41838 ANNUAL PROGRESS REPORT BANK-IMPLEMENTED MONTREAL PROTOCOL OPERATIONS January - December 2006 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 TABLE OF CONTENTS I. PROJECT APPROVALS AND DISBURSEMENTS ...........................................................1 A. Annual Summary Data ......................................................................................................1 B. Summary of Data by Project Type (CPG, DEM, INS, INV, PRP, TAS, TRA)................3 C. Multi-year Agreements......................................................................................................4 D. Sector Phaseout by Country ............................................................................................10 II. PROJECT COMPLETIONS SINCE LAST REPORT ........................................................10 A. ODP Phased Out Since Last Report................................................................................11 B. Non-Investment Project Completions Since Last Report................................................11 III. GLOBAL AND REGIONAL PROJECT HIGHLIGHTS....................................................14 A. Global Projects ................................................................................................................14 B. Regional Projects.............................................................................................................14 IV. PERFORMANCE INDICATORS .......................................................................................15 A. Agency Performance Goals.............................................................................................15 B. Cumulative Completed Investment Projects ...................................................................19 C. Cumulative Completed Non-Investment Projects ...........................................................21 D. Cumulative Ongoing Investment Projects.......................................................................23 E. Cumulative Ongoing Non-Investment Projects...............................................................25 V. STATUS OF AGREEMENTS & PROJECT PREPARATION (WHERE APPLICABLE), BY COUNTRY....................................................................................................................27 A. Agreements to be Signed/Executed/Finalized & When They Will be Ready for Disbursing........................................................................................................................27 B. Project Preparation by Country, Approved Amount, and Amount Disbursed................28 VI. ADMINISTRATIVE ISSUES (OPERATIONAL, POLICY, FINANCIAL, AND OTHER ISSUES) ...............................................................................................................................29 A. Meetings Attended ..........................................................................................................29 B. Implementing Agency and Other Cooperation................................................................30 C. Other Issues .....................................................................................................................30 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 LIST OF TABLES TABLE I-1: ANNUAL SUMMARY ............................................................................................................2 TABLE I-2: SUMMARY OF DATA BY PROJECT TYPE...............................................................................3 TABLE I-3: MULTI-YEAR PROJECTS ......................................................................................................6 TABLE II-1: PROJECT COMPLETIONS DURING REPORTING PERIOD......................................................12 TABLE IV-1: WORLD BANK PERFORMANCE GOALS............................................................................17 TABLE IV-2: WORLD BANK INDICATORS OF IMPLEMENTATION PROGRESS.........................................18 TABLE IV-3: WORLD BANK INDICATORS OF IMPLEMENTATION PROGRESS ­ NON-INVESTMENT........18 TABLE IV-4: CUMULATIVE COMPLETED INVESTMENT PROJECTS .......................................................20 TABLE IV-5: CUMULATIVE COMPLETED NON-INVESTMENT PROJECTS...............................................22 TABLE IV-6: CUMULATIVE ONGOING INVESTMENT PROJECTS............................................................24 TABLE IV-7: CUMULATIVE ONGOING NON-INVESTMENT PROJECTS...................................................26 TABLE V-1: ACTIVE PROJECT PREPARATION ......................................................................................28 TABLE VI-1: MP MEETINGS ATTENDED BY WORLD BANK STAFF IN 2006.........................................29 List of Attachments Annex I: Country Developments Annex II: Progress & Financial Reporting Database MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 I. PROJECT APPROVALS AND DISBURSEMENTS A. Annual Summary Data 1. Implementation of World Bank Multilateral Fund activities has advanced in the calendar year 2006. With a cumulative ODP phaseout of 259,339 metric tonnes (MT), 103 percent of the total ODP to be phased out through World Bank conversion and closure projects has been achieved. 2006 therefore marks the first year where the World Bank has surpassed its planned ODP phaseout. Disbursement for the entire World Bank portfolio in the year 2006 is at US$687 million. Twenty- two new project approvals by the MLF have increased the number of active projects in the Bank's portfolio to a total of 915.1 New approvals included two new multi-year projects, increasing the total number of multi-year projects in the Bank's portfolio to 25. 2. Implementing Agency performance is measured by a set of nine weighted performance indicators in accordance with Executive Committee Decision 41/93. In 2006, 19 annual programs associated to existing and new multi-year agreements were submitted and approved out of 23 planned in the approved table of World Bank 2006 performance targets which is 83 percent of the target of this "approval" indicator. In regards to the ODP phaseout target which is now covered in two of four "implementation" indicators that deal with multi-year projects on the one hand, and with individual projects on the other, the World Bank has phased out a total of 58,851 tonnes in ODP consumption and production in 2006. In the context of multi-year projects, the indicator of ODS consumption levels achieved was achieved. World Bank performance for all four implementation indicators is highlighted in Section IV of this annual report. 3. The World Bank performed well in terms of the three "administrative" indicators for 2006. The 2006 Progress Report was submitted on time. In its 2006 Business Plan, the Bank committed to submit to the Executive Committee 100 percent of PCRs for the number of projects completed in the 2006 PCR reporting period. In the PCR reporting period (July 2005-June 2006), seven individual investment and non-investment projects completed and a total of 27 PCRs were submitted, meaning that the Bank achieved this target by nearly 400 percent. The Bank met the PCR target set with the Senior Monitoring and Evaluation Officer by 84 percent. 4. According to Decision 41/93, the MLF Secretariat was requested to continue to monitor traditional indicators of performance on the basis of trend analysis. These indicators include disbursement, value of projects approved, cost of project preparation, cost-effectiveness, distribution of projects among countries, speed of first disbursement, speed of completion and net emission due to delays. 2006 outcomes in relation to these traditional indicators are also provided in Section IV. 1One project (a multi-year project in Chile) was cancelled and another project was transferred in 2006. 2 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT 2 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 Table I-1: Annual Summary % of % of Estimated No. of Consumption Consumption Production Production Support Cost Year No. % Consump- Production Approved Funds Disbursed % of Funds Disbursement in Support Costs Approvals ODP to be ODP Phased ODP to be ODP Phased Adjustment (US$) Balance (US$) Adjustments Approved Completed Completed tion ODP ODP Funding (US$) (US$) Disbursed Current Year Approved (US$) * Phased Out* Out Phased Out* Out (US$) Phased Out Phased Out (US$) Disbursement during Implementation 1991 15 15 100% 536 600 112% 0 0 0% 4,180,000 -126,208 4,053,792 100% 0 0 0 0 1992 46 46 100% 18,069 17,904 99% 0 0 0% 27,314,000 -3,156,902 24,157,098 100% -1 0 0 0 1993 28 28 100% 1,745 1,997 114% 0 0 0% 25,736,520 917,527 26,654,047 100% 0 0 0 0 1994 51 51 100% 8,794 9,192 105% 1,200 1,200 100% 45,017,887 -7,971,315 37,046,572 100% 0 0 0 161,465 1995 77 76 99% 3,553 3,903 110% 0 0 0% 50,409,887 -6,929,299 43,192,537 99% 288,052 288,052 3,655,461 -680,945 1996 54 54 100% 3,605 3,312 92% 0 0 0% 34,252,428 -5,032,389 29,220,039 100% 0 0 4,452,817 -621,460 1997 92 91 99% 16,729 16,678 100% 11,739 11,739 100% 63,042,202 -8,183,650 54,125,046 99% 733,505 116,404 7,823,487 -1,056,283 1998 57 55 96% 8,796 8,526 97% 5,826 5,826 100% 41,105,054 -3,277,071 37,209,146 98% 618,836 148,478 4,780,697 -397,313 1999 72 68 94% 8,008 7,012 88% 11,468 11,468 100% 58,562,577 5,788,593 63,821,777 99% 529,393 255,871 6,198,688 356,809 2000 66 64 97% 2,978 3,260 109% 8,793 8,793 100% 38,225,604 -1,119,319 36,635,671 99% 470,614 95,521 3,718,868 -140,900 2001 28 28 100% 6,067 6,067 100% 7,864 7,868 100% 48,091,203 6,329,449 53,716,923 99% 703,729 703,729 4,434,398 565,578 2002 30 27 90% 6,480 6,440 99% 7,173 7,175 100% 64,668,387 -490,167 57,443,214 90% 6,735,006 4,839,124 5,627,501 -68,603 2003 20 20 100% 3,946 3,958 100% 7,421 7,421 100% 68,609,603 3,446,243 62,030,389 86% 10,025,457 4,828,218 5,474,660 257,499 2004 26 19 73% 4,451 3,221 72% 16,083 16,083 100% 75,554,839 1,625,000 57,135,446 74% 20,044,393 8,532,236 5,829,594 121,875 2005 23 9 39% 19,343 22,392 116% 46,223 46,292 100% 75,491,593 -806,183 44,648,348 60% 30,037,062 12,523,327 5,823,215 -62,181 2006 19 0 0% 1,240 493 40% 18,444 18,212 99% 65,643,591 0 21,915,000 33% 43,728,591 22,571,854 4,878,274 0 Sub-Total 704 651 92% 114,340 114,955 101% 142,233 142,076 100% 785,905,375 -18,985,691 653,005,047 85% 113,914,637 54,902,813 62,697,660 -1,564,460 Disbursement after Completion** 1991 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 1992 4 4 100% 372 372 100% 0 0 0% 1,344,000 -66,845 1,277,155 100% 0 0 0 0 1993 20 20 100% 574 913 159% 0 0 0% 11,938,000 -1,991,418 9,946,582 100% 0 0 0 32,940 1994 2 2 100% 100 100 100% 0 0 0% 1,857,200 -363,807 1,493,393 100% 0 0 0 0 1995 2 2 100% 21 21 100% 0 0 0% 187,600 0 187,600 100% 0 0 10,296 0 1996 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 1997 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 1998 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 1999 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2000 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2001 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2002 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2003 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2004 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2005 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 2006 0 0 0% 0 0 0% 0 0 0% 0 0 0 0% 0 0 0 0 Sub-Total 28 28 100% 1,067 1,406 132% 0 0 0% 15,326,800 -2,422,070 12,904,730 100% 0 0 10,296 32,940 Retroactive 15 15 100% 856 851 99% 0 0 0% 8,673,221 -1,529,995 7,143,226 100% 0 0 533,917 -96,546 Time-sens 168 160 95% 71 51 72% 0 0 0% 21,776,134 -6,914,893 14,130,269 95% 730,972 481,430 14,252,724 -1,288,489 GRAND 915 854 93% 116,334 117,263 101% 142,233 142,076 100% 831,681,530 -29,852,649 687,183,273 86% 114,645,608 55,384,244 77,494,598 -2,916,555 TOTAL * Does not include the 7 transferred and 92 closed projects included in the database. ** Does not include projects that were implemented before Executive Committee approval. Note 1: Agency and National implementation is not distinguished in this table. Note 2: Retroactive projects and time-sensitive accounts are provided for all years as one cumulative figure (not included in annual data). 3 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 B. Summary of Data by Project Type (CPG, DEM, INS, INV, PRP, TAS, TRA) 5. Table I-2 summarizes the entire portfolio of World Bank project approvals, adjustments and disbursements by type of project or activity. As can be seen from the table, the major proportion of the Bank's approved funding to date has gone for investment projects, US $772,298,282. The amounts allocated for institutional strengthening and country program development are US $5,885,868 and US $2,383,906 respectively. Table I-2: Summary of Data by Project Type Est. Dis- No. of Funds % of No. % Approved Adjustment Balance bursement in Type Approvals Disbursed Funds Completed Completed Funding (US$) (US$) (US$) Cur. Year * (US$) Disbursed (US$) Country Programme Preparation 29 29 100% 2,383,906 -756,174 1,627,732 100% 0 0 Demonstration Projects 4 2 50% 8,289,210 -181,550 1,040,302 13% 7,067,358 319,636 Institutional Strengthening Projects 32 25 78% 5,885,868 -152,949 5,001,947 87% 730,972 481,430 Investment Projects 548 509 93% 772,298,282 -18,126,278 648,782,555 86% 105,389,449 53,778,350 Project Preparation 254 250 98% 29,542,262 -7,601,026 21,812,536 99% 128,700 128,700 Technical Assistance Projects 44 35 80% 12,596,002 -2,654,438 8,612,434 87% 1,329,130 676,127 Training Projects 4 4 100% 686,000 -380,234 305,766 100% 0 0 Total 915 854 93% 831,681,530 -29,852,649 687,183,273 86% 114,645,608 55,384,244 * Excludes Closed and Transferred Projects. 4 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 C. Multi-year Agreements 6. In 2006, the World Bank received approval of two new multi-year agreements (MYAs) by the Executive Committee in Tunisia and Vietnam. These new approvals, bring the number of multi- year projects under World Bank implementation to 25 (including two national CFC phaseout plans where the World Bank is not the lead agency). This figure excludes one sector plan for methyl bromide use in Chile that was cancelled in July 2006 after the country withdrew the project. 7. Tunisia is the newest country to be included in the list of recipients of sector or national ODS phaseout plans implemented under the Bank. Following the completion of its Country Programme Update at the end of 2005, the Government of Tunisia put forward a request to the Executive Committee for approval of a National ODS Phaseout Plan (NOPP). In July 2006, the Executive Committee approved in principle US$1,135,395 to phase out a total of 342 ODP tonnes. The NOPP will address remaining CFC consumption in the aerosol, foam manufacturing sector, and the refrigeration service sector. It will also address the issue of introducing non-CFC MDIs into Tunisia. Tunisia is one of a few countries with halon imports and in order to assist the industry and the critical users, a technical assistance program is included for the halon sector. 8. The Government of Vietnam received the approval of another multi-year agreement worth US $ 1,098,284 million in principle to gradually phase out 85 ODP tonnes of consumption of methyl bromide. The Government, through the Plant Protection Department has already initiated a review of existing regulations in order to strengthen the monitoring system for tracking the use of methyl bromide within the country. The country also plans to establish a schedule for annual methyl bromide import quotas for non-QPS applications in 2007. 9. In terms of ongoing multi-year projects, 17 annual plans were approved in 2006 worth nearly US $64 million. These consist of production closure projects as well as national and sector ODS phaseout plans. All countries met their annual consumption or production targets for annual programs under World Bank implementation covering 2005 and 2006, where data is already available and verified. However, in one sector plan, the approved milestone corresponding to consumption phaseout targets was not achieved. The 2006 Annual Plan for the China Foam Sector Plan was to have contracts signed by the end of 2006 to cover 600 ODP tonnes of CFC phaseout. However, all efforts were spent in fulfilling the 2004 and 2005 contract amounts in 2006. China is adopting a new provincial approach for foam phaseout (subject to Executive Committee clearance) and has expressed its confidence that all phaseout contract commitments can be met by the end of 2007. 10. Other sector plans in China for chemical process agent applications, CTC, CFC production, and TCA continue implementation. With the approval of the 2007 Annual Program for the Sector Plan for Halon Phaseout in China only two more tranches of funding remain. 2006 marks the first year that production of halon 1211 has ceased in China ­ with the closure of the last two remaining halon 1211 producers. 5 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2006 11. In regards to the Sector Plan for Phaseout of ODS in Phase I of Chemical Process Agent (PA) Applications and Carbon Tetrachloride Production, permitted CTC production levels were revised in 2006 to take into account the new PA Phase II agreement and the Accelerated Phaseout Plan of CFC funded by the United States. Total allowable sum of production and imports of CTC was 28,662 ODP tons. Phaseout targets were met in 2006 and will be verified in 2007. 12. The chiller component of the Mexico National CFC Phaseout Plan (Lead Agency is UNIDO) completed in 2006. The objective of the chiller component was to allow the continuation of the successful bilateral chiller replacement project with the United Kingdom in Mexico. Funding was therefore added to the revolving fund created with the project and at the end of 2006, 19 chillers were replaced, significantly surpassing the target of 10. By the end of December 2006, the collection rate on loans was 100%. 13. Four Southeast Asian countries are implementing National ODS Phaseout Plans (NOPPs) under the Bank. The Philippines, the third of these countries to receive approval of a National CFC Phaseout Plan in November 2002, made significant progress in implementation in the servicing sector in 2006 ­ allowing it to come close to the stage of NCPP implementation of Thailand and Malaysia. Under the voucher scheme, the mechanism devised to deliver assistance to servicing shops, a total of 2,209 vouchers were issued nationwide as of the end of December 2006. This accounts to 73% of the total target of 3,030 vouchers for 2006. Hence, the PMU is now left with only 821 vouchers to be issued. After a slow start, implementation picked up with a number of measures taken by the Philippines, including training, marketing strategies and intensifying public awareness campaign activities to meet targets by area coordinators and the Environment Management Bureau Regional Offices. 14. The progress made in the servicing sector in the Philippines is now reflected in the rate of disbursement. Attuned to the concerns raised by the Executive Committee in the past on low rates of disbursement in some countries with MYAs, the Bank and the Philippines, as well as Malaysia have made significant progress in the rate of disbursement. More importantly, measures are in place to assist the servicing sector absorb the large cut in CFC supply in 2007. 15. Although Vietnam's NOPP has been approved for only one and half years as of December 2006, it has also progressed well. In 2006, the PMU signed separate memoranda of agreement with all other government agencies involved in the implementation of the project. This also included 20 memoranda of agreement with refrigeration and air-conditioning training centers, the Vietnam Register, and the Drug Administration Department. Moreover, one hundred letters of intent were signed by refrigeration and air-conditioning service shops and ten equipment vouchers have been given to these shops. Two sub-grant agreements for conversion projects were also signed in 2006, and conversion was completed for one of the two the same year. 16. Table I-3 presents a summary of multi-year agreements for projects under World Bank implementation. Additional country information is also found in Annex I of this report. 6 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2006 Table I-3: Multi-Year Projects ODP Actual ODP ODP Sector Date Planned Date of Funds Released Funds Total ODP Consump- Total ODP Actual ODP Funds Consump- Production Plan/National ODS Approved Completion including Disbursed to Consumption to tion Allowed Production to Production for Country Committed by tion for Allowed for Phase-Out Plan (Original (Completion of Present Year by the Country be Phased-out for for the be Phased-out Reporting ExCom (US$) Reporting Reporting (Title) Approval) the entire plan) ExCom (US$) (US$) the Plan Reporting for the Plan Year* Year* Year* Year* Antigua CFC phase-out Barbuda management plan Dec-04 Dec-08 97,300 69,400 - 1.80 1.40 1 - - - CFC production Argentina closure plan Nov-02 Dec-09 8,300,000 6,300,000 3,349,315 - - - 3,020 1,647 National CFC phase- Argentina out plan Nov-05 Dec-06 500,000 500,000 - 1.50 1,997.00 - - - - Terminal CFC Phaseout Plan for Bahamas The Bahamas Dec-01 Dec-09 560,000 560,000 240,000 66.00 14.00 12 - - - Phase-out of all the remaining uses of methyl bromide in soil application pest Chile control Apr-05 Apr-13 2,547,156 691,703 - 136.30 170.00 - - - China Halon Sector Nov-97 Dec-10 62,000,000 61,600,000 50,380,000 24,480 1,000 1,000 30,060 1,000 1,000 CFC Production China Sector Mar-99 Dec-10 150,000,000 135,000,000 104,500,000 - - - 44,931 13,500 13,498 China Foam Sector Dec-01 Dec-10 53,846,000 47,636,000 25,650,500 14,143 7,000 7,000 - - - China TCA Sector Jul-04 Jul-15 2,100,000 1,400,000 750,000 - - - 113 79 78 CTC/PA Sector China Phase I Nov-02 Dec-10 65,000,000 56,000,000 48,500,000 11,160.2 493.0 461.4 51,935 32,044 28,470 CTC/PA Sector China Phase II Nov-05 Dec-09 46,500,000 25,000,000 13,500,000 5,951.0 6,945.0 5,825.2 - - - National CFC phase- Ecuador out plan Dec-03 Dec-08 1,689,800 1,444,055 355,682 246.0 80.0 - - - CFC production sector gradual phase- India out project Nov-99 Jan-10 82,000,000 70,000,000 63,416,946 - - - 22,588 7,342 6,964 CTC phase-out plan for the consumption and production India sectors Jul-03 Jan-10 38,100,954 27,656,267 16,258,803 11,505.00 1,147 1,129.00 11,206 1,147 1,129 7 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2006 ODP Actual ODP ODP Sector Date Planned Date of Funds Released Funds Total ODP Consump- Total ODP Actual ODP Funds Consump- Production Plan/National ODS Approved Completion including Disbursed to Consumption to tion Allowed Production to Production for Country Committed by tion for Allowed for Phase-Out Plan (Original (Completion of Present Year by the Country be Phased-out for for the be Phased-out Reporting ExCom (US$) Reporting Reporting (Title) Approval) the entire plan) ExCom (US$) (US$) the Plan Reporting for the Plan Year* Year* Year* Year* Phase-out of residual CFCs in the Indonesia foam sector Apr-04 Dec-07 2,957,564 2,922,564 1,421,587 352 222 - - - Refrigeration sector phase-out plan: MAC servicing Indonesia sector Nov-02 Dec-08 4,317,000 4,317,000 3,570, 842 915 475 - - - National CFC Malaysia phaseout plan Dec-01 Dec-09 11,517,005 10,692,005 7,597,275 1,910.51 597.68 535.325 - - - National CFC phase- out plan: Chiller Mexico Subsector Apr-05 Apr-07 500,000 500,000 500,000 - - - - - - National CFC phase Philippines out plan Nov-02 Nov-10 10,216,876 10,106,876 1,415,976 2,017.60 1,360.00 681.41 - - - National CFC Thailand phaseout plan Dec-01 Dec-09 14,728,626 13,243,626 5,846,287 3,107.5 1,126.63 431.72 - - - National methyl bromide phase-out Thailand plan Dec-04 Dec-12 2,901,600 1,959,205 22,297 241.8 146.6 145.98 - - - National ODS phase- Tunisia out plan Jul-06 Jul-10 1,135,395 790,000 - 342.0 342.0 - - - CFC Phase-out plan Turkey for Turkey Dec-01 Dec-09 9,000,000 9,000,000 6,385,753 977 0 0 - - - Phased reduction and closure of the entire CFC Venezuela production Dec-04 Dec-08 16,500,000 13,150,000 12,945,000 - - - 4,400 2,913 2,876 National CFC and halon phase-out Vietnam plan Apr-05 Apr-09 1,260,000 1,081,537 115,579 258.7 218.7 149 - - - National phase-out plan of out methyl Vietnam bromide Nov-06 Nov-15 1,098,284 230,000 - 85.2 - - - - - *Reporting Year in this case is 2006. 8 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2006 Table I-3: Multi-Year Projects (cont.) Antigua CFC phase-out Government of Antigua and Barbuda and the WB will negotiate Grant Agreement (GA) in Mar 07. A Bank mission will be discharged to the country to appraise readiness for Barbuda management plan project implementation and undertake final reviews of project arrangements with industry and the NOU during Q1 2007. GA expected to be signed Jun 07. CFC production closure FIASA met its production quota for 2005. 2006 target to be verified. Disbursements to the company have improved substantially. During 2006, a total of $2.3 million Argentina plan disbursed to FIASA. All funds approved by the MLF to date (i.e. $5.8 million) are expected to be disbursed to FIASA by end 07/early 08. National CFC phase- Selection of chillers to be replaced is expected to be done during 2007. A search for the best modality to address the overall chiller sector resulted in a postponement of chillers Argentina out plan to be selected. Terminal CFC Verification reports of CFC consumption in the Bahamas in 2004 and 2005 was 21.318 and 13 ODP MT, respectively. Phaseout in both years was ahead of agreed schedule. Phaseout Plan for The Import/export control system has already been established and made operational in 2006. Regulations to ban imports of CFC equipment and CFCs have already been Bahamas Bahamas promulgated. Phase-out of all the remaining uses of methyl bromide in soil Chile application pest control Project cancelled Jul 06. $691,703 returned to the MLF. Phaseout target was to reduce halon 1211 production and consumption to 0 MT; to maintain halon 1301 production and consumption to a maximum of 100 MT as per the revised AP phaseout schedule. Two complete closure contracts were signed with the remaining two halon 1211 producers and one quota reduction contract was signed with China Halon Sector the halon 1301 producer. Phaseout targets have been met and will be verified in 2007. China CFC Production Sector Project is proceeding as planned. CFC production phaseout target for 2006 has been met. WB will verify 2006 CFC production early 2007. As of Dec 31, 06, total contracts of 8,114 ODP tons of CFC-11 awarded for 11 industrial consolidation phaseout contracts for 7,166 ODP tons and 32 individual contracts to foam enterprises for 948 ODP tons for the 2002-05 APs. 32 industrial contracts signed in late Dec 06. For the 11 industrial consolidation phaseout contracts, all lead and small enterprises are no longer producing PU foam using CFC-11. CFC equipment either dismantled or converted to non-CFC production. Six of 11 projects started commercial foam production using substitutes. Other five projects are expected to be physically completed in '07 and '08. China will continue signing contracts with individual foam companies. New provincial approach will be adopted in '07 pending ExCom approval. SEPA is confident that all CFC-11 phaseout contract commitments can be met by '07. WB held back '06 disbursements as performance targets regarding contracts signed were not met. Disbursements from the WB will resume as soon as conditions China Foam Sector are met. Three TCA closure contracts were signed in Dec 04. 78 ODP tons of TCA production quota was issued to the only remaining producer in 2006. Three TA activities were China TCA Sector designed and completed. 2005 targets met. Permitted CTC production in '06 revised taking into account the new PA II Agreement and APP agreement. A total max. allowable sum of production and China CTC/PA Sector Phase I imports of CTC was 28,662 ODP tons. Consumption for PA I will be kept at same level as '05. Phaseout targets have been met and will be verified in early '07. CTC/PA Sector Phase China II 2005 AP was combined with 2006 AP, which is under implementation. NCPP is advancing satisfactorily and the country has been meeting its CFC consumption commitments. By Dec 06, $355,682 disbursed and an additional $743,877 National CFC phase- committed (i.e. contracts signed) and are expected to be disbursed by mid-08. NOU and WB are working on a program to replace all existing chillers in Ecuador. This latter Ecuador out plan program is expected to cost around $350,000. Next AP will be presented to the 52nd ExCom Meeting. 2006 consumption not yet verified. CFC production sector Implementation of the CFC Production Closure project remains satisfactory, with 2006 CFC production levels within the allowable limit, in accordance with the agreed gradual phase-out Annual Program. Activities under the TA program have been critically redefined to address changing national needs in light of reduced CFC supply and continued demand. India project Project is focusing on aligning production with CFC consumption and on developing a protocol to address monitoring and verification requirements beyond 2010. CTC phase-out plan for 2005 verification of CTC production and consumption completed as scheduled. Levels of CTC production and consumption in 2005, excluding the quantity stockpiled for the consumption and feedstock use in the following years, are well under the agreed targets. 2006 Verification of CTC production and consumption will be carried out during Q1 of 2007. India production sectors Verification report will be submitted to the ExCom in Jul 07. 9 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2006 Phase-out of residual CFCs in the foam Indonesia sector Annual Program submitted to MLF (coordinated by UNDP). Actual 2006 consumption figure in sector not yet finalized. Refrigeration sector phase-out plan: MAC Indonesia servicing sector Annual Program submitted to MLF (coordinated by UNDP). Actual 2006 consumption figure in sector not yet finalized. Implementation of MAC sector component is well underway and voucher programs for MAC basic tools and R&R machines are in progress. As of Dec. 06, 3035 workshops registered and certified as part of the certification of service technicians program. 80% of vouchers distributed and MAC tools ordered thru qualified suppliers. With regard to distribution of R&R units, as of Dec. 06, 1,262 visits to workshops had been conducted by DOE. Of those, only 689 workshops will receive vouchers for R&R units. Implementation of Refrigeration Servicing component is in progress. Group coordinator has completed sector's action plan and implementation schedule in Mar. 06. Six National CFC phaseout Authorized Training Centres (ATCs) have been selected from various parts of Malaysia. Training manual has been completed and qualified suppliers have been selected. First Malaysia plan six ATCs were trained in Dec.06. National CFC phase- out plan: Chiller Funds disbursed to FIDE. Funds were added to the rotating fund created with the first tranche. By the end of '06, 19 chillers were replaced (the target was 10), and as of Dec Mexico Subsector 06, collection rates on loans were 100%. In 2006, manufacturing sector was nearly done with an umbrella project and 2 other subprojects to be completed in '07. For MDIs, personnel being recruited to assist Bureau of Food & Drug in implementing order on transition from CFC-based to CFC-free MDIs. Servicing sector: 2,209 vouchers issued to service shops thru voucher scheme; 65 refrigerant identifiers distributed to regional EMB and Land Transport offices and roadside inspection conducted. Several policies instituted in '06 to complement servicing National CFC phase sector investment activities including registration system for CFC distribution chain, MAC inspection requirements, and service shop accreditation system. Procurement for Philippines out plan reclamation scheme half-way completed; agreement between DENR and operator reached. Launch expected in '07. 2006 consumption reduction targets met (to be verified). Implementation of individual projects under aerosol, solvent and MDI sectors completed. Implementation of group project for phasing out 1,1,1 TCA by the garment sector almost completed and final report submitted for WB approval. MAC servicing sector program has progressed. Total of 4,568 technicians from 3,194 service shops trained and National CFC phaseout 2,705 vouchers for basic MAC maintenance tools distributed to certified workshops. Of these, about 80% service shops have received equipment. Implementation of Thailand plan subprojects under the foam sector has advanced. Thirty-two individual enterprises and additional 14 enterprises in a group project will be converted. National methyl Project Management Unit of the National Methyl Bromide Phaseout Plan established. Project orientation workshop conducted in Dec. 06 for DOA staff and stakeholders. Thailand bromide phase-out plan Training activities for beneficiaries will be conducted in mid 2007. National ODS phase- Tunisia out plan Grant Agreement will be amended in early 2007 to permit implementation of the NOPP. WB mission planned in Apr 07 to launch activities. Chiller conversion of 2 companies completed. Chiller, R&R, end-user and management components of the project continue, with 4 chiller contracts and 1 end-user contract CFC Phase-out plan for signed in 2006. Contract signed for MoEdu for the implementation of the 3rd phase of training. Training, chiller, R&R, end-user and management components continue. Turkey Turkey Newly appoved 2007 AP is the last tranche of the overall project. Phased reduction and approved by the ExCom under this project, and $12.945 have been disbursed to the country. 3rd Tranche phaseout (2006) will be verified in Feb 07. closure of the entire Venezuela CFC production Verification of 2005 CFC consumption completed May 06. SGAs signed in 2006 with foam and petroleum enterprises. Foam enterprise completed its conversion Dec 06 for National CFC and complete phaseout of CFC in the foam sector in Vietnam. Procurement of equipment for training centers and vehicle inspection underway. Voucher scheme to distribute Vietnam halon phase-out plan service tool kits launched in 2006. Preliminary data indicates that actual consumption in 2006 was 159 ODP MT against the target of 200 ODP MT. Newly approved. Grant amendment process to incorporate this new project into existing GA between Vietnam and the WB is underway. Amendment is expected to be National phase-out plan completed by Jun 07. Plant Protection Department has initiated a review process for its existing regulations in order to strengthen monitoring system for tracking use of Vietnam of out methyl bromide methyl bromide within country. Preparation of project implementation arrangements underway. 10 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 D. Sector Phaseout by Country 17. The Bank has implemented and is implementing a few projects that will result in sector- wide or nation-wide ODS phaseout but which are not projects with multi-year agreements. With one-time funding by the Executive Committee, these projects aim, nonetheless, to entirely phase out the consumption of ODS through investment activities and policy measures in a sector or country- wide. 18. The Jordan National ODS Phaseout Plan (NOPP) approved at the 38th Meeting of the Executive Committee and scheduled for completion in 2009 is well under implementation. All foam activities are now completed and activities in the MDI, MAC and solvents sectors continue. For MDIs, the Arab Center for Pharmaceutical Aerosol Products has completed its testing of non- MDI pharmaceutical products and is in the process of re-registering its products with the Ministry of Health. HFC-134a has been selected as the propellant. A contract for MAC recycling equipment was signed and the equipment will be procured, and training conducted in 2007. Training in the solvent sector has commenced. 19. The commercial refrigeration sector conversion project in China that covers as a group, the last five manufacturers of CFC-based compressors, is nearly completed with the conversion of the last remaining enterprise done in 2006. However, the project could not complete in 2006 as had been planned because of remaining technical assistance activities, including a performance audit, a summary workshop, ODS phaseout supervision (such as enterprise visits or local Environmental Protection Bureau training) that will be now completed in 2007. 20. Other "one-off" sector projects that continued project implementation in 2006 include a national strategy for phasing out the use of CFC in the aerosol sector for Indonesia (which forms part of the country's NCPP) and, a national methyl bromide phaseout strategy in the Philippines. 21. Finally in 2006, two umbrella projects in Pakistan to completely phase out remaining CFC use in the refrigeration and foam manufacturing sectors for a combined total phaseout of 288 ODP tonnes. The completion of these projects marks the end of the Pakistan ODS Program with the World Bank. II. PROJECT COMPLETIONS SINCE LAST REPORT Projects completed during this reporting period (January 1, 2006 to December 31, 2006) are highlighted in Table II-1 below. 11 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 A. ODP Phased Out Since Last Report 22. The total quantity of ODP phased out in association with the 22 projects completed during the reporting period, including three institutional strengthening projects with phaseout, amounts to 51,136 tonnes ODP of consumption and production. Of this phaseout, 24,527 tonnes ODP was achieved in 2006. Phaseout from ongoing projects in 2006 is 34,324 ODP tonnes of consumption and production. Completed projects in Table II-1 are 96 percent disbursed, leaving a balance of US$1.35 million. Sixty percent of this balance is for multi-year projects with completed annual programs. B. Non-Investment Project Completions Since Last Report 23. Country Programs: There were no new completions in 2006 for country programs. 24. Technical Assistance: One technical assistance activity completed in December 2006. Indonesia received assistance from the MLF for strengthening its import and export control system in July 2002. During implementation of this project, the Government of Indonesia was able to make good progress in improving its import licensing and quota system to monitor and control ODS import. Revised draft to existing regulation agreed upon by The Ministry of Trade and other relevant government agencies agreed upon revision to the existing regulation. The new (revised) regulation was adopted in June 2006 ("24/M/DAG/PER/6/2006 ­ Provision of Ozone Depleting Substance Import"). In order to afford clarity to the implementation of the regulation, Standard Operating Procedures were drafted through the project. 25. Training: The Bank hosted its Tenth Annual Financial Agents Workshop in June 2006 for country counterparts who are responsible for project execution, its financial agents, as well as for government officials, in view of their increasing prominence in project implementation through sector and national ODS phaseout plans. The theme of the workshop was "The 2007 85% Reductions: Managing Consumption to Meet Targets," in view of emerging issues for governments to deal with as the supply of CFC dwindles. Discussions therefore centered on illegal imports; the mixing of refrigerants to capitalize on high costs of substitutes by various entities in the supply chain; the disconnect between small import quotas and how supplies flow into a country; questions of enforcement and litigation, as well as associated mandates of various government agencies; and applicability and use of equipment and tools by beneficiaries to comply with Government policy ­ in the context of country experiences, lessons learned and sustainability. 12 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table II-1: Project Completions During Reporting Period Planned Date of Date of ODP Date Approved Adjust- Funds % Funds Commit- Date First Financial Project Name Region Project Number Phased Compl. Funding ment Disbursed Dis- Balance ment in Approved Disburse- Com- Out* (Actual) (US$) (US$) (US$) bursed Cur. Year ment pletion (US$) Strategy for gradual phase-out of LAC ARG/PRO/45/INV/143 1,373 Apr-05 Apr-06 300,000 0 0 0 300,000 300,000 CFC-11 and CFC-12 production: 2005 annual programme Demonstration project for testing LAC CHI/FUM/25/DEM/35 0 Jul-98 Jun-99 Dec-06 348,130 0 348,056 100 74 methyl bromide alternatives in soil treatment applications for tomatoes and peppers Extension of the institutional LAC CHI/SEV/45/INS/157 8 Apr-05 Dec-05 Apr-06 93,275 0 93,275 100 0 strengthening project (phase VI, second year) Extension of institutional LAC CHI/SEV/47/INS/159 8 Nov-05 Dec-06 Dec-06 93,275 0 93,275 100 0 strengthening (phase VI, year 2) Process agent sector plan (phase I): ASP CPR/PAG/46/INV/432 20,727 Jul-05 Dec-05 Jul-06 2,000,000 0 2,000,000 100 0 2005 annual programme Sector plan for CFC production ASP CPR/PRO/45/INV/428 6,500 Apr-05 Dec-05 Apr-06 13,000,000 0 13,000,000 100 0 phase-out: 2005 annual programme Strengthening of import/export ASP IDS/SEV/37/TAS/149 9 Jul-02 Dec-03 Dec-06 Dec-06 110,000 0 110,000 100 0 control CTC phase-out for the consumption ASP IND/PHA/45/INV/386 19,744 Apr-05 Jul-06 399,045 0 0 0 399,045 339,045 and production sectors: 2005 annual programme CFC production sector gradual ASP IND/PRO/45/INV/390 1,882 Apr-05 Nov-05 Apr-06 5,850,000 0 5,850,000 100 0 phase-out: 2005 annual implementation plan Umbrella project for the conversion LAC MEX/ARS/41/INV/116 64 Dec-03 Oct-05 Mar-06 Mar-06 252,340 0 252,340 100 0 of CFC-11, CFC-12 and CFC-113 into HFC, HCFC, HFE for technical aerosols at Tecnosol, Envatec and Dimmex National CFC phase-out plan: 2005 LAC MEX/PHA/45/INV/124 0 Apr-05 Feb-06 Feb-06 Feb-06 500,000 0 500,000 100 0 work programme Sterilization group project to LAC MEX/STE/40/INV/115 20 Jul-03 Dec-05 Jun-06 Jun-06 288,700 0 266,132 92 22,568 replace CFC-12 technology-based sterilization equipment by alternative technologies in the hospital medical sterilization sector 13 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Planned Date of Date of ODP Date Approved Adjust- Funds % Funds Commit- Date First Financial Project Name Region Project Number Phased Compl. Funding ment Disbursed Dis- Balance ment in Approved Disburse- Com- Out* (Actual) (US$) (US$) (US$) bursed Cur. Year ment pletion (US$) Umbrella project: Conversion to ASP PAK/FOA/23/INV/20 240 Nov-97 Dec-02 Oct-06 Oct-06 1,600,000 0 1,390,525 87 209,475 CFC-free technology in the manufacture of rigid polyurethane foam (thermoware) Terminal umbrella: Conversion to ASP PAK/FOA/25/INV/25 106 Jul-98 Dec-02 Oct-06 Oct-06 718,900 0 557,052 77 161,848 HCFC-141b and water blown technology in the manufacture of rigid polyurethane foam (thermoware) Phase-out of the use of CFCs in ASP PAK/FOA/41/INV/58 107 Dec-03 Nov-05 Dec-06 658,973 0 633,052 96 25,921 25,921 remaining foam enterprises: Pakistan Insulation, Simpson Wire, HEPCO, Indus Plastic, Workman and Thermocraft Engineering Conversion to CFC-free technology ASP PAK/REF/23/INV/19 118 Nov-97 Jul-04 Dec-06 Dec-06 841,750 0 841,750 100 0 in the manufacture of polyurethane foam (domestic refrigeration) at Cool Industries Ltd. (Waves) Phaseout of the use of CFC-11 and ASP PAK/REF/42/INV/59 181 Apr-04 Aug-05 Dec-06 1,126,855 0 1,002,504 89 124,351 124,351 CFC-12 in the manufacture of refrigeration equipment at Dawlance, United Refrigeration, Ice Age and at 29 small enterprises Extension of the institutional ASP PHI/SEV/45/INS/78 0 Apr-05 Dec-05 Apr-06 May-06 90,567 0 90,567 100 0 strengthening project (phase IV, second year) Renewal of institutional AFR TUN/SEV/39/INS/43 20 Apr-03 Dec-03 Apr-06 Apr-06 242,667 0 242,667 100 0 strengthening project Preparation of the country AFR TUN/SEV/42/CPG/44 0 Apr-04 Dec-04 Jul-06 Jul-06 80,000 0 80,000 100 0 programme update Phase-out methyl bromide in the EUR TUR/FUM/31/INV/69 30 Jul-00 Jun-01 Jun-06 Dec-06 479,040 0 477,059 100 1,981 dried fig sector National CFC production closure LAC VEN/PRO/46/INV/106 0 Jul-05 Sep-05 Apr-06 8,100,000 0 8,000,000 99 100,000 100,000 plan (second tranche) TOTAL 51,136 37,173,517 0 35,828,254 96 1,345,263 889,317 * Does not include phaseout achieved in 2006 by projects that were considered ongoing in 2006. 14 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 III. GLOBAL AND REGIONAL PROJECT HIGHLIGHTS A. Global Projects 26. The World Bank has one global project, the Global Chiller Replacement Project, that was approved by the Executive Committee at its 47th Meeting. US $6.9 million in project funding was provided to the Bank as seed money to replace CFC chillers in China, India, Indonesia, Jordan, Malaysia, the Philippines and Tunisia, as well as to set up a global fund which will mobilize funds for replacements in additional countries. 27. In 2006, project preparation activities for co-financing were undertaken for the India component which will be initiated first. The Global Environment Facility (GEF) project documentation was prepared, however, India has decided to integrate the chiller project into a larger programmatic framework (a low-carbon initiative) that would draw upon GEF resources at a later date. For carbon financing, the methodology has been developed and submitted to the CDM Executive Board and approval is expected in early 2007. 28. Various implementation arrangements in other priority countries (China, India, Malaysia, Philippines, Indonesia, Jordan & Tunisia) have been explored in 2006 because some of these countries have decided not to seek co-financing through the GEF under its climate change focal area. In 2007, concrete proposals for a way forward in the area of co-financing will be developed with the different countries. B. Regional Projects 29. The World Bank has no outstanding regional projects. 15 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 IV. PERFORMANCE INDICATORS A. Agency Performance Goals 30. Executive Committee Decision 41/93 requests Implementing Agencies (IAs) to employ nine weighted indicators to assess their annual performance. These indicators are classified as approval, implementation and administrative indicators. The basis for setting and measuring these indicators are the annual progress reports and annual plans of multi-year projects as implied in the background document to the new indicator system, UNEP/OzL.Pro/ExCom/41/80, as well as the IA business plans. 31. "Approval" indicators measure projects that received Executive Committee approval against those planned to be delivered as per multi-year agreements and the 2006 Business Plan. For the first approval indicator, 23 annual programs associated with existing (20) and new (3) multi-year agreements were targeted for approval in 2006 per the World Bank's business plan and in accordance with Executive Committee Decision 48/9(d)). The actual number of annual programs submitted was 19 (from 17 existing agreements and 2 new agreements) because annual programs for two existing multi-year agreements in Antigua and Barbuda and in the Philippines were not approved. The Antigua and Barbuda annual program could not be finalized because the Grant Agreement between the Bank and the country needs to be signed. In the case of the Philippines, the verification audit was not ready on time for submission to the 50th Executive Committee Meeting. The new multi-year agreement was for a China pharmaceutical aerosols sector plan that was submitted to the 50th Executive Committee but withdrawn. 32. The second approval indicator, the planned number of new individual projects (investment projects, RMPs, halon banks, institutional strengthening, technical assistance) for approval was set at 1 in the Business Plan. In 2006, 2 new individual activities were approved, meaning the World Bank accomplished this target. 33. There are four "implementation" indicators. The first implementation indicator measures performance in multi-year projects, namely whether milestone activities and ODS consumption and production levels were achieved as planned. In 2006, Bank partner countries executing the 21 existing multi-year agreements (prior to 2006) that were targeted in the business plan met their targeted ODS phaseout and policy milestones with the exception of one, the 2006 Annual Program for the foam sector plan in China where no contracts were signed against the 600 ODP tonnes planned CFC phaseout. (The 21 multi-year agreements include 1 agreement where an annual program was not due for submission in 2006.) 34. The second implementation indicator focuses on ODS phased out in individual projects versus what was planned in the progress report (this excludes multi-year project phaseout per MLF Secretariat guidance). The World Bank had targeted 2,288 ODP tonnes of phaseout in 2006 by individual projects based only on what projects were expected to complete in 2006. A total of 478.52 ODP tonnes were phased out by individual World Bank projects that completed in 2006 (the consumption phaseout for some of these projects that was achieved in previous years has been deducted from this figure). In 2006, total consumption and production phaseout was 58,851 ODP tonnes. 16 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 35. For the third implementation indicator, "project completion," the World Bank expected 20 investment and non-investment projects to be completed in 2006. This excludes project preparation and core unit approvals. A total of 22 projects reached actual completion in 2006 permitting the target to be met. 36. The fourth implementation indicator, "Percentage of policy/regulatory assistance completed vs. that planned" was achieved as policy and regulatory assistance was provided in the context of all sector and national ODS phaseout plans, as well as institutional strengthening projects. 37. There are three "administrative" indicators. The Bank met all of two of the three administrative targets. For Speed of Financial Completion, the Bank has shown that the average number of months from project completion to financial completion was well within the 11 months from the required date in its 2006 Business Plan. 38. The Bank committed to submit to the Executive Committee 100 percent of PCRs for the number of projects completed in the 2006 PCR reporting period in its 2006 Business Plan. In the 2006 PCR reporting, seven individual investment and non-investment projects completed and a total of 27 PCRs in the same period were submitted, meaning that the Bank more than achieved the target. If applying the target set with the Senior Monitoring and Evaluation Officer of submitting 32 PCRs in 2006, then the Bank has met the target by 84 percent. Finally, the 2006 Progress Report was submitted on time for achievement of the third administrative indicator. 39. Table IV-1 summarizes the World Bank's performance relative to indicators per Decision 45/9(b) on the Bank's 2006 Business Plan. 17 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-1: World Bank Performance Goals Category of Item Weighting 2006 Target 2006 Actual Performance Indicator Approval Number of annual programmes of existing multi-year agreements 20 23 19 approved vs. those planned Approval Number of individual projects/activities approved vs. 20 1 2 those planned Implementation Milestone activities completed (e.g., policy measures, regulatory assistance)/ODS levels achieved 20 20 19 for approved multi-year annual tranches vs. those planned Implementation ODS phased-out for individual projects vs. those planned per 5 2,288 MT 478.52 MT ODP progress reports ODP Implementation Project completion (pursuant to Dec. 28/2 for investment projects) and as defined for non-investment 5 20 22 projects vs. those planned in progress reports Implementation Percentage of policy/regulatory All countries with WB assistance completed vs. that multiyr projects in planned 10 N/A compliance and targets met per APs submitted and approved Administrative Speed of financial completion vs. that required per progress report 10 11 months 5 months completion dates Administrative Timely submission of project completion reports vs. those 5 100% 84% agreed Administrative Timely submission of progress reports and responses unless 5 100% 100% otherwise agreed 40. According to Decision 41/93, traditional indicators of performance are to be maintained for trend analysis. The 2006 outcomes are thus highlighted in the following paragraphs in terms of disbursement, value of projects approved, cost of project preparation, cost-effectiveness, distribution of projects among countries, speed of first disbursement, speed of completion and net emission due to delays. Table IV-2 summarizes the World Bank's performance relative to indicators on delivery speed, ODP phaseout and cost-effectiveness established for the business planning process. 18 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-2: World Bank Indicators of Implementation Progress Indicator Measure Unit 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Overall Delivery Signing Mos. 48 35 30 21 15 13 15 13 11 10 8 11 14 0 9 0 18 Speed First Disb. Mos. 47 43 35 27 22 22 27 21 21 24 17 18 18 13 10 5 25 Last Disb. Mos. 52 59 55 58 52 53 50 40 50 44 32 44 31 0 10 0 51 ODP Percent- Amount 77 100 117 103 100 92 100 100 100 102 100 101 100 94 105 95 101 Phaseout age Speed Mos. 62 56 44 50 43 42 44 36 40 42 21 24 16 21 23 15 39 Cost US$ per Average 8.61 0.92 11.54 3.03 9.69 7.25 1.84 2.26 2.67 3.04 3.46 3.68 5.47 3.19 0.67 2.59 2.46 Effective Kg ODP 41. Based on data from the 2006 Progress Report, the actual net emissions was calculated as 12,929 ODP tonnes. Actual cost of project preparation in 2006 was US$268,530 (excluding support costs), or, 0.4 percent of investment project approvals in 2006. Overall speed of ODS phaseout was, in 2006, 39 months. Actual overall speed of first disbursement is 25 months and total disbursement in 2006 was US$70 million, 10% higher than planned in the 2005 Progress Report. 42. Nineteen investment projects worth a total of US $65.6 million (excluding support costs) were submitted and approved in 2006. These projects will result in the phaseout of 19,684 ODP tonnes (including the phaseout of multi-year projects associated with the tranches approved in 2006). The average cost-effectiveness of the projects approved in 2006 is US $3.33 /kg ODP. As far as distribution among countries, 12 countries received approvals in 2006 meaning the Bank achieved the target by 86 percent. 43. The Bank completed 6 non-investment projects in the reporting period. The overall speed of first disbursement is 17 months at the end of 2006. Overall speed of completion is 34 months by the end of the reporting period. Total funds disbursed for non-investment activities (excluding demonstration projects) in 2006 are US$884,402. Table IV-3: World Bank Indicators of Implementation Progress ­ Non-Investment Indicator Measure Unit 1991-93 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Overall Speed of 1st Disb. Mos. 21 14 19 5 7 35 33 25 29 12 12 10 8 8 17 Delivery To Completion Mos. 33 24 28 0 14 109 100 26 45 37 12 29 13 12 34 19 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 B. Cumulative Completed Investment Projects 44. Since 1991, the World Bank's cumulative total of completed investment projects has grown to 509, resulting in the reduction in consumption of 103,998 tonnes ODP and in production of 113,361 tonnes ODP. Out of a total of US $635,762,839 of approved Multilateral Fund financing for completed projects, 94 percent of funds have been disbursed. The average number of months from approval to first disbursement has been 25, the average number of months from approval to completion has been 40, at an average cost-effectiveness of US $2.92/kg. These averages include projects both before and after initiation of the umbrella grant agreement approval process. 45. The number of investment projects completed in 2006 was 15. The following Table IV-4 provides a summary of completed investment projects at both a regional and sectoral level. 20 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-4: Cumulative Completed Investment Projects Avg. No. of Overall Cost- Approved Avg. No. of Consump- Production Months from Effective- No. of Funds + % of Funds Months from Item tion ODP ODP Approval to ness to the Projects Adjustment Disbursed Approval to Phased Out Phased Out 1st Dis- Fund (US$) Completion bursement (US$/kg.) GRAND TOTAL 509 635,762,839 94% 103,998 113,361 25 40 $2.92 Region Africa 16 4,715,834 94% 435 0 24 49 $10.84 Asia & Pacific 369 543,104,250 94% 96,859 109,128 25 40 $2.64 Europe 33 24,915,439 94% 3,348 0 12 20 $7.44 Latin America and Caribbean 91 63,027,316 97% 3,356 4,233 31 45 $8.31 Global n/a 0 0% 0 0 n/a n/a n/a Sector Aerosol 29 13,003,973 100% 19,616 0 29 45 $0.66 Foam 204 116,073,405 83% 22,478 0 26 43 $5.16 Fumigants 3 1,443,425 100% 117 0 12 47 $12.32 Halon 13 55,278,850 99% 30,129 29,988 18 26 $0.92 Multiple Sectors 4 2,605,995 100% 419 0 28 78 $6.23 Other 2 5,059,360 100% 404 0 28 41 $12.52 Phaseout Plan 22 53,995,319 74% 12,990 9,896 18 13 $2.36 Process Agent 6 42,330,316 100% 5,180 25,466 10 18 $1.38 Production 20 171,657,120 99% 0 48,011 9 10 $3.58 Refrigeration 176 163,970,641 100% 12,061 0 27 46 $13.59 Solvents 28 9,660,640 100% 562 0 29 27 $17.19 Sterilant 2 683,795 97% 41 0 16 27 $16.83 Implementation Characteristics Agency Implementation 0 0 0% 0 0 n/a n/a n/a National Implementation 509 635,762,839 94% 103,998 113,361 25 40 $2.92 Time or Objective-Sensitive Accounts Time-Sensitive 0 0 0% 0 0 n/a n/a n/a Objective-Sensitive 509 635,762,839 94% 103,998 113,361 25 40 $2.92 Disbursement Method During Implementation 471 617,493,038 94% 102,110 113,361 25 42 $2.87 After Implementation 23 11,126,575 100% 1,036 0 29 27 $10.73 Retroactive Funding 15 7,143,226 100% 851 0 24 1 $8.40 Note: The sum of each section (Region, Sector, etc.) equals the Grand Total. 21 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 C. Cumulative Completed Non-Investment Projects 46. Since 1991, the World Bank's cumulative total of completed non-investment projects has grown to 95. Out of a total of US $14,423,524 of approved Multilateral Fund financing, 100 percent of funds have been disbursed. As these are non-investment projects, funds are usually made available quickly, thus the average number of months from approval to first disbursement has been 18, the average number of months from approval to completion has been 33. 22 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-5: Cumulative Completed Non-Investment Projects Average Average Number Approved Funds Per Cent of Number of Number of of Months from Item plus Adjustment Funds Months from Projects Approval to First (US $) Disbursed Approval to Disbursement Completion GRAND TOTAL 95 14,423,524 100% 18 33 Region Africa 14 2,123,488 100% 12 31 Asia & Pacific 35 7,991,379 100% 19 38 Europe 6 767,512 100% 20 34 Latin America and Caribbean 28 3,334,249 100% 21 35 Global 12 206,896 100% 2 14 Sector Aerosol 2 372,662 100% 17 45 Foam 2 1,671,013 100% 34 51 Fumigants 2 428,130 100% 22 73 Halon 0 0 0% n/a n/a Multiple Sectors 1 53,792 100% 56 58 Other 0 0 0% n/a n/a Phaseout Plan 0 0 0% n/a n/a Process Agent 0 0 0% n/a n/a Production 0 0 0% n/a n/a Refrigeration 14 4,847,025 100% 42 58 Several 74 7,050,902 100% 12 26 Solvents 0 0 0% n/a n/a Sterilant 0 0 0% n/a n/a Implementation Characteristics Agency Implementation 42 2,034,628 100% 4 15 National Implementation 53 12,388,896 100% 27 47 Time or Objective-sensitive Accounts Time-Sensitive 45 2,800,528 100% 4 15 Objective-Sensitive 50 11,622,996 100% 28 49 Disbursement Method During Implementation 93 13,422,094 100% 18 33 After Implementation 2 1,001,430 100% 19 39 Retroactive Funding 0 0 0% n/a n/a Note: (1) Per decision 22/11(a)(vi), project preparation is not included as a non-investment project. (2) The sum of each section (Region, Sector, etc.) equals the Grand Total. 23 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 D. Cumulative Ongoing Investment Projects 47. Since 1991, the World Bank's cumulative total of ongoing investment projects is 39. Out of a total of US $117,067,507 of approved Multilateral Fund financing, 41 percent of funds have been disbursed. The average number of months from approval to first disbursement has been 18, the average number of months from approval to the current expected completion dates is 36, with an average cost- effectiveness of US $2.81/kg. 24 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-6: Cumulative Ongoing Investment Projects Avg. No. of % Funds Avg. No. of Avg. Length of Overall Cost- Approved Funds Est. Disburse- Months from No. of % of Funds No. of Projects % of Projects Expected to be Months from Delay in Project Effectiveness to Item + Adjustment ment + Funds Approval to Projects Disbursed Disbursing Disbursing Disbursed by End Approval to 1st Planned the Fund (US$) Disbursed Planned of 2006 Disbursement Completion (US$/kg.)* Completion GRAND TOTAL 39 117,067,507 41% 19 49% 83,621,703 71% 18 36 29 $2.81 Region Africa 1 790,000 0% 0 0% 79,000 10% 0 25 n/a $4.66 Asia & Pacific 29 109,355,008 42% 16 55% 79,223,839 72% 18 35 25 $2.86 Europe 2 1,250,000 12% 1 50% 702,494 56% 13 18 11 $8.33 Latin America and Caribbean 7 5,672,499 36% 2 29% 3,616,370 64% 22 45 50 $1.82 Global 0 0 0% 0 0% 0 0% 0 n/a n/a n/a Sector Aerosol 1 371,910 8% 1 100% 187,800 50% 12 41 n/a $5.31 Foam 3 8,430,640 43% 1 33% 5,993,013 71% 61 51 35 $5.01 Fumigants 3 2,189,205 1% 1 33% 347,297 16% 24 28 23 $37.29 Halon 4 12,931,000 9% 3 75% 6,911,887 53% 22 52 35 $0.74 Multiple Sectors 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Other 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Phaseout Plan 15 21,030,730 9% 4 27% 7,773,590 37% 20 30 21 $6.78 Process Agent 3 41,000,000 52% 2 67% 33,200,000 81% 7 31 8 $6.17 Production 6 24,300,000 58% 4 67% 22,755,000 94% 8 18 n/a $2.09 Refrigeration 4 6,814,022 78% 3 75% 6,453,116 95% 21 65 43 $6.47 Solvents 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Sterilant 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Implementation Characteristics Agency Implementation 0 0 0% 0 0% 0 0% n/a n/a n/a n/a National Implementation 39 117,067,507 41% 19 49% 83,621,703 71% 18 36 29 $2.81 Time or Objective-sensitive Accounts Time-Sensitive 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Objective-Sensitive 39 117,067,507 41% 19 49% 83,621,703 71% 18 36 29 $2.81 Disbursement Method During Implementation 39 117,067,507 41% 19 49% 83,621,703 71% 18 36 29 $2.81 After Implementation 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Retroactive Funding 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Note: The sum of each section (Region, Sector, etc.) equals the Grand Total. *Based on the ODS to be phased out according to the proposal. 25 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 E. Cumulative Ongoing Non-Investment Projects 48. Since 1991, the World Bank's cumulative total of ongoing non-investment projects is 18. Out of a total of US $11,272,117 of approved Multilateral Fund financing, 72 percent of funds have been disbursed. The average number of months from approval to first disbursement has been 29; the average number of months from the date of approval to the current expected completion date is 63. 26 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Table IV-7: Cumulative Ongoing Non-Investment Projects % Funds Avg. No. of Avg. No. of Avg. Length of No. of % of Estimated Expected to Months from No. of Approved Funds + % of Funds Months from Delay in Project Item Projects Projects Disbursements + be Disbursed Approval to Projects Adjustment (US$) Disbursed Approval to 1st Planned Disbursing Disbursing Funds Disbursed by End of Planned Disbursement Completion 2006 Completion GRAND TOTAL 18 11,272,117 19% 13 72% 3,621,926 32% 29 63 25 Region Africa 1 247,270 0% 0 0% 80,000 32% n/a 26 n/a Asia & Pacific 7 2,094,321 58% 7 100% 1,788,247 85% 25 61 23 Europe 3 899,250 30% 2 67% 599,671 67% 18 60 32 Latin America and Caribbean 5 1,146,664 58% 4 80% 954,008 83% 41 77 39 Global 2 6,884,612 0% 0 0% 200,000 3% n/a 55 n/a Sector Aerosol 0 0 0% 0 0% 0 0% n/a n/a n/a Foam 0 0 0% 0 0% 0 0% n/a n/a n/a Fumigants 3 949,244 45% 3 100% 792,937 84% 43 86 34 Halon 6 1,879,070 48% 4 67% 1,319,338 70% 47 84 44 Multiple Sectors 0 0 0% 0 0% 0 0% n/a n/a n/a Other 0 0 0% 0 0% 0 0% n/a n/a n/a Phaseout Plan 0 0 0% 0 0% 0 0% n/a n/a n/a Process Agent 0 0 0% 0 0% 0 0% n/a n/a n/a Production 0 0 0% 0 0% 0 0% n/a n/a n/a Refrigeration 1 6,884,612 0% 0 0% 200,000 3% n/a 97 n/a Several 8 1,559,191 53% 6 75% 1,309,650 84% 10 34 11 Solvents 0 0 0% 0 0% 0 0% n/a n/a n/a Sterilant 0 0 0% 0 0% 0 0% n/a n/a n/a Implementation Characteristics Agency Implementation 1 0 0% 0 0% 0 0% n/a 12 n/a National Implementation 17 11,272,117 19% 13 76% 3,621,926 32% 29 65 26 Time or Objective-sensitive Accounts Time-Sensitive 8 1,559,191 53% 6 75% 1,309,650 84% 10 34 11 Objective-Sensitive 10 9,712,926 14% 7 70% 2,312,276 24% 45 86 36 Disbursement Method During Implementation 18 11,272,117 19% 13 72% 3,621,926 32% 29 63 25 After Implementation 0 0 0% 0 0% 0 0% n/a n/a n/a Retroactive Funding 0 0 0% 0 0% 0 0% n/a n/a n/a Note: (1) Per decision 22/11(a)(vi), project preparation is not included as a non-investment project. (2) The sum of each section (Region, Sector, etc.) equals the Grand Total. 27 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 V. STATUS OF AGREEMENTS & PROJECT PREPARATION (WHERE APPLICABLE), BY COUNTRY A. Agreements to be Signed/Executed/Finalized & When They Will be Ready for Disbursing 49. Projects with either new partner countries or with new operational modalities have required legal agreements between the country and the World Bank. As of the end of 2006, this was the case for Antigua and Barbuda, Vietnam and Tunisia. 50. Antigua and Barbuda is implementing a terminal CFC phaseout plan with the Bank. The preparation of the grant agreement to channel the grant funds from the Multilateral Fund to Antigua and Barbuda has been completed, however, the agreement was not signed as of the end of 2006 because negotiations could not be completed between Antigua and Barbuda and the Bank. Both parties will enter into negotiations in the first half of 2007 and the agreement is expected to be signed in June 2007. As mentioned in previous reporting, the grant agreement will have provisions that permit retroactive reimbursement. This will permit Antigua and Barbuda to be reimbursed for activities undertaken before the agreement was signed. 51. Vietnam received approval of MLF funding for a National CFC Phaseout Plan in April 2005 and a new grant agreement between Vietnam and the Bank was required. The agreement was signed in January 2006 and project implementation is proceeding. In addition, at the 50th Executive Committee Meeting, another project was approved for Vietnam to phase out methyl bromide consumption. The National Methyl Bromide Phaseout Plan requires changes to the grant agreement. The process to incorporate the new project into the existing grant agreement is underway. The amendment is expected to be completed in June 2007. 52. Finally, the existing Grant Agreement between the World Bank and the Government of Tunisia has to be amended to extend the duration of the umbrella project and to incorporate other elements required for implementing the newly approved (in July 2006) National ODS Phaseout Plan. The agreement was amended and is expected to be signed in early 2007. 28 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 B. Project Preparation by Country, Approved Amount, and Amount Disbursed 53. A list of active World Bank project preparation activities is presented in the table below. Total funds approved for these projects are US $255,500, of which US $133,050 has been disbursed. Planned commitments for these four project preparation activities are US $122,450. Table V-1: Active Project Preparation Planned % of First Approved Adjust- Funds Commit- Funds Balance Region Project Number Project Name Disburse- Funding ment Disbursed ment in Dis- (US$) ment Date (US$) (US$) (US$) Cur. Year bursed (US$) LAC ARG/ARS/45/PRP/142 Preparation of MDI phase-out 50,000 0 0 0 50,000 50,000 plan ASP CPR/ARS/43/PRP/415 Project preparation for Feb-06 135,500 0 126,150 93 9,350 9,350 pharmaceutical aerosol LAC ECU/FUM/45/PRP/34 Preparation of a methyl 25,000 0 0 0 25,000 25,000 bromide project ASP IDS/PHA/46/PRP/170 Project preparation funds for Sep-06 45,000 0 6,900 15 38,100 38,100 the development of a phase-out plan for the MDI sector Total 255,500 0 133,050 52 122,450 122,450 29 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 VI. ADMINISTRATIVE ISSUES (OPERATIONAL, POLICY, FINANCIAL, AND OTHER ISSUES) A. Meetings Attended 54. Table VI.1 indicates the meetings attended by World Bank Staff on all Montreal Protocol related work in 2006. Table VI-1: MP Meetings Attended by World Bank Staff in 2006 Dates City Meetings Attended January 23-24 Montreal, Canada Interagency coordination meeting March 3-5 Paris, France Halons Technical Options Committee meeting March 13-15 Montreal, Canada ODS Destruction Options Workshop April 3-7 Montreal, Canada 48th ExCom Meeting May 22-24 Bangkok, Thailand Joint Meeting of South Asia and South East Asia and Pacific Networks of Ozone Officers June 27-28 Washington, DC, USA 10th Annual Financial Agents Workshop June 29 Washington, DC, USA 22nd Meeting of the Ozone Operations Resource Group June 30 ­ July 1 Montreal, Canada 36th Meeting of the Implementation Committee July 3-6 Montreal, Canada 26th Meeting of the Open-Ended Working Group July 10-14 Montreal, Canada 49th ExCom Meeting August 22-23 Winnipeg, Canada Halons Technical Options Committee meeting October 2-5 Jakarta, Indonesia South East Asia and Pacific Network Meeting of Ozone Officers October 25-27 New Delhi, India 37th Meeting of the Implementation Committee October 30 - New Delhi, India 18th Meeting of the Parties to the Montreal Protocol November 3 November 6-10 New Delhi, India 50th ExCom Meeting December 4-7 Colombo, Sri Lanka South Asia Network Meeting of Ozone Officers 30 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 B. Implementing Agency and Other Cooperation 55. Cooperation and coordination by the World Bank with the three Implementing Agencies and Bilateral Agencies is ongoing and present directly through shared project implementation in national ODS phaseout plans such as in Indonesia, and in meetings and workshops occurring throughout the year. 56. The Governments of Mexico and Argentina requested the involvement of the Bank in a specific component of their respective NCPPs. This resulted in amendments to the existing Executive Committee agreements with the Lead Implementing Agency, UNIDO in 2005. Activities were completed in Mexico on chillers in 2006 but work continues in Argentina on the chiller subsector. 57. The Bank is also working with the Government of Sweden on two projects in East Asia ­ the NCPP in the Philippines and the halon management programme and halon banking project in Thailand (which was revised and resubmitted to the Executive Committee at its 47th Meeting). In addition, both UNDP and UNEP are working with the Bank and India on the technical assistance component of the halon phaseout sector plan and the CFC production closure project respectively. C. Other Issues 58. There are no other issues. MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Annex I COUNTRY DEVELOPMENTS Environment Department The World Bank 32 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 ANTIGUA AND BARBUDA Country Developments Consumption of Annex A Group I chemicals (CFCs) during the last two years has declined significantly. This phaseout has been achieved through the Government's policy to ban the import of CFC-containing equipment and the strict enforcement of the import/export licensing and quota system. The preliminary data indicates that the total consumption of Annex A Group I chemicals in 2006 was 1.24 ODP tons. Almost all CFC containing equipment has been replaced or converted during the last two years. Review of all proposed activities was subsequently done with the participation of the representatives of ABRACA. The draft first annual implementation plan was developed on the basis of the review mentioned in the above paragraph. The annual implementation plan covers activities to be carried out from July­ December 2007. The Grant Agreement is expected to be signed and effective no later than 1 July 2007. ARGENTINA Country Developments There were new changes in the government (Secretariat of Industry), and a new management unit for the project took office on March 2006. These new changes brought significant progress for the project during 2006. The total number of projects in the portfolio has reached 22, for a total amount approved by the MLF equal to US$22.2 million. Currently four projects are under execution: Halon Bank, Methyl Bromide, FIASA (production sector), and Neba (now called Ikala). These four projects are expected to eliminate 1,913.89 ODP tones. Two subprojects, Delta and Servex, achieved financial completion during 2006, and are now considered completed. Regarding FIASA, disbursements are back on track according to the disbursement plan established on December 2005. All funds approved by the MLF are expected to be disbursed to FIASA by the end of 2007. A new subgrant agreement was signed with INTA, the entity executing the Methyl Bromide program, on September 2006 to ensure completion of the subproject. Regarding NEBA, the company was bought by IKALA, and production was restarted on February 2006. IKALA intends to complete the project approved by the ExCom. Finally, with respect to the Halon Bank, all necessary equipment has been procured and the Bank is fully operational. Two new projects are under development for MDIs and for the accelerated shutdown of the Production Sector. Both these projects are included in the 2007-2009 World Bank Business Plan that will be submitted to the Executive Committee in early 2007. BAHAMAS 33 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Country Developments Based on the verification reports of 2004 and 2005 consumption, the Bahamas Terminal Phaseout Management Plan (TPMP) has achieved its targets in full. The verified consumption of 2004 and 2005 are 17.7 and 12.99 ODP tonnes, respectively. The preliminary data collected by the BEST Commission suggested that the total consumption in 2006 was 12 ODP tons, which is within the agreed target of 14 ODP tons. In 2006, the Montreal Protocol Act which include an establishment of an import/export control system for ODS was signed by the Government General. The import/export control system has since been put in place. Import duty of CFCs has been increased from 35% to 70% since May 31, 2006. During the past year, significant effort was made to inform public and stakeholders of the urgent need to phase out of CFCs in the Bahamas. Public awareness materials and activities had been carried out. In 2007, the project management unit (PMU) plans to develop a handbook for identifying ODS equipment and substances. This activity is part of the overall public education strategy to promote CFC phaseout and the implementation of the new ODS regulations. Additional training for customs officers will be carried out. Assessment of the need for additional investment in recovery and recycling equipment will be conducted. This activity is critical for ensuring that there would be sufficient recycled CFCs to meet the residual consumption in the servicing sector. Training of service technicians to retrofit CFC equipment will also be undertaken. This would assist the Bahamas to accelerate the reduction of its residual consumption of CFC in the servicing sector. BRAZIL Country Developments All approved projects are physically and financially completed. CHILE A. Country Developments In conjunction with the NOU, the World Bank has agreed to transfer the two remaining sub- projects, institutional strengthening and Bank of Halons, to another implementing agency during 2007. The implementation of the Bank of Halons project still awaits the issuance of the regulation to the law that establishes and import-quota system. As stipulated by the ExCom, money could not be disbursed for this project before a law and its regulation restricting import/export volumes entered into force. Although the law entered into force on March 2006, the issuance of regulation that set the procedures to achieve what was stipulated in the law has not entered into force yet. It is expected that the issuance of the regulation should be ready by mid 2007. 34 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 The ozone law (Law Nº 2009), issued by presidential decree on March 26, 2006, establishes control mechanisms for ODS and consist of two main sections. The first focuses on ODS control under the Montreal Protocol framework, and the second focuses on prevention, awareness, evaluation and protection of human health and the environment. Regulation of the law, which among others establishes maximum import volumes and their distribution criteria, is currently under way. This Regulation has to be signed by five Ministries before entry into force. Nowadays it is its last legislative process, which means that it is only missing the signature of the Minister of Finance and the President before entering into force. Capacity building and technical assistance characterized 2006. During this year, several governmental employees from the National Customs Service, Comisión Nacional del Medio Ambiente (CONAMA), Ministry of Health among other institutions, underwent training courses to learn about the new information system that gives support to the control of imports/exports of ODS. This training is part of the implementation of the new information system to track imports and exports of ODS, which also considers the implementation of new code for ODS. Training was also offered in the areas of: refrigeration to promote good practices including reconditioning of refrigerators and recycling of gases among others; and fruit tree production for phasing-out the use of methyl bromide. Technical assistance to eliminate the uses of CFC-13 was also provided for companies whose production is base on ozone depleting solvents. B. Institutional Strengthening Unit The National Ozone Unit in the Comisión Nacional del Medio Ambiente continues its work on the implementation of project on solvents, methyl bromide, refrigeration and foam manufacturing with various implementing agencies. Its funding was fully used by the end of the year, and an application for additional funds in the amount of US$186,500 will be submitted at the 51st meeting of the ExCom. for the period 2007-2008. CHINA Country Developments China has phased out more than 188,000 ODP tonnes in the consumption and production sectors through World Bank-implemented projects since the early 1990s. Projects under implementation by the Bank for China fall under the ODS IV Bank Umbrella Project. ODS III: The ODS III Umbrella Project which included a total of 94 MLF-funded investment activities, completed in 2006. The ODS III Implementation Completion Report for the Bank and remaining project completion reports are under preparation. ODS IV: Thirty-five annual programs have been approved by the MLF (including 2007 annual programs): ten annual programs for the halon sector plan, nine annual programs for the CFC production closure plan, five for the foam sector plan (2007 AP has not been approved yet), seven 35 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 for CTC phaseout in the process agent sector (five for phase I, two for phase II), one MAC sector plan, one sector plan for the commercial refrigeration sector, one sector plan for the TCA sector, and one sector plan for the pharmaceutical aerosol sector. Twenty-one of the annual programs are completed (seven halon, seven CFC production, two foam, four CTC/PA I, and one MAC) as of the end of 2006. COLOMBIA Country Developments The Bank's MP program in Colombia is now completed with a total of 116 ODP tonnes phased out through ten investment projects. The Bank's Implementation Completion Report has been done and remaining project completion reports submitted to the Executive Committee with an exception of one that will be submitted in 2007. The project to phase out CTC used as a process agent in the manufacture of chlorine that was approved at the 47th Executive Committee Meeting was transferred to UNDP in July 2006. ECUADOR A. Country Developments The Government of Ecuador is carrying out the third tranche of the National CFC Phase Out Plan. During 2006, the conversion of the industrial foams sector was completed when the Industrias Verton and M Refrigeration subprojects were closed. Regarding strengthening of the customs, a laboratory facility is being built to house the gas chromatographer. With respect to the refrigeration sector, a contract for $627,000 was negotiated for the purchase of R&R equipment. This equipment will be delivered during 2007. In addition, training on best practices for refrigeration workshops is on schedule, and to date 18 courses have been carried out around the country (240 technicians have been trained). Finally, a chillers component is being developed to replace the existing CFC-based chillers in Ecuador. Regarding the solvent subsector, an international team of experts traveled on January 2006 to Ecuador to provide technical assistance to consumers and importers of solvents. The results of this technical assistance show that companies had converted their technologies on their own, so a new investment project is not needed. With regards to the methyl bromide (MB) subsector, a study on MB consumption was concluded the first semester of 2006. This study showed that 255 MT of MB were imported under an inappropriate customs code (and therefore outside of the Quota System developed to control ODS imports). This consumption put the country in non-compliance regarding MB consumption. An Action Plan is being developed and will be submitted to the Ozone Secretariat early 2007. B. Institutional Strengthening Unit 36 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 For the institutional strengthening activities, in 2006, public awareness campaigns continue to be carried out, including the children's 3rd National Paint Contest (children from all 22 provinces participated), seminars in high schools in Quito, as well as the release of brochures and technical sheets on ozone depletion. Finally, companies labeled as "Friends of the Ozone Layered" were highlighted during Ozone Day 2006, where a NASA expert was invited to do a presentation on the status of the Ozone layer. INDIA Country Developments In 2006, three supervision missions were undertaken by the World Bank. In addition, the Bank also undertook a mid-term review of the CFC production gradual phase-out project. The findings of this mid-term review have now been used for developing the annual program for 2007. Basically, the findings of the mid-term review call for more integration between activities in the production and the consumption sector as well as more integration in terms of the management of the CFC and CTC production phase-out projects. The Ozone Cell has already issued the CY2007 production quota in accordance with the Production Quota Order under the Ozone Rule to the four CFC producers. The maximum production quota for 2007 is at the level stipulated in the Agreement for the Project (3,389 MT). In 2007, the Ozone Cell will continue its effort to strengthen the monitoring system of CFC distribution in India through registration of sellers, dealers and buyers of CFCs. In approving export licenses to CFC producers, the Ozone Cell will continue to take into account information received from importing countries on their registered importers. In addition, the Ozone Cell through the NCCOP being implemented by Germany will initiate an independent verification of the actual quantity of CFC exported by each producer. INDONESIA Country Developments Two traditional investment projects are ongoing as of the end of 2006, including one foam group project under the Indonesian Foam Association and the halon banking and management project. For the AFI box foam project, all 54 units of equipment have been distributed to foam recipients, and commissioning and trials of all 54 units has been completed. The disposal of baseline equipment of the 54 foam enterprises has been completed. The Bank was concerned to learn that there were three cases of fire accidents caused in the beneficiary foam factories under this program. To help prevent further accidents, the Government requested that safety training be given to all beneficiaries in the subproject by a competent expert consultant who is knowledgeable in safety issues in the foam industry. Remaining project activities completed in mid-2006. 37 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 For the halon banking project, standard operating procedures (SOP) were completed. SOP include guidelines for operating equipment; storing, transporting and analyzing halon; and quality control procedures for the halon bank. A mapping exercise was done during December 2006. GMF has received around 14.5 MT of halon 1301 since start of the program and has recycled 1.8 MT to date; Garuda requires 500 kg/year of halon. Procurement of a storage cylinder and a digital weighing scale was completed. Ministry regulations on recycled halon (critical use of halon, prohibiting halon release, etc.) are being prepared for submission to the legislative branch in 2007. The Government of Indonesia has made great progress in improving its import licensing and quota system to monitor and control ODS imports. A revised draft to existing regulations was agreed upon by the Ministry of Trade and other relevant government departments, and new regulations adopted on June 22, 2006. The former regulations with provision that only one company could import ODS were declared void. Standard operating procedures were drafted to provide guidance for implementation of new regulations. The technical assistance project for strengthening of import/export control was completed. JORDAN A. Country Developments Necessary ODS control measures have been put into place by the Government of Jordan. 2005 import data was reported to the Multilateral Fund in 2006 as required and shows that the country is in compliance with Montreal Protocol obligations. All investment activities under the Terminal Halon Umbrella Project are completed except for the servicing of existing halon equipment. New halon fire fighting equipment is no longer sold. A remaining activity is a study tour that was under planning in 2006 and is planned to be completed by June 2007. The Halon Management project is also still underway although the halon recycling center is completed and operational. Consistent with ExCom policies, no virgin halon will be imported, with enforcement undertaken through the existing import licensing system. The implementation of the National ODS Phaseout Plan (NOPP) is progressing. Sub-activities cover the foam, MAC, solvents and aerosol sectors. Foam activities are now completed. A contract for MAC recycling equipment was signed and equipment delivery and training are to be accomplished in 2007. Solvent sector training has commenced in 2006. The Arab Center for Pharmaceutical Aerosol Products completed its testing of non-MDI pharmaceutical products in 2006 and is in the process of re-registration of its products with the Ministry of Health. The Bank conducted one technical and supervision mission to Jordan in November 2006. B. Institutional Strengthening Unit 38 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Implementation of Phase VII of the IS project continues. This tranche focuses primarily on meeting Jordan's 85% CFC/halon consumption reduction targets in 2007 through targeted activities, including in the aerosol, commercial refrigeration and servicing sectors, and coordination of activities of Implementing Agencies that are active in the country. Ongoing supervision and public awareness activities are also included. Jordan plans on renewing its IS project in mid-2007. Activities of the Ozone Unit in 2006 included facilitating phaseout of ODS in remaining ODS-using enterprises and continuing work on the establishment of a halon bank. Supervision of converted enterprises was ongoing, International Ozone Day was celebrated, and public awareness materials were prepared and distributed. The Ozone Unit conducted its normal reporting for the MLF and Ozone Secretariats, to the World Bank, and to other Government agencies. Finally, representatives of the Ozone Unit attended relevant Montreal Protocol meetings, including the 18th Meeting of the Parties and the three Executive Committee Meetings in 2006. MALAYSIA Country Developments Implementation of the National CFC Phaseout Plan (NCFCP) is on track and significant progress was achieved in 2006. The only two components of the Plan that remain open are MAC and refrigeration, both of which are underway. It is expected that by the end of 2007: a) implementation of the MAC servicing component will be completed; and b) implementation of the refrigeration servicing component will advance significantly. MEXICO Country Developments The Bank's Montreal Protocol program in Mexico was completed by June 2006. A total of 3 projects (sterilization, industrial aerosols, and chillers) were approved by the ExCom for a total amount equal to $1.67 million. A total of 252.12 ODP tonnes were eliminated from these sectors (approved ODP was 244.32 ODP tonnes). Regarding the sterilization component, the project successfully eliminated the use of ODS in the final 7 institutions using this type of substance in Mexico. Similarly, the project eliminated the use of ODS in the 3 existing ODS-based industrial aerosol firms. Finally, regarding chillers, funds from the second phase were transferred to FIDE and have been added to the revolving fund. To date, the project has replaced 19 chillers, with an original target of 10. PAKISTAN Country Developments 39 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 The Pakistan ODS umbrella project with the World Bank that covered in total 18 MLF approved subprojects has been successfully completed as of the end of 2006. Four subprojects and the entire umbrella project are expected to be financially completed by mid-2007. During the life of the umbrella project, four individual projects were approved and cancelled before implementation had commenced. The total phaseout achieved through the investment projects and one country programme update was over 1200 ODP tonnes through US $8.26 million in grant financing. The Bank had two supervision missions to Pakistan in 2006 and has scheduled two more in 2007 to prepare and finalize remaining MLF project completion reports and the overall Implementation Completion Report. PHILIPPINES A. Country Developments The Government of the Philippines is implementing an institutional strengthening project, the National CFC Phaseout Plan (NCPP) and the Methyl Bromide Phaseout Strategy in cooperation with the Bank. The NCPP is in its fourth year of implementation with significant progress made in 2006 in the servicing sector. As of mid-December 2006, a total of 112 training institutions trained a total of 2,656 service shop technicians nationwide. Based on Project Management Unit (PMU) records, the issuance of vouchers peaked in the 4th quarter of 2006. In addition, the area coordinators/EMB Regional Offices intensified their public awareness campaign activities to meet their targets. A total of 2,209 vouchers were issued nationwide as of the end of December 2006. This accounts to 73% of the total target of 3,030 vouchers for 2006. Hence, the PMU is now left with only 821 vouchers to be issued. The reclamation facility could not be finalized in 2006 due to some procurement issues and because of the need for a new agreement between the operator and the Government. The operator is now making necessary arrangements for the facility and launching is tentatively scheduled for mid-2007. The manufacturing sector is no longer using CFC but some conversions are still underway. On the policy side, all major policies that had been planned to facilitate market transition of the servicing sector are in place as of the end of 2006. The combination of these policies which regulate the servicing sector (both in RAC and MAC) and the consumer ­ with the decreased supply in CFC, make sustainable phaseout possible. In terms of the Methyl Bromide (MB) Phaseout Strategy, 2006 activities included the issuance of a Memo Circular on additional MB guidelines and extension of suspension of non-QPS MB use, completion of an orientation of government agencies on implementing the project; continuous 40 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 monitoring of MB use for QPS and non-QPS applications through the purchase permit system and issuance of warning letters and imposition of fines. In addition, 2006 saw the finalization of a training module for the storage sector; the completion of a needs assessment in the flourmill sector; training on Integrated Pest Management; evaluation of study proposals for phosphine resistance and heat treatment using rice-hull ember, hiring of an independent auditor for a verification audit, hiring a database programmer and installation of database program prototype. The Bank continues its support to the country through regular project supervision, review and clearance of terms of references for activities, monitoring of progress, and procurement and financial management, and policy guidance through ongoing dialogue with the NOU and PMU. The Bank conducted two supervision missions in 2006. B. Institutional Developments The Philippines Ozone Desk (POD) is currently implementing the fifth phase of its institutional strengthening project. In 2006, the most significant achievement was the ratification by the Philippines of the Montreal and Beijing Amendments to the Montreal Protocol on 14 March 2006. Other accomplishments included continuing support by POD to enforce the ODS licensing system and conducting four training sessions for the Bureau of Customs personnel and other regulatory agencies. POD formulated Omnibus Guidelines on illegal trade and possession of ODS. It established a registration system for ODS handlers and conducted eight orientation seminars for ODS handlers. Recurring activities included monitoring and enforcement and oversight of the NCPP Project Management Unit in hiring a consultant to conduct the CFC verification audit. The information, education and communication campaign targeting local government units, schools, and partner agencies was also continued and POD spearheaded ozone month celebration activities. Finally, POD representatives participated in the 26th Meeting of the Open-Ended Working Group, the 18th Meeting of the Parties, UNEP network ODS and customs officers meetings, and the Bank's Tenth Annual Financial Agents Workshop held in Washington DC. THAILAND A. Country Developments Implementation of the NCFCP is well underway and major progress was achieved in 2006. A few projects remain open in the foam sector, and the MAC and refrigeration sector components are 41 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 underway. It is expected that by the end of 2007: a) conversion of the foam sector will be completed; b) implementation of the MAC servicing component will be near completion; and c) implementation of the refrigeration servicing sector component will have advanced considerably. B. Institutional Strengthening Unit The Institutional Strengthening project is progressing as planned, and a request for renewal will be submitted to the ExCom in 2007. The revised halon management project is moving forward. Implementation of the national methyl bromide phaseout plan is ongoing. The Project Management Unit is functional and has taken charge of all coordinating activities under the Plan TUNISIA A. Country Developments The Government of Tunisia has one remaining ongoing investment project with the World Bank, the National ODS Phaseout Plan (NOPP) that was approved in July 2006 for a total of US$ 1,135,395 in principle ­ to phase out 342 ODP tonnes of remaining CFC and halon use. The project will cover the aerosol, foam, servicing and halon sectors. In addition, the NOPP will facilitate the development and implementation of a transition strategy to non-CFC MDIs. In order to permit implementation, the Grant Agreement between the Government of Tunisia and the World Bank must be amended. The expected date of amendment is early 2007. Seven traditional investment projects remained financially open as of the end of December 2006 due to a need to reconcile accounts. Five of these are expected to close in early 2007 and will result in a return to the MLF of some project savings. Two World Bank supervision missions were conducted in 2006, one in February and one in July. In addition, the Bank provided assistance to the Government of Tunisia to permit the attendance of a staff member of the Bureau Ozone to attend the Bank's Tenth Annual Financial Agents Workshop. B. Institutional Developments The fourth phase of the IS project in Tunisia was approved in April 2006 by the MLF Executive Committee. The objectives of the project are to monitor the implementation of investment projects in the various sectors; support the implementation of the National ODS Phaseout Plan and a phaseout plan in the methyl bromide sector; continue the implementation of public awareness among the administration and the public and private sectors; further develop and update ODS legislation and regulations, and strengthen the commitment of the Government by way of decision- makers, industry, importers and commercial dealers and other concerned parties with the view to ensuring sustainable ODS phaseout. 42 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 The Bureau Ozone participated in several meetings and workshops throughout the year including workshops of regional networks of ODS officers and the 18th Meeting of the Parties. TURKEY A. Country Developments By the end of 2006, the cumulative disbursement of MLF funds to Turkey was US $21.9 million under the Bank-supported PODS-I and II projects. Combined with a UNIDO-supported project, there has been a total phase-out of 4,413 ODP tonnes by end-2006. The sixth tranche of the refrigeration sector plan (RSP) was approved by the Executive Committee in November 2006, adding another US $0.5 million to the US $8.5 million already approved for the first five RSP tranches. End-user retrofits, chiller conversions and training will continue to be supported during 2007 as additional applications are submitted by enterprises and approved for funding. Turkey's first end-user retrofit contract, with Coca Cola of Turkey, was initiated in late 2005, and converted a total of 811 of its standard refrigerator units during 2006. Since its inception, the chiller replacement project has signed contracts for the replacement of a total of 24 chillers at 12 enterprises. The project has supported three central reclaim centers in Istanbul, Ankara and Izmir for refrigeration recovery and recycling (RRR). The Istanbul Reclaim Center installation is operational and has processed at least 1.5 MT of R-12 from a chiller conversion in the area. It has also received 100 recovery/recycling machines for distribution in the Istanbul region. Likewise, the Ankara Reclaim Center installation is completed and has processed roughly one third of about 1.2 MT of R-12 which is being reclaimed from the Ankara Hilton Hotel, which is in process of converting its three chillers. The Izmir Reclaim Center installation is now in place and ready for operation. The Turkish Industry Association, KOSGEB, has enlisted participation by the Ministry of Environment & Forests' provincial offices in monitoring operation of the recovery/recycling centers. Training for operators at all sites has been completed. The methyl bromide dried fig project was physically completed in June 2006 and all import of methyl bromide into Turkey, except for MP-authorized quarantine and pre-shipment use, was terminated at end-2006. After an extended search, a suitable executing agency, ASO-Ankara Chamber of Industry, in Ankara, was finally identified and agreement was reached to execute the halon banking project within a facility being established at its laboratory site. B. Institutional Strengthening Unit The Ministry of Agriculture and Rural Affairs (MARA) closely coordinates the IS project with the Ministry of Environment and Forests (MoEF), Turkey's national ozone unit. The goal of the IS project is to efficiently phase out the consumption of methyl bromide (MB) in Turkey in 43 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 compliance with Montreal Protocol provisions by establishing the MB National Strategy Committee and MB Steering Committee and monitoring system; creating a regulatory framework for MB phaseout and use; and increasing farmer and public awareness. MARA, supported in part by funds remaining under the second IS project, prepared an Action Plan for the promotion, training and dissemination of MB alternatives throughout Turkey. The Action Plan extends Turkey's MB phaseout program's reach to additional provinces where protected vegetable, cut flower and dried fruit processing is common and/or gradually becoming more important. Turkey's MB Resource Group, comprised of participants from MARA, MoEF, Aegean University, UNIDO, TTGV and the Bank, was convened twice in 2006 to review ongoing and planned MB activities during the year. Among other things, the MB Resource Group has ensured that critical training programs on MB alternatives were undertaken specifically for staff from MARA's Plant Protection and Farmer Training and Extension sections. The following key activities were completed by the team: i) a training program was conducted for extension staff in 20 provinces on MB alternatives; ii) farmer surveys were conducted and evaluated in 20 provinces; iii) a video film was prepared for the farmers; iv) the on-going demonstration plot established in April 2006 in Tuzla/Adana to demonstrate MB alternatives for strawberry seedling production was harvested and evaluated in the last week of December 2006; and v) the demonstrations (for tomato and pepper) established for the training of extension staff are planned to continue in 2007 in Kazanli/Mersin. The Bank conducted a technical review mission, a supervision mission, and supported three field missions to participate in MB Resource Group meetings and oversee on-going MB activities in Turkey. URUGUAY Country Developments Activities have been completed and a total of 24 ODP tonnes of ODS was phased out. Financial completion occurred in early 2003. VENEZUELA Country Developments The Executive Committee approved, in principle, US $16.05 million in funding for the phased reduction and closure of the entire CFC production in Venezuela at its 44th Meeting in December 44 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 2004, to be payable in five annual tranches (2004-2008). It includes (i) the compensation package to PRODUVEN for profit loss, and (ii) technical assistance to the government (FONDOIN) for activities related to CFC production phaseout, including the design and implementation of policies and regulations, a study of the market effects of the phaseout, public awareness, and information management systems to monitor the plan (US $450,000). The first three of these tranches, totaling US $13.5 million, have been released by the Executive Committee and about US $12.95 disbursed to the country. One World Bank mission was conducted to Venezuela in April 2006. The 2006 production target has been met and will be verified in February 2007. VIETNAM Country Developments The grant agreement of for the Vietnam NOPP, with an original grant about of $1.26 million, became effective on 20 March 2006. To date, disbursement of more than US $265,000 has been made to the project's special account of which, $115,600 was disbursed against the project expenditures. The preliminary data indicated that the total consumption of CFCs and halon in 2006 is 149 ODP tonnes, well below the agreed performance target of 200 ODP tonnes. In 2006, memoranda of agreement between PMU and all other government agencies involved in the implementation of the project have been signed. These included 20 memoranda of agreement with the 20 refrigeration and air-conditioning training centers, Vietnam Register, and Drug Administration Department. Moreover, one hundred letters of intent were signed by refrigeration and air-conditioning service shops and ten equipment vouchers have been given to these shops. In addition, two sub-grant agreements for Insulation Panel and Vietsovpetro have already been signed in 2006. Conversion of CFC-11 consumption in the foam production in Insulation Panel was completed in 2006. The performance target for CFC and halon consumption in 2007 is set at 75 ODP tonnes, which is consistent with the agreement between Vietnam and the Executive Committee of the Multilateral Fund. The disbursement target for 2007 is US $524,000. Based on this target, the accumulated disbursement would reach US $639,000 by the end of the calendar year 2007, or 50% of the total grant amount by the second year of the implementation. MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2006 Annex II PROGRESS AND FINANCIAL REPORTING DATABASE Environment Department The World Bank