experiences with nuclear power. Symbolically, the Nuclear Summit meeting took place next to the construction of the Atomium, the symbol of the peaceful use of nuclear energy. But the nuclear industry has a terrible history. In 1986, one of the reactors at the Chornobyl power plant in Ukraine exploded. The radioactive cloud that spread over Europe and parts of Asia caused much damage. In 2011, an earthquake and tsunami caused damage to the Fukushima nuclear power plant in Japan, contaminating the atmosphere and ocean water. Germany responded immediately to this accident by shutting down six nuclear reactors. Fearing the potential risks of nuclear use, the German Parliament voted to completely remove nuclear power from the energy mix, which was done last April when the last three operating reactors were also shut down. Germany thus joined a pair of European countries, Italy and Lithuania, which decided to completely stop generating electricity from nuclear power despite having their own nuclear power plants.

Nuclear has become a controversial energy source that has divided the European continent into two camps. While nuclear opponents, led by Germany and Austria, argue that nuclear waste can be a threat to the environment, the other group of states argues that nuclear power is one of the cleanest sources of energy because it does not cause greenhouse gas emissions. The worsening climate crisis, coupled with the current geopolitical situation, has reopened the question of the use of nuclear energy. EU leaders are talking about the potential of nuclear energy to decarbonise the energy sector and provide affordable electricity. France, the European powerhouse in nuclear power generation, produces up to around 70% of its electricity from nuclear power and has long pointed to the positives of nuclear power in the context of climate change. In addition, Emmanuel Macron announced in 2022 a plan to build another six new reactors with a total value of 52 billion euros, which should be completed by 2028.

Other European countries have also joined France’s initiative to support nuclear development. The declaration of the nuclear summit was signed by a total of 13 countries of the European Union. Among them, in addition to France, are Belgium, the Netherlands, Finland, Sweden, Bulgaria, Slovenia, Croatia, Hungary, the Czech Republic and Poland. There was also Slovakia, which has been among the pro-nuclear states for a long time. Prime Minister Robert Fico said in Brussels that the country plans to build a new block of nuclear power plant. Currently, there are two such power plants operating in Slovakia, which last year were able to produce approximately 87% of electricity. The subject of nuclear power has also provoked many controversial opinions in Italy. However, Deputy Prime Minister Tajani confirmed at the summit that the country’s nuclear future is once again becoming a subject of debate. Italy thus finally joined a total of 32 signatories to the declaration. All of the European countries mentioned, with the exception of Italy, have also recently formed a new European industrial alliance to speed up the production and deployment of so-called small modular nuclear reactors. Such reactors should be more economical and faster to produce.

However, the initial investment for the construction of nuclear power plants is very high. This is where the European Investment Bank could play a role. While the EIB has recognised the importance of the nuclear sector with the arrival of its new director, it needs the agreement of all EU Member States to be able to release investment for nuclear projects. In the current situation, this could be a major obstacle, as countries such as Germany and Austria are fiercely opposed to the use of nuclear energy. Some environmental organisations are also on their side. According to activists from Greenpeace, nuclear power plants take many years to build, and the projects are often overpriced, which makes the construction itself longer. Power stations produce radioactive waste, which, if not disposed of safely, endangers human health and the environment. However, surveys indicate a growing positive perception of nuclear energy across all the countries of the European Union. The fact is that nuclear energy appears to be a more efficient solution than some renewable sources. Unlike solar or wind sources, which are dependent on meteorological conditions, nuclear power plants operate independently.

Nevertheless, the debate on the use of nuclear energy divides society.  Many countries and institutions highlight the benefits of nuclear power in terms of energy sustainability. For now, the question remains whether world banks will also open up to such investments.

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