•  Major banks pledge support for nuclear energy: Fourteen global financial institutions, including Bank of America, Barclays, and Goldman Sachs, have committed to supporting nuclear energy, aiming to triple global nuclear capacity by 2050 as part of climate goals set at COP28.
• Nuclear energy seen as vital for net-zero: Despite historical hesitations, banks now recognize nuclear power’s role in reducing carbon emissions, providing stable energy, and addressing renewable energy intermittency, especially in Western countries.
• Tech sector involvement boosts momentum: Companies like Microsoft and Oracle are investing in nuclear power, with projects like small modular reactors and agreements to restart reactors, signaling a new wave of nuclear energy financing and development.

Fourteen of the world’s largest banks and financial institutions have pledged to increase their support for nuclear energy, a move that governments and the nuclear industry hope will unlock critical financing for a new generation of nuclear power plants. The announcement was made during an event in New York, which featured White House climate policy adviser John Podesta. The institutions involved include major players like Bank of America, Barclays, BNP Paribas, Citi, Morgan Stanley, and Goldman Sachs. Their commitment aligns with the goal, first set during the COP28 climate talks, to triple global nuclear energy capacity by 2050.

Although the banks did not provide specific details on how they plan to increase their involvement, nuclear experts view this public show of support as a long-awaited acknowledgment of the sector’s essential role in the transition to low-carbon energy. Financing nuclear projects has traditionally been difficult, due to the high costs and risks involved, contributing to a slowdown in new plant construction in many Western countries since the 1980s.

“This event is going to be a game-changer,” said George Borovas, head of the nuclear practice at law firm Hunton Andrews Kurth and a board member of the World Nuclear Association. Borovas noted that, until now, many banks found it politically and operationally challenging to support new nuclear projects, often requiring approval from the highest levels of management due to the sector’s controversial nature. However, with this new backing, Borovas believes nuclear energy is being normalized as a key solution for addressing climate change, rather than being seen as a “necessary evil.”

The banks could provide support in several ways, including through direct lending to nuclear companies, facilitating bond sales, or connecting nuclear companies with private equity and credit funds. Historically, financial institutions have been divided on the issue of nuclear energy, partly because of the complexities involved in financing these projects and the high levels of perceived risk. Another concern has been whether nuclear energy fits within environmental, social, and governance (ESG) standards. Notably, the World Bank and other multilateral institutions do not provide financing for nuclear projects.

Nevertheless, BNP Paribas emphasized that nuclear power is indispensable for achieving carbon neutrality by 2050, echoing the findings of the UN’s Intergovernmental Panel on Climate Change. Barclays also expressed its support for nuclear energy as a solution to the intermittency issues faced by renewable energy sources like wind and solar power.

While much of the world’s recent nuclear expansion has taken place in Asia and the Middle East, led by countries like China, governments in the West are increasingly turning to nuclear energy to meet their net-zero commitments. The United States, United Kingdom, Japan, Sweden, and the United Arab Emirates were among those that signed the COP28 pledge to triple nuclear capacity by mid-century.

The nuclear sector has also attracted attention from Big Tech, which sees nuclear energy as a viable low-carbon option for powering energy-intensive data centers. For instance, Microsoft recently signed a 20-year agreement with Constellation Energy to restart an 835-megawatt nuclear reactor at Three Mile Island in Pennsylvania. Similarly, Oracle co-founder Larry Ellison announced plans to design a large data center powered by small modular nuclear reactors.

James Schaefer, an investment banker at Guggenheim Securities, one of the institutions signing the nuclear energy pledge, noted that when tech companies start backing their words with financial commitments, the industry gains serious momentum. “As soon as you see those companies start to invest in nuclear through contracts, that’s when this all starts happening,” Schaefer said. He described the current moment as “just before the dawn” for nuclear financing, with Wall Street expected to play a key role in connecting investors, producers, and technology developers.

Despite this growing support, there remains sensitivity within the financial sector regarding nuclear energy. Ahead of the New York event, banks issued non-binding commitments to nuclear energy, but several declined to comment publicly, reflecting the ongoing caution around the topic. Still, with favorable shifts in public opinion toward nuclear energy in the U.S. and Europe, many view this development as a crucial step toward reviving the sector.

Other financial institutions supporting the pledge include Abu Dhabi Commercial Bank, Ares Management, Brookfield, Crédit Agricole CIB, Rothschild & Co, Segra Capital Management, and Société Générale.

As the world grapples with the urgent need to decarbonize, this collective show of support from financial heavyweights may mark the beginning of a new era for nuclear energy, helping to overcome the financing challenges that have long held back its growth.