Blog: World Bank support for gas will hinder ambitious climate targets in lower income countries

• By Alison Doig, Recourse, and Hasan Mehedi, CLEAN/Coastal Livelihood and Environmental Action Network.

While the World Bank Group says it is ready to channel climate finance to help meet climate goals, it continues to finance and advise on expansion of fossil gas in low-income countries. In this article we question the World Bank’s continued vested interest in supporting fossil gas. Could World Bank support for gas lower the ambition of many low-income countries climate targets for 2035?

Guidance and finance from the World Bank could make a real difference in climate ambition for a country such as Bangladesh, to either continue on an increasing emissions pathway in the 2030s with dependence on fossil gas, or to lower their emissions as they develop by transitioning to modern renewable energy systems.

By the COP30 climate negotiations in Belem, Brazil in December 2025, all countries will be expected to present a new set of Nationally Determined Contributions (NDCs) under the Paris Agreement. These should include enhanced targets for 2030, as well as new targets for 2035 that are aligned with keeping global temperature rise below 1.5°C of warming.

Without a doubt, it is the wealthy, historic high emitting countries, including the G7, who need to set the most ambitious trajectories for emissions reduction. Given their historic and current responsibility for climate change, they also have a duty to provide financial support for low-income countries to reduce emissions. Without this climate finance to raise global ambition, keeping warming below the 1.5⁰C limit will become increasingly elusive. But it is important that climate finance is spent wisely.

The World Bank’s ‘Paris Alignment approach’ says it will finance projects that are within a country’s low-carbon strategy, yet it also allows for countries to increase their dependence on fossil gas under the guise of a ‘transition fuel’. This approach could hinder the next phase of emissions targets. As countries increase dependence on fossil gas, including imported Liquefied Natural Gas (LNG), and have to pay back loans on gas infrastructure for many years to come, their options for raising ambition for the 2035 emissions target in the next round of NDCs is increasingly limited.

Take Bangladesh for example: current NDC targets to 2030 allow the country to more than double its emissions from 2012 levels, with rapidly increasing emissions in the 2020s. Bangladesh’s historic emissions are extremely low, but it is on track to be a higher emitting country than the United Kingdom by 2030. Of course, Bangladesh has the right to development, and its current NDC reflects this imperative. But the constraints of the ever-threatening climate crisis should make the country’s leaders ask what type of development pathway it should take and what finance is needed for that course. A gas dependent route which will render the country more vulnerable to climate impacts and debts, or a clean energy one?

Bangladesh does not have a long-term climate strategy that would guide World Bank investments beyond 2030. The country has formulated the Mujib Climate Prosperity Plan (MCPP) towards decarbonisation by 2050, but it has not been incorporated into the long-term development plans. Under its own Paris Alignment methodology, the World Bank can therefore legitimately finance fossil gas as a transition fuel, with little incentive to start an end game for fossil gas in the country.

As a result, the World Bank support for gas is high: it is playing an active role in establishing new gas infrastructure and financial dependency on fossil gas. World Bank Development Policy Finance (DPF) has played a significant role in shaping policy reforms in Bangladesh’s energy sector. It has required reforms aimed at enhancing efficiency, liberalising the energy market, and promoting the use of cleaner energy sources. But these reforms have prioritised the development of gas infrastructure, including for LNG import, because of the false narrative that it is a cleaner alternative to coal. Gas is dangerously framed as a stepping stone to solar and wind power, for which Bangladesh holds considerable potential. Building new LNG import terminals and regasification plants would not only locking Bangladesh into a high carbon energy system, but could create stranded fossil fuel assets, instead of investing in modern sustainable renewable energy infrastructure.

Additionally the World Bank’s Multilateral Investment Guarantee Agency (MIGA) is providing export guarantees through for investors in the controversial Bhola-2 220MW Combined Cycle Power Plant that was opposed by local communities over claims of land-grabbing and environmental destruction.

Such interventions by the World Bank Group could preclude Bangladesh from setting a date for the peak and crucial decline in its emissions in the 2030s or even 2040s.

Of course, the Bank’s vested interest goes beyond Bangladesh. The World Bank private sector arm, the International Financial Corporation (IFC), has directly invested in three gas projects in Africa since 2020, in Mozambique and Côte d’Ivoire, as well as investing in a new gas power plant in Uzbekistan. World Bank technical assistance is also creating dependency on fossil gas and LNG: for example in Vietnam where it shored up Vietnam’s Gas Sector Strategy, including financing the Vietnam Roadmap for Gas Market Development, extending its implementation horizon to 2035. While it continues to be an apologist for the fossil gas industry, the World Bank is a climate laggard not a leader, especially when it comes to forms of indirect finance, like technical assistance and DPF.

The guidance from the Global Stocktake, agreed at last year’s COP28 in Dubai, called for a transition away from fossil fuels and contributions towards a global tripling of renewable energy capacity. It would seem logical, therefore, for the World Bank Group to focus its advice and finance on the renewable technologies of the future. The World Bank Group’s role should be to lay the ground for the most ambitious low or zero carbon technologies, infrastructure and industry, not outdated fossil fuels like gas. World Bank support for gas must end.

Ultimately, it is climate vulnerable countries such as Bangladesh which are already feeling the full force of ever advancing global warming. It is the duty of wealthy nations and institutions like the World Bank Group to finance a safer, cleaner climate future.

• Image by Abir Abdullah / Climate Visuals Countdown. A student reads with the help of a solar lantern at his home in Natore, Bangladesh.