HOUSTON: Amin Nasser, chief executive of Saudi Aramco, said the oil and gas industry must “push back” against suggestions that oil demand is in long term decline and that Saudi energy assets will be left “stranded” in the ground as alternative energy sources are developed.
In a keynote address at the CERAWeek by IHS Market gathering of top energy experts in Houston, Texas, Nasser also warned that the oil market faces “multiple downside political risks,” and needs $20 trillion of investment over the next 25 years — the size of the American economy.
He was speaking on the 80th anniversary of the discovery of oil in Saudi Arabia, when American geologists found significant reserves of crude in Dhahran, which led to the creation of Saudi Aramco.
“Today I want to be clear about what really lies ahead for our industry, and the actions we must take to secure that future,” he said.
“We must leave people in no doubt that misplaced notions of ‘peak oil demandʼ and ‘stranded resourcesʼ are direct threats to an orderly energy transition and energy security,” he said, adding: “Oil and gas will continue to play a major role in a world where all energy sources will be required for the foreseeable future.”
On the current oil market, he said market fundamentals were healthy. “Despite recent volatility in the financial markets, the broad-based recovery in the global economy remains on track. It is particularly encouraging to see expectations of stronger economic growth in the emerging and developing world because that is where most oil demand growth is expected to be. Oil demand globally also remains healthy,” he said.
Nasser pointed to flaws in all the various alternatives that have been advocated as future energy sources.
“The hot topic in energy transition is the future role of oil in transport. At the heart of it is the light duty road passenger vehicles segment (cars) that accounts for about 20 percent of global oil demand today. Many wrongly believe that it is a simple matter of electric vehicles quickly and smoothly replacing the internal combustion engine,” he said.
The future for alternatives to the motor car and internal combustion engine was “far more complex,” he said.
“In fact, there are five strong technology horses racing each other to become the powertrain of the future — advanced internal combustion engines; hybrid electric vehicles; plug-in hybrid vehicles; pure battery electric vehicles; and hydrogen fuel cell vehicles. The first three are powered by an internal combustion engine. And let us not forget that more than 99 percent of the passenger vehicles on the road today have an internal combustion engine and will be with us for a long time,” he pointed out.
The transformation of the motor industry was still unclear, Nasser said. “In fact, some of the most disruptive technologies are only just emerging, including highly advanced integrated engine-fuel systems like the ones our researchers are working hard on at Saudi Aramco in collaboration with car and truck engine manufacturers.
“So, given the world’s focus on climate change, there should be a global priority on improving the efficiency and lowering carbon emissions from internal combustion engines as well as fuels, especially when the other two horses in the race — pure battery electric vehicles and hydrogen fuel cell vehicles — still face a range of problems,” he added.
There were other factors that further complicated the search for oil alternatives. “There are also major hurdles before alternatives can be deployed at scale. Affordability is one, as customers continue to place great importance on up-front costs, especially in developing nations. Another is that it will become increasingly difficult for governments to subsidize such enormous numbers, although this is often glossed over,” Nasser said.
“It will require massive infrastructure, which is particularly challenging in developing nations as they are least well-equipped and can least afford this in the face of other economic and social priorities. Yet the majority of vehicle growth will be in those very same nations.”
Analysts estimate that traditional motor car usage accounts for 20 percent of global oil demand, but that figure is complicated by future demographic trends.
“Further adding to the complexity will be the extra two billion people on the planet by 2050, a world economy three times its current size., and a global middle class that will reach five billion by 2030 – with two-thirds of it in Asia driving consumption. These macro factors will only grow demand for road passenger transport,” Nasser said.
“So, yes, battery electric vehicles will grow and have a welcome role to play in global mobility. But given the competition and complexity of the transition, their impact on the 20 percent oil demand should not be exaggerated,” he added.
The rest of the demand side presented great opportunities for oil producers, he said. “In petrochemicals alone, oil use is expected to increase by almost 50 percent, while the number of air passengers each year is expected to almost double to 8 billion over the coming two decades.”
There were also new outlets being developed for Aramco products, he insisted. “For example, Saudi Aramco recently signed an agreement centered on a potential breakthrough technology that will directly convert up to 70 percent of a barrel of crude into petrochemicals.
“This could transform the role of oil as a major petrochemical feedstock, substantially lighten the carbon footprint of oil consumption because of its non-combustible nature, and reduce costs by 30 percent, and become a large and reliable outlet for our future oil production,” he said.
“I also see huge potential in producing advanced materials for use in a wide range of high growth industries. Just imagine a future where skyscrapers, cars (including electric ones!), and even our own pipelines are built with these advanced oil-based materials.
“Looking further ahead, if we combine hydrogen from oil with carbon capture, utilization, and storage then green hydrogen comes within reach – not only for transport but also power and heat,” he added.
Oil and gas will continue to play a major role in a world where all energy sources will be required for the foreseeable future.
But he insisted that the energy industry needed action in four main areas to enable it to face the future:
“First, we need to expand exploration. Last year, only 7 billion barrels equivalent of oil and gas combined were discovered, which is among the lowest on record.
“Second, we must not only meet the growth in oil demand but also offset a large natural decline in developed oil fields. Even conservative estimates suggest about 20 million barrels per day of new capacity is required over the next five years,” Nasser said
“Third, our industry needs more than 20 trillion dollars over the next quarter century to meet rising demand for oil and gas (including in aging infrastructure). That is virtually the size of the US economy, and we have already lost 1 trillion dollars of investments since the downturn.
“This staggering amount will only come if investors are convinced that oil will be allowed to compete on a level playing field, that oil is worth so much more, and that oil is here for the foreseeable future,” he said.
“That is why we must push back on the idea that the world can do without proven and reliable sources. We also need an environment that encourages long-term investments, as we are seeing here in the United States, and in Saudi Arabia with our ambitious Vision 2030,” Nasser added.
Finally, he said, we need to intensify our efforts to both enhance current technologies as well as create new, game-changing ones. That requires us to devote more resources to longer term research, particularly low-to-no carbon products. And it means regulators must be policy holistic and technology agnostic – let the market decide,” he said.
‘Oil and gas will continue to play a major role in the world,’ says Aramco’s Nasser
‘Oil and gas will continue to play a major role in the world,’ says Aramco’s Nasser
Closing Bell: Saudi Arabia’s main index declines to close at 10,840
RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Thursday, falling 164.08 points, or 1.49 percent, to end the session at 10,840.94.
Trading turnover on the main index reached SR5.34 billion ($1.42 billion), with only 14 stocks recording gains while 238 declined.
The Kingdom’s parallel market, Nomu, also saw a downturn, losing 425.57 points, or 1.56 percent, to close at 26,798.14. A total of 28 stocks advanced while 63 retreated. The MSCI Tadawul 30 Index slipped 13.42 points, or 0.95 percent, to finish at 1,392.04.
SEDCO Capital REIT Fund emerged as the session’s best performer, with its share price rising 0.88 percent to SR6.85. Fawaz Abdulaziz Alhokair Co. followed with a 0.71 percent gain to SR19.84, while Tihama Advertising and Public Relations Co. rose 0.67 percent to SR15.10.
On the downside, Al-Omran Industrial Trading Co. recorded the steepest loss, falling 9.15 percent to SR26.30. AYYAN Investment Co. dropped 7.35 percent to SR12.60, and Al Taiseer Group Talco Industrial Co. declined 7.26 percent to SR40.85.
On the announcements front, the Saudi National Bank announced plans to issue US dollar-denominated notes under its Euro Medium-Term Note Program.
According to a Tadawul filing, the issuance will be conducted through a special purpose vehicle and will be offered to eligible investors in Saudi Arabia and globally.
The bank has appointed Abu Dhabi Commercial Bank PJSC, DBS Bank Ltd., Emirates NBD Bank P.J.S.C., Goldman Sachs International, HSBC Bank plc, J.P. Morgan Securities plc, Mashreqbank psc, and Mizuho International plc as joint lead managers and book-runners.
SNB Capital Co., SMBC Bank International plc, and Standard Chartered were also mandated. The proceeds from the offering will be used to enhance Tier 2 capital, support general corporate purposes, and advance SNB’s strategic goals.
Final terms of the issuance will be determined based on market conditions. SNB shares edged up 0.14 percent to close at SR34.70.
Meanwhile, Yaqeen Capital Co. announced it has deposited proceeds from the sale of fractional shares following a recent capital increase. A total of 308 shares were sold, generating SR3,451.76, with an average price of SR11.23 per share. The proceeds have been distributed to eligible shareholders via their investment-linked accounts.
Saudi-UK ties deepen as 400+ leaders boost investment partnerships in London
JEDDAH: Saudi-UK business ties are set to grow as more than 400 leaders from various sectors gathered in London to explore cross-border investment opportunities and strengthen economic partnerships.
Minister of Investment Khalid Al-Falih led the Kingdom’s delegation at the UK-Saudi Investment and Partnership Summit held on June 11 at Mansion House in London’s financial district.
The Kingdom and the UK are strengthening economic ties, with bilateral trade hitting $21.6 billion in 2023 and a shared target of $37.5 billion by 2030, driven by the UK-GCC Free Trade Agreement negotiations and the UK’s GREAT Futures campaign.
Investment flows remain strong, with Saudi Arabia investing over $21 billion in the UK since 2017, including $3.5 billion in the northeast, while UK foreign direct investment in the Kingdom reached $13 billion by 2023.
Organized by the UK-British Joint Business Council and hosted by the City of London Corp., the summit was supported by the Saudi Ministry of Investment and the UK Department for Business and Trade, the Saudi Press Agency reported.
According to Al-Falih, the Kingdom and the UK share a bold vision for global leadership and a longstanding legacy of international trade.
“More than 30,000 UK British professionals reside in Saudi Arabia, and British investment in the Kingdom exceeds £14 billion, reflecting the bright future of the partnership between the two countries,” the minister said in a post on his X handle.
Al-Falih delivered the keynote speech, highlighting investment opportunities in infrastructure, financial services, and the green economy, as over 400 leaders gained insights into evolving markets and emerging investment trends.
The minister also engaged in a high-level ministerial dialogue with UK Investment Minister Baroness Poppy Gustafsson, highlighting the evolution of the strategic relationship and the countries’ shared outlook for the future.
“Today, I met with our UK partners— including Baroness Poppy Gustafsson, minister of investment; His Excellency Ambassador of the UK to Saudi Arabia Neil Crompton; and the Rt Hon. Lord Mayor of London, Alastair King— to discuss enhanced investment cooperation and partnership between our great nations,” Al-Falih said in a post on X.
In a separate post, the Saudi minister said: “At the historic Mansion House in the City of London, I spoke to an elite group of global investors, inviting them to explore the exceptional opportunities offered by Saudi Arabia. I shared insights into our future investment prospects, particularly in mutually prioritized sectors.”
In his speech, the minister discussed progress under the Mansion House Accord — a UK-led initiative to unlock up to £50 billion ($63.5 billion) in domestic investment from pension funds into high-growth sectors.
Panel discussions addressed joint development priorities aligned with Saudi Arabia’s Vision 2030 and the UK’s industrial strategy, Invest 2035 — the UK government’s 10-year plan to provide certainty and stability for investments in high-growth sectors driving national growth.
Key topics included expanding public-private partnerships, mobilizing capital for large-scale infrastructure and real estate projects, supporting venture capital ecosystems, and harnessing frontier technologies such as deep tech, space, and clean innovation.
The Saudi Ministry of Investment noted that the summit agenda was designed to encourage practical dialogue, facilitate cross-border investment flows, and accelerate economic diversification through sustainable, forward-looking partnerships.
The London meetings followed the launch of the UK-Saudi Sustainable Infrastructure Assembly in May, a platform uniting companies, policymakers, and experts from both countries to shape the future of investment in infrastructure.
The assembly is part of the UK government’s “Great Futures” campaign, which promotes bilateral cooperation in trade, investment, tourism, education, and culture. A concluding meeting is planned for the Future Investment Initiative in Riyadh this fall.
New Saudi offices in the UK, including those of the Public Investment Fund subsidiaries, NEOM, and Elm, alongside 52 UK firms establishing regional headquarters in Riyadh, further highlight expanding cross-border engagement.
Both nations also collaborate in areas such as energy, financial services, education, and green technologies. London has become a preferred hub for Saudi capital, with $69.9 billion raised since 2022 — $13.8 billion of which targeted sustainable finance.
Bahrain’s Islamic finance industry projected to surpass $100bn in 3 to 5 years
RIYADH: Bahrain’s Islamic finance industry is likely to surpass $100 billion within the next three to five years, according to global credit rating agency Fitch Ratings.
This growth will be fueled by the need for diversification and funding, partly addressed through sukuk, as well as a favorable regulatory environment and ongoing mergers and acquisitions, according to a statement.
This aligns with Bahrain’s banking sector assets to GDP ratio, which was estimated at 516 percent in 2024, indicating a highly concentrated and competitive market that presents significant challenges for both Islamic and conventional banks.
The debt capital market is primarily made up of government-issued sukuk and bonds, with limited participation from corporations and financial institutions.
This is also reflected in the fact that as of the first three months of 2025, Bahrain’s Islamic finance industry was valued at over $80 billion, with Islamic banking assets making up 78 percent, sukuk accounting for 19.2 percent, and the remaining 2.8 percent coming from Shariah-compliant investment funds and takaful firms.
The newly issued Fitch statement said: “Sukuk are substantial to Bahrain’s DCM (debt capital markets), comprising 32.5 percent of DCM outstanding (all currencies) as of end-1Q25 … In 2024, sukuk issuances grew by 36.2 percent yoy (year-over-year), with sovereign issuers representing about 90 percent of Bahrain’s sukuk issuances.”
It added: “Bahrain has notable access to the global DCM, with US dollar-denominated DCM comprising about 70 percent of the total, and dollar-denominated sukuk comprising nearly 90 percent of sukuk outstanding. The anticipated lower oil prices … upcoming government debt maturities and sizeable investors, including Bahraini and other GCC (Gulf Cooperation Council) Islamic banks, could encourage sukuk issuance.”
The statement further indicated that the agency rates 80 percent of the country’s US dollar sukuk outstanding as of the end of the first quarter of 2025, with 94.6 percent in the “B” rating category and 5.4 percent in the “BB” rating category.
It further disclosed that most sukuk issuers carry negative outlooks, reflecting Fitch’s downgrade of Bahrain’s outlook from stable to negative in February. The country has maintained its payment record on sukuk and bonds, with only one issuer launching ESG sukuk and no ESG bonds issued from the country.
“Bahrain continues to host Islamic finance industry setting bodies like the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) and IIFM (International Islamic Financial Market). The draft AAOIFI Shariah Standard 62 has had no impact on Bahraini Islamic banks’ or sukuk ratings so far. However, there is a lack of clarity around the standard’s final scope and implementation,” the statement said.
It added that in the first quarter of 2025, Bahraini Islamic banks’ domestic assets saw an annual rise of 7.5 percent, outpacing conventional banks’ 3.4 percent.
They also increased their share of domestic banking assets to 41.4 percent in what was a 1 percentage point rise from the same quarter of 2024.
Fitch said this was partly due to Ahli United Bank’s conversion to an Islamic bank.
Islamic banks’ foreign assets decreased by 7.6 percent, while conventional banks’ increased by 6 percent, reducing the former’s share of total industry assets to 25.4 percent from 26.1 percent in the first quarter of 2024.
The Central Bank of Bahrain has introduced a draft netting law that includes Islamic derivatives, sukuk, digital asset derivatives, and carbon credit derivatives under qualified financial contracts — aimed at strengthening market participants’ confidence.
In June 2024, the CBB also launched a Shariah-compliant commodity Murabaha facility to help Islamic banks better manage surplus liquidity.
Bahrain’s Islamic finance projections come as other countries in the region also report relatively strong performance in the sector.
Earlier this month, a report from Qatar-based Bait Al Mashura Finance Consultations showed that Qatar’s Islamic finance sector continued its upward trajectory in 2024, with total assets rising 4.1 percent year on year to 683 billion Qatari riyals ($187.5 billion).
The analysis showed at the time that Islamic banks held the largest share, with 87.4 percent of total Islamic finance assets.
In April, S&P Global Ratings said in its outlook report that Saudi Arabia is poised to play a key role in propelling the growth of the global Islamic finance industry in 2025, underpinned by non-oil economic expansion and robust sukuk issuance, according to a new analysis.
The Kingdom’s banking system growth, supported by Vision 2030 initiatives, is expected to contribute significantly to the expansion of Islamic banking assets next year, the S&P report said at the time.
Uzbekistan keen to collaborate with Saudi Arabia on environmental protection: top official
RIYADH: Uzbekistan’s cooperation with Saudi Arabia on ecology and environmental protection is steadily progressing, with the Central Asian nation aiming to deepen this partnership through the exchange of knowledge and innovation, a top official said.
Speaking to Arab News on the sidelines of the Tashkent International Investment Forum, Uzbekistan’s Minister of Ecology, Environmental Protection and Climate Change Aziz Abdukhakimov said that the country wishes to collaborate with the Kingdom to develop effective solutions to issues including dust and sand storms.
Saudi Arabia is spearheading climate action efforts across the Middle East, with ambitions to plant 10 billion trees, rehabilitate 40 million hectares of degraded land, and reduce carbon emissions by more than 278 million tonnes per year.
“Our cooperation with the Kingdom of Saudi Arabia in the field of ecology and environmental protection is both dynamic and built on the principles of mutual respect and cooperative spirit. Within the framework of the Intergovernmental Commission between our two countries, we maintain a regular and constructive dialogue, exchanging views on the current state of cooperation and discussing long-term priorities between our environmental agencies. We also explore new avenues of cooperation,” said Abdukhakimov.
He added: “We envision cooperation between our national parks and protected natural areas. Saudi Arabia currently has over 70 protected areas, covering nearly 18 percent of its territory. By sharing expertise in ecosystem preservation and species protection, we can strengthen conservation efforts on both sides.”
The minister further said that such collaborations will allow the exchange of expertise in preserving unique ecosystems and rare species of flora and fauna.
Abdukhakimov added that Uzbekistan’s Central Asian University of Environmental and Climate Change Studies is seeking to establish academic partnerships with institutions in the Kingdom, including King Saud University and King Abdulaziz University, for the exchange of scientific knowledge and innovations in the environmental field.
“Our cooperation with Saudi Arabia is built on a foundation of trust, mutual interest and a shared responsibility for sustainable development. We look forward to deepening this partnership in the years ahead,” said the minister.
The minister further said that Uzbekistan sees great opportunities for broader regional cooperation through the Middle East Green Initiative, which offers a valuable platform for environmental innovation, joint research, and investment in green infrastructure - particularly in areas like desertification control, sustainable land management and cross-border technology transfer.
He also invited Saudi partners to participate in the international Eco Expo Central Asia exhibition to be held in Tashkent from June 19 to 21, as well as the 20th CITES COP20 Conference, which will take place in Samarkand from Nov. 24 to Dec. 5.
Uzbekistan’s environmental agenda
During the interview, Abdukhakimov told Arab News that Uzbekistan is currently facing several severe environmental challenges, both globally and regionally, including climate change, desertification, and land degradation.
“These issues are the legacy of decades of unsustainable natural resource use and ineffective environmental management and a bitter lesson that we learn,” he said.
To address these challenges, the Uzbek government, under the leadership of President Shavkat Mirziyoyev, is taking various measures, including a push for a green economy, a transition to environmentally friendly transportation, and the development of alternative and renewable energy sources.
Saudi Arabia is also collaborating with Uzbekistan to advance its energy transition journey, which aims to generate 40 percent of its electricity from clean sources by the end of this decade.
Saudi utility giant ACWA Power is the largest foreign player in Uzbekistan’s energy sector, with the company already implementing 19 projects in the country worth a combined value of $5 billion.
Out of these 19 initiatives, eight are focused on renewable energy, which is expected to support the Central Asian nation’s goal to achieve 20 gigawatts of clean energy capacity by 2030.
During the Tashkent Investment Forum, Abid Malik, president of ACWA Power for Central Asia, announced that Uzbekistan will commence producing green hydrogen this month, with an annual production capacity of 3,000 tonnes.
In 2023, Mirziyoyev launched a pilot green hydrogen facility in the Tashkent Region in cooperation with ACWA Power. The $88 million project is being implemented in two phases, with production from the first phase expected to begin this month.
During the forum, Soumendra Rout, ACWA Power’s country head for Uzbekistan, said that the company is planning to invest $5 billion in the Central Asian nation as a part of its broader strategy aimed at increasing its total commitments in the country to $15 billion.
Abdukhakimov added that Uzbekistan, through the nationwide project Yashil Makon “Green Space,” aims to plant 200 million trees annually.
Under the project, Uzbekistan has planted over 850 million tree and shrub seedlings over the past four years.
“We’ve also launched the Uzbekistan–2030 Strategy, where one of the central goals is to ensure a healthy and sustainable environment for all. Furthermore, we’ve declared 2025 the year of Environmental Protection and Green Economy, a vision that reflects our national commitment to ecological priorities,” said the minister.
He added: “In terms of policy, we’ve adopted several strategic documents, including the Concept for Environmental Protection until 2030, the Strategy for Solid Household Waste Management, the Forestry Development Concept, and a comprehensive program to raise environmental awareness among the public.”
Abdukhakimov further added that Uzbekistan is also strengthening institutions for environmental monitoring and control, with the country modernizing its environmental monitoring systems and expanding its meteorological network.
“All of these efforts reflect Uzbekistan’s systematic and science-based approach to solving environmental problems, as well as our growing engagement with the global environmental community. We are determined to build a greener, more resilient future for our people,” he added.
According to the minister, Uzbekistan is actively undergoing a strategic shift from a linear to a circular economic model, where waste is no longer viewed merely as a byproduct but as a valuable resource.
“These initiatives are not only improving our national waste processing capacity but are also creating green jobs, enhancing public health and helping us meet national climate targets under the Paris Agreement,” he added.
Cooperation with regional partners
According to Abdukhakimov, Uzbekistan, like other Central Asian nations, is located in one of the world’s most climate-vulnerable regions.
He added that the average temperature in the region has risen by 1.5 degrees Celsius — twice the global average, while the area of glaciers has decreased by 30 percent in the last 50 to 60 years, resulting in water shortages, land degradation, and reduced crop yields.
“Central Asian countries share not only geographic and ecological systems, but also the risks driven by climate change, such as desertification, drought, and declining agricultural productivity. Uzbekistan views collaboration as the most effective strategy to forge a common, sustainable future,” said the minister.
To ensure regional cooperation, Uzbekistan also hosted the Samarkand Climate Forum in April, where the Regional Green Development Concept was presented.
The minister said that this document serves as a foundation for shaping coordinated climate policy and strengthening regional solidarity in the face of global challenges.
Uzbekistan is also actively engaged in numerous regional initiatives, including the International Fund for Saving the Aral Sea, the Regional Environmental Center for Central Asia, and the CAREC Program, as well as projects with the World Bank, OSCE, and UNESCO.
Abdukhakimov further said that these initiatives will facilitate knowledge exchange, joint management of natural resources, and the mobilization of international funding.
“In all our regional work, we are guided by the principles of solidarity, mutual benefit, and synergy. We believe that only through collective action can we ensure the sustainability, security, and prosperity of our entire region in the face of climate change,” the minister said.
World Bank to end ban on nuclear energy projects, still debating upstream gas
- World Bank to work closely with IAEA to build capacity
- Electricity demand is expected to more than double by 2035
WASHINGTON: The World Bank’s board has agreed to end a longstanding ban on funding nuclear energy projects in developing countries as part of a broader push to meet rising electricity needs, the bank’s president Ajay Banga said on Wednesday.
Banga outlined the bank’s revised energy strategy in an email to staff after what he called a constructive discussion with the board on Tuesday. He said the board was not yet in agreement on whether the bank should engage in funding the production of natural gas, and if so, under what circumstances.
The global development bank, which lends at low rates to help countries build everything from flood barriers to railroads, decided in 2013 to stop funding nuclear power projects. It announced in 2017 it would stop funding upstream oil and gas projects beginning in 2019, although it would still consider gas projects in the poorest countries.
The nuclear issue was agreed fairly easily by board members, but several countries, including Germany, France and Britain, did not fully support changing the bank’s approach to embrace upstream natural gas projects, sources familiar with the discussion said.
“While the issues are complex, we’ve made real progress toward a clear path forward on delivering electricity as a driver of development,” Banga said, adding that further discussion was required on the issue of upstream gas projects.
Banga has championed a shift in the bank’s energy policy since taking office in June 2023, arguing the bank should pursue an “all of the above” approach to help countries meet rising electricity needs and advance development goals.
In his memo, he noted that electricity demand was expected to more than double in developing countries by 2035, which would require more than doubling today’s annual investment of $280 billion in generation, grids and storage.
The Trump administration has been pushing hard for ending the ban on nuclear energy projects since taking office.
The US is the bank’s single largest shareholder — at 15.83 percent, followed by Japan with 7 percent and China with close to 6 percent — and the bank’s decision to broaden its approach to energy projects will likely please President Donald Trump, who withdrew the US from the Paris Climate Agreement and its emission-reduction targets as one of his first acts in January.
Twenty-eight countries already use commercial nuclear power, with 10 more ready to start and another 10 potentially ready by 2030, according to the Energy for Growth Hub and Third Way.
Banga said the World Bank Group would work closely with the International Atomic Energy Agency to strengthen its ability to advise on nuclear non-proliferation safeguards, safety, security and regulatory frameworks.
The bank would support efforts to extend the life of existing nuclear reactors, along with grid upgrades. It would also work to accelerate the potential of small modular reactors.
ENERGY MIX
Trump administration officials and some development experts say developing countries should not be blocked from using inexpensive power to expand their economies while advanced economies like Germany continue to burn fossil fuels.
But climate activists worry that funding more nuclear and natural gas projects will divert funds away from urgently needed efforts by developing countries to adapt to climate change and benefit from abundant alternative energy sources such as solar.
“Net zero does not mean fossil fuel free. It means, still, that there will be 20 percent energy coming from fossil fuels,” said Mia Mottley, prime minister of Barbados. “We know natural gas is that clean fuel.”
Banga said the bank’s revised strategy would allow countries to determine the best energy mix, with some choosing solar, wind, geothermal or hydroelectric power, while others might opt for natural gas or, over time, nuclear.
He said the bank would continue to advise on and finance midstream and downstream natural gas projects when they represented the least-cost option, aligned with development plans, minimized risk and did not constrain renewables.
The bank would further study evolving technologies like carbon capture and ocean energy, Banga said, adding it aimed to simplify reviews and approvals.
Banga said the bank would continue advising on and financing the retirement of coal plants, supporting carbon capture for industry and power generation, but not for enhanced oil recovery, which can typically secure commercial financing.
