August 7, 2020 at 5:00 am ET
When almost 1 billion people around the world lack access to electricity, achieving widespread poverty reduction and economic growth hinges on providing reliable power to the vast communities that live without this fixture of modern life.
The U.S. International Development Finance Corporation recently took steps to reverse a legacy policy and resume financing for nuclear energy projects in emerging markets. This move recognizes that nuclear power is essential to expand the world’s energy generation capacity and reinforces American global leadership in the sector.
DFC has a broad portfolio of projects that generate electricity in Africa, Asia and other energy-scarce regions. Nuclear technology has dramatically evolved in recent years, with small modular reactors and microreactors that could offer improved economics and grid compatibility compared to other generation sources. These technologies are well-suited for developing countries that have limited budgets and less-established electrical grids.
Many developing countries are pursuing nuclear power to address their energy shortages and prepare for steep increases in demand. The need is immense. In many parts of rural Africa, less than 10 percent of the population has access to electricity. Worldwide energy consumption is projected to grow almost 50 percent by 2050, with most of that increased use coming from developing countries.
American businesses seeking to enter these markets face stiff competition from Chinese and Russian state-owned enterprises. To say this is troubling is an understatement. Growing dominance by authoritarian states is a challenge to the high standards in nuclear security, nonproliferation and national security of the United States and global export control regimes. Russia and China use reactor sales by their state-supported nuclear industries as a geopolitical tool to develop energy dependence by foreign partners, and sometimes even to use predatory financing to lure foreign partners into traps that can be exploited later for geopolitical gains.
Russia and China use civil nuclear relationships as a tool to further their own interests at the expense of states’ interests and through deliberate carelessness in the nonproliferation standards they ask of their partners, ultimately seeking competitive advantages against responsible suppliers such as the United States. The United States seeks to cooperate with states to meet their national energy needs and to help them build their own infrastructure for the responsible use of nuclear energy and technology and adopt best practices in nuclear safety, security, and nonproliferation.
DFC’s modernized nuclear policy is grounded in the recommendations endorsed by the Nuclear Fuel Working Group, which sought to restore the position of the United States as the world leader in exporting best-in-class nuclear energy technology. The agency’s move to reverse legacy policy and resume financing for nuclear energy projects in emerging markets follows a voluntary 30-day public notice and comment period, which generated 833 responses, more than 98 percent of which supported the proposed changes. The comments also informed how DFC will implement the policy change. For example, following suggestions from several members of Congress, including Sens. Chris Coons (D-Del.), Lisa Murkowski (R-Alaska) and Sheldon Whitehouse (D-R.I.), as well as Rep. Adam Kinzinger (R-Ill.), DFC will ensure stringent safety protocols for nuclear projects and prioritize support of advanced nuclear technology in emerging markets.
By providing debt and equity financing, insurance and technical assistance to projects that are unable to obtain sufficient support from private lenders, DFC will mobilize additional private capital, resulting in projects that are financially viable and built to the highest standards. Together with the Department of Energy’s support of innovative reactor technology, this critical policy change will help restore America’s global leadership in the civil nuclear sector and drive development by increasing access to a sustainable source of clean energy in frontier markets.
The need for more energy in the developing world is urgent. Advanced nuclear technologies will generate energy for homes and businesses as well as for industrial uses such as desalination plants. They will help countries grow and innovate, create opportunity for their citizens, and engage with the rest of the world.
Dan Brouillette is Secretary of the U.S. Department of Energy. Adam Boehler is the CEO of the U.S. International Development Finance Corporation.
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