Arab nations’ non-oil sectors show strong growth in February: S&P Global

Abu Dhabi, capital of the UAE. Shutterstock
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Updated 05 March 2025
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Arab nations’ non-oil sectors show strong growth in February: S&P Global

  • Steady expansion across the region signals progress in economic diversification efforts

RIYADH: The UAE’s non-oil private sector continued its steady growth in February, driven by improved business conditions and a rise in new orders, according to S&P Global. 

In its latest report, the financial services company revealed that the Emirates’ purchasing managers’ index stood at 55 in the second month of the year, unchanged from January and marginally down from December’s nine-month high of 55.4. 

S&P Global highlighted that any PMI reading above 50 signifies the expansion of the private business conditions, while below 50 indicates contraction.

The strong growth of non-oil business activities in the UAE aligns with the broader trend in the Middle East region, where countries are steadily pursuing their economic diversification efforts. 

Saudi Arabia recorded a PMI of 58.4 in February, with Kuwait at 51.6 and Egypt at 50.1.

David Owen, senior economist at S&P Global Market Intelligence, said the UAE report showed “another solid month” for non-oil businesses in the country, adding: “A PMI reading of 55.0 suggests that growth has remained relatively steady since its recent high at the end of last year.” 

According to the analysis, business activity growth gained momentum in February and was stronger than its long-run average of 54.4. 

Companies that took part in the PMI survey revealed that output had ramped up in response to rising levels of new business. 

The study added that improving market conditions, advertising efforts, and restrained output price pressures boosted demand levels among non-oil private firms last month.

A note of caution was sounded by various non-oil private companies, according to the report, with these firms warning that competition from domestic and foreign sources dampened growth in February. 

“The sector is not without its challenges, as highlighted by a limited level of confidence in the year ahead outlook. Firms continue to feel the pressure of intense competition, which has capped price increases,” said Owen. 

He added: “Growing cost pressures resulted in a slight acceleration in selling price inflation in February. Additionally, businesses are eager to secure new work, which contributed to a rapid accumulation of backlogged orders.”

The report further said that employment creation in the UAE’s non-oil sector remained limited in February. While some firms hired additional workers to increase their capacity, most companies kept employment unchanged.

“While robust growth in business activity indicates that the pipeline of orders should eventually be addressed, other factors such as weak job creation and administrative delays pose risks to this outlook,” said Owen. 

He added that non-oil firms in the UAE continued to report difficulties securing client payments and highlighted the necessity to implement effective policy action to address this issue. 

In the same report, S&P Global revealed that Dubai’s PMI marginally declined to a three-month low of 54.3 in February, down from 55.3 in January, indicating a slower improvement in the health of the Emirate’s non-oil sector. 

Despite this drop, the overall improvement in Dubai’s non-energy sector remained solid, driven by robust expansions in new orders and output. 

The analysis added that activity levels at non-oil companies in Dubai reportedly increased in February due to stronger demand and softer price pressures. 

The rate of increase in input prices was the softest recorded in four months, resulting in only a fractional uplift in average prices charged.

In February, non-oil firms in Dubai saw business expectations recovering to a three-month high but remained relatively subdued. 

Most of the non-energy private companies in Dubai kept their staffing levels unchanged from January, although inventory growth was supported by rising input purchasing.

Employment in Qatar’s non-energy sector rises

In another report, S&P Global revealed that Qatar’s non-oil private sector witnessed growth momentum in February, with the country’s PMI up for the first time in three months to reach 51, up from 50.2 in January. 

“The labor market in Qatar continued to thrive in February as employment in the non-energy private sector increased at a survey-record pace, and wages and salaries rose at the second-fastest rate on record,” said Owen. 

S&P Global added that the wholesale and retail sector posted a fresh record increase in jobs over the month, while the slowest recruitment growth was in construction.

Average wages and salaries also grew at the second-fastest rate on record in February, easing only slightly since January’s peak. 

The analysis further stated that the total level of business activity in the non-energy private sector economy was broadly stable in February, having eased marginally at the start of 2025. 

“The employment component was the dominant influence on the headline PMI in February. Nevertheless, outstanding business continued to increase and the 12-month outlook remained positive, with confidence holding above the post-pandemic average,” added Owen. 

Lebanese private sector witnesses further growth

An additional study by S&P Global, in association with BLOMINVEST Bank, revealed that Lebanon’s PMI in February stood at 50.5 in February, marginally down from 50.6 in January. 

According to the report, this steady momentum of the country’s private sector economy was supported by greater levels of new business, specifically from abroad. 

New order growth was sustained for the second month running in February, albeit with the pace of expansion losing some momentum. 

The financial firm added that the upturn in sales was among the sharpest on record, reflecting greater business volumes from international customers. 

For the first time since November 2023, private sector firms in Lebanon registered higher new export orders. 

“The election of a new president, the formation of a new cabinet believed to be pro-reform, boosted optimism among Lebanese businesses. However, the PMI may have eased due to Israel’s continued presence in five strategic locations, which threatens Lebanon’s security,” said Mira Said, senior research analyst at BLOMINVEST Bank. 

Private sector firms in Lebanon were also optimistic about the future outlook, mainly driven by positivity surrounding the recent elections, as well as hopes of rejuvenation of the tourism sector in 2025. 

The report added that there was a renewed expansion in purchasing activity across the Lebanese private sector, marking the quickest in 11 and a half years. 

The PMI survey also signaled an intensification of inflationary pressures across Lebanon in February, resulting in higher operating expenses and a sharp rise in purchasing costs. 

“The new government is committed to negotiating with the International Monetary Fund and to implementing a spectrum of reforms. Amid uncertainty over Lebanon’s ability to recover, some believe the country has hit rock bottom and can only improve from here,” added Said.


Closing Bell: Saudi Arabia’s main index declines to close at 10,840

Updated 12 June 2025
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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

Updated 12 June 2025
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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

Updated 12 June 2025
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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

Updated 12 June 2025
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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

Updated 12 June 2025
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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.