National Business Initiative CEO Joanne Yawitch told the forum that private sector companies and banks wanted to see a return on their investments within three to five years, while low-carbon projects tended to take much longer to deliver returns.
“The return on low-carbon initiatives are generally much longer, so green economy low-carbon projects tend to fall off the table.”
Projects focusing on energy efficiency were the exception, as these usually showed immediate results.
Flowing from the power cuts and energy crisis in 2008, Yawitch said companies ploughed billions of rands into energy efficiency. But this was quite short-term and different to the longer-term green projects that were also needed in the country.
Yawitch, who is working on a study funded by the British High Commission on low-carbon finance in South Africa, said few institutions in the country provided access to finance for green projects.
“Those who do are reluctant to share their funding criteria. Banks are nervous that if they set up 20 criteria, they will land up with a rush of proposals, many of them not suitable.”
Yawitch said there was a mismatch between banks and businesses in the green space, with the perception that the green economy was “very amorphous and very wide”.
“People have great ideas, but no idea how to package them so that banks can understand. This leads to frustration from both sides.”
She said new market entrants needed to do proper feasibility studies.
Jenny Cargill, the special adviser on the green economy to the Premier of the Western Cape, said the global low-carbon and environmental goods and service market was estimated to be valued at about $6-trillion a year.
She believed there was plenty of opportunity in South Africa to gear up for a greener economy.
The Western Cape was focusing on a range of initiatives, from green procurement and sustainable low-cost housing to a renewed focus on natural gas in its bid to become the lowest-carbon province in the country.
“The approach we’re taking is to see where we can lead as a pioneer or be an early adaptor,” Cargill told the forum, which was held in collaboration with Accelerate Cape Town.
Among plans being considered by the province was designing more efficient low-cost housing and affordable integrated settlements.
Cargill also suggested capitalising on the strong design base in the Western Cape.
“We are positioning ourselves as an emerging market leader. We believe we have enormous potential to export products and expertise to Africa in the field of smart sensors and other products.”
Green procurement is also becoming something of a buzz phrase, with suggestions that a list should be compiled of green providers, who would need to adhere to certain standards.
“We have over 15 000 buildings in the Western Cape. That gives us a huge market for sensors and energy efficient devices,” said Cargill.