Fossil gas is often promoted as a bridge fuel to cleaner energy, industrialisation and economic growth. A new report challenges this narrative, showing how dependence on fossil gas exposes countries in the Global South to economic risks and diverts investment from cheaper, cleaner energy alternatives.

Published in September 2026, Unpacking the ‘bridge fuel’ myth: Why fossil gas is bad economics for the Global South examines the financial, economic and social costs of fossil gas expansion. The report was published by Recourse in collaboration with The Big Shift Global and Africa Change Lab.

The report identifies several risks associated with fossil gas dependence:

• Exposure to global price volatility: Reliance on imported liquefied natural gas (LNG) leaves countries vulnerable to international fuel price fluctuations.

• Foreign exchange pressures: LNG contracts priced in US dollars become more expensive when local currencies depreciate, increasing import bills and pressure on public finances.

• Rising electricity costs: Expensive gas infrastructure and fuel supply contracts can increase electricity costs for governments, businesses and households.

• Public debt and financial liabilities: Gas projects often depend on public financing, government guarantees and long-term payment commitments, exposing taxpayers to significant financial risks.

• Gender and social inequalities: Higher energy costs place a disproportionate burden on low-income households and women, while pressure on public budgets threatens spending on essential services.

• Stranded asset risks: Long-term investment in fossil gas infrastructure risks locking countries into expensive energy systems as renewable technologies become more competitive.

The report examines these challenges through five country case studies:

• Bangladesh: Gas-fired power infrastructure faces fuel shortages and capacity payment obligations, raising questions about the financial sustainability of the country’s energy system.

• Pakistan: Long-term LNG contracts are increasingly at odds with growing solar adoption, creating tensions between existing fossil fuel commitments and changing energy needs.

• South Africa: Proposed gas expansion faces growing competition from renewable energy alternatives.

• Namibia: The case study highlights the implications of keeping public development finance away from fossil fuel investments.

• Nigeria: Despite being a major LNG exporter, Nigeria continues to face significant electricity access challenges, raising questions about the relationship between gas exports and domestic energy needs.

The report also highlights the economic case for renewable energy. In 2024, 91% of newly commissioned renewable energy capacity generated electricity at a lower cost than the cheapest fossil fuel alternative. Investment in renewables, battery storage and grid infrastructure offers countries an opportunity to improve energy security, reduce exposure to international fuel markets and build more resilient energy systems.

The report calls on multilateral development banks (MDBs) to take action by:

• Ending direct and indirect financing for fossil gas projects.

• Improving transparency around energy investments and associated financial risks.

• Prioritising renewable energy, battery storage and supporting grid infrastructure.

• Making gender impact assessments mandatory in energy sector reforms.

• Supporting audits, restructuring and cancellation of illegitimate energy sector debt.

The findings challenge the assumption that fossil gas offers a reliable and affordable pathway to development. They highlight the need for development finance institutions and governments to prioritise energy systems that are affordable, reliable and equitable, while avoiding long-term dependence on costly fossil fuel infrastructure.