The world needs a new way of doing business in Africa, particularly with regard to climate finance, World Bank special envoy for climate change Andrew Steer said on Friday.

The gross domestic product (GDP) for Africa is $1-trillion, with investment currently only one-fifth of this at $200-billion. If GDP grew to $2-trillion by 2020, investment would increase to $400-billion.

Even with good policy and if investment in Africa grew by 25% to $500-billion, this would still not be sufficient to reduce poverty in Africa, Steer said at a seminar of financing climate actions in Africa at COP 17 in Durban.

In 2010, the world invested $250-billion in renewable energy, and very little was channelled to Africa, Steer lamented.

Africa also only has a 2% share of the carbon market, which he said indicated that the “rules of the game were not fair”.

“The rules of the game must change to create attractive investment environments. We need to increase investment in Africa and need to invest and do business in a greener way.”

Steer said that about 600-million people did not have access to electricity in Africa. The total installed capacity of the continent, excluding South Africa, was 30 GW. About 700-million people consumed the same amount of electricity as Norway’s 4.9-million population.

“We need to accelerate investment to ensure that 70% of Africa gets access to electricity, but we cannot reduce greenhouse-gas emission if we do not do it right.”

Africa needed financing, policy and governance to make investment happen. “There is a need for partnerships that include governments, who need to set regulatory and transparent environments to ensure long-lasting and consistent investment.”

European Investment Bank VP Plutarchos Sakellaris also called for bottlenecks to investment, including education, affordability and capacity, to be overcome.

The Energy, Environment and Development Network For Africa, known as AFREPREN, director Stephen Karekezi said Africa needed to be more aggressive in its efforts to secure investment for climate change.

Both Karekezi and Sakellaris said the challenge for Africa was not primarily financing, but ensuring that there were good bankable projects.

South African power utility Eskom chairperson Zola Tsotsi said that a global agreement on climate change had to meet the needs of a good governance framework to support investment in green energy.

Highlighting key issues that needed to drive the global climate change talks, he said that there needed to be certainty around the carbon market and that competitiveness at a national level should not be compromised.

Further, any agreement should not compromise the balance between adaptation and mitigation, and businesses should be motivated to drive climate change imperatives in their business strategy.

Also, an agreement on financing was needed for a successful outcome for climate change, and it was critical that such funding suited the needs of developing nations.

“With regard to the green technology fund, good governance must prevail, while issues of national sovereignty are secured and respected,” Tsotsi said.

The mindset, he believed, was shifting and developing countries were now being given the opportunity to voice and make institutions understand their financing needs.

“We need to move away from an imbalanced relationship between the funder and the receiver, because what matters is the appropriateness of a particular technology for a country. Direct access to funds must be guided by national plans,” Tsotsi said.

Securing “certainty” for an investor and for institutional funding was also important in moving to a low-carbon economy, as funding was becoming more difficult given the financial crunch.

South Africa was more fortunate than many other developing countries, in terms of being able to source funding internally, but in the main, the plight of developing countries was a “serious one”. Tsotsi said those responsible for giving money needed to take cognisance of the needs of developing countries.