Trump administration seeks to use global aid for nuclear projects

The Trump administration is taking the first steps toward allowing international development funds to be spent on nuclear projects, working to lift a longtime prohibition on how the anti-poverty funds can be spent. 

The Wednesday proposal from the Development Finance Corporation (DFC) would make it perhaps the only government development agency in the world to use its funds to back nuclear projects. 

The DFC argues that nuclear power will provide carbon-free electricity for developing nations seeing a growing demand for power.

“The proposed change could help deliver a zero-emission, reliable, and secure power source to developing countries, promoting economic growth and affordable energy access in underserved communities.

This change could also offer an alternative to the financing of authoritarian regimes while advancing U.S. nonproliferation safeguards and supporting U.S. nuclear competitiveness,” the DFC wrote of its proposal, which now enters a 30-day comment period.  

But critics see an effort to boost the U.S. nuclear industry that risks diverting funds from needy nations to wealthier ones with better infrastructure.

The proposal from the DFC is a speedy turnaround after a Trump administration report that recommended reversing the longstanding policy in the name of national security.

The U.S. has a “gaping vulnerability” in their energy dominance strategy, according to the April Department of Energy report, and investment is needed to counter Russian and Chinese dominance in supplying nuclear technology around the globe. 

Many of the world’s poorest countries may be decades away from being ready to install nuclear power, however, leaving questions over who DFC’s foray into nuclear will benefit and how the U.S. will ensure the technology isn’t used in ways that risk national security interests.

The DFC was started in 2019, replacing its predecessor — the Overseas Private Investment Corporation — with double the funding and fewer restrictions on how to spend it.

The $60 billion agency also has an expanded mission: elevating the world’s poorest countries while also advancing U.S. foreign policy.

Connor Savoy, executive director of the Modernizing Foreign Assistance Network, said there’s “some countervailing pressure and a desire for it to do more things with this national security mandate over development and poverty alleviation.” 

Countering nuclear programs from China and Russia, which often require nations to purchase nuclear fuel from them for upwards of 30 years, could limit their influence over other countries’ power sources.

But wealthier Eastern European nations like Poland, which have repeatedly expressed an interest in nuclear, could be likely candidates to receive initial funding for nuclear projects. 

“That would obviously likely lead to reduction in dependency on fossil fuels and other things that generate greenhouse gasses. But I’m not sure you’re at a point there in a lower income country like Mali or even a large country like the DRC,” Savoy said, referring to the Democratic Republic of Congo. Both countries are in the lower income bracket that the DFC was designed to help.

Others say it makes sense to make initial investments in the countries that are most ready, advancing the industry while poorer nations prepare their infrastructure.

“I think the initial concerns are misplaced and potential upsides are tremendous, and we want the development community to see the benefits for emerging and frontier markets, especially for countries that are going to need a lot more low-carbon energy in future,” most of which are in Asia, Africa and Latin America, said Todd Moss, executive director of Energy for Growth Hub.

Moss’s hope is to get small modular reactors into developing countries. Though not yet commercially viable, the reactors are largely prefabricated, in theory making them cheaper and easier to install at the scale a country might need in comparison to traditional reactors.

He said the potential market in the medium term includes a “huge range of countries.”

“One thing about having a ban is no one comes to talk to you about projects. Just lifting the ban … will open the doors, and we’ll see who’s talking about what projects,” he said.

Nuclear experts said bringing nuclear into new markets will require countries to do significant legwork to get the proper policies in place. 

“We’ve seen security incidents at nuclear facilities around the world, rising operational costs leading to shutdowns, and ongoing disagreements about how to manage nuclear waste. Disposing of waste, ensuring a high standard of safety and security, and assessing costs are all key factors any country pursuing nuclear power should take into account,” said Nickolas Roth, director of the nuclear security program at the Stimson Center, a national security think tank.

Proponents say U.S. involvement could help ensure nuclear power is pursued more safely abroad.

“China and Russia don’t follow the same security protocols U.S. companies are required to,” said Jackie Kempfer at the left-leaning think tank Third Way.

“It’s a perfect example of why DFC making this decision now is such a good time,” she said, even when developing nations might be decades away from reaping the benefits. “We need time to have these conversations about what our relationship with nuclear looks like.”

The move scored positive comment on the Hill, as a joint statement from Sens. Lisa Murkowski (R-Alaska) and Joe Manchin (D-W.Va.) called it “crucial to meeting climate and energy leadership goals.”

But expanding funding for nuclear power would be opposed by some environmental groups, who see nuclear waste as environmentally risky.

“We strongly recommend that DFC not change its prohibition of supporting nuclear as nuclear — in all forms — is expensive, requires highly skilled labor to run and decommission, and is not clean,” Kate DeAngelis with Friends of the Earth, said by email.

“Mini and off grid renewables would provide access to electricity in the countries that DFC should be helping — low and lower middle income countries — much faster and more affordably.”