- On Wednesday, the U.S. International Development Finance Corporation (DFC) announced that it has opened comments on a new policy that would lift its prohibition on financial support for nuclear power projects.
- The financing policy could boost domestic nuclear development and increase U.S. influence in emerging markets, DFC and nuclear energy advocates say.
- If enacted, the new policy could help keep the U.S. on track to commercialize advanced nuclear technologies by 2030, according to center-left think tank Third Way.
The U.S. International Development Finance Corporation has begun public evaluation of a new policy that nuclear energy advocates hope will pave the way to more financing opportunities, and eventually commercialization, of advanced nuclear power generation.
The DFC announced on Wednesday that it has opened a 30-day public comment period on a proposed change to the agency's Environmental and Social Policy that would lift the current prohibition against financing nuclear energy projects. According to the agency, "modernizing" this policy will encourage the adoption of certain advanced technologies, such as small modular reactors and microreactors, which could be manufactured in the U.S. and deployed in developing countries in need of clean, affordable energy generation. The policy "could also offer an alternative to the financing of authoritarian regimes," according to the June 10 release.
The proposed policy change has the potential to help developing countries reach their goals of producing clean, reliable energy while buttressing U.S. national security, according to the Nuclear Energy Institute.
"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 programs," Maria Korsnick, NEI's president and CEO, said in a statement. "Without robust financing to encourage partnership with the United States, well-funded, state-owned enterprises from China and Russia are filling this void. Partnering with U.S. companies would position countries to provide long-term clean, reliable energy for electricity grids, desalination, and other applications."
Josh Freed, senior vice president of Third Way's climate and energy program, agreed that the policy has the potential to promote U.S. foreign policy and economic objectives while supporting climate and energy goals in emerging economies.
Advanced nuclear generation, Freed said, holds particular promise for countries with an interest in zero-carbon energy generation that don't need as much generation as the large nuclear reactors on today's market. Countries such as India could also one day use advanced reactors as opposed to gas-fired plants as they integrate more renewable energy into existing systems.
But it can be difficult to obtain private financing for emerging nuclear technology, Freed said, which has some countries turning to Russia and China. Those countries have not only developed advanced reactors, but offer financing to accompany their products.
"Companies in these other countries have significant advantages because it's their country that is underwriting the deals," Freed said. "That allows them to be more competitive, but comes with strings attached that are bad for the interest of the United States."
If the DFC lifts the ban on financing nuclear projects, U.S. companies could compete on a level playing field, which could trigger the creation of new manufacturing jobs in the U.S. and keep the nation on track to commercialize advanced nuclear technology by 2030, he said.
Freed said he also hoped that the change in DFC policy would encourage other lenders, including the World Bank, to reconsider their own rules about nuclear energy.