39181 ANNUAL PROGRESS REPORT BANK-IMPLEMENTED MONTREAL PROTOCOL OPERATIONS January - December 2005 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 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.......................................................................................................13 II. PROJECT COMPLETIONS SINCE LAST REPORT...................................................................13 A. ODP Phased Out Since Last Report...........................................................................................13 B. Non-Investment Project Completions Since Last Report...........................................................14 III. GLOBAL AND REGIONAL PROJECT HIGHLIGHTS ..............................................................20 A. Global Projects...........................................................................................................................20 B. Regional Projects........................................................................................................................20 IV. PERFORMANCE INDICATORS..................................................................................................21 A. Agency Performance Goals........................................................................................................21 B. Cumulative Completed Investment Projects ..............................................................................25 C. Cumulative Completed Non-Investment Projects......................................................................27 D. Cumulative Ongoing Investment Projects .................................................................................29 E. Cumulative Ongoing Non-Investment Projects..........................................................................31 V. STATUS OF AGREEMENTS & PROJECT PREPARATION (WHERE APPLICABLE), BY COUNTRY .....................................................................................................................................33 A. Agreements to be Signed/Executed/Finalized & When They Will be Ready for Disbursing ...33 B. Project Preparation by Country, Approved Amount, and Amount Disbursed...........................34 VI. ADMINISTRATIVE ISSUES (OPERATIONAL, POLICY, FINANCIAL, AND OTHER ISSUES)..........................................................................................................................................35 A. Meetings Attended .....................................................................................................................35 B. Implementing Agency and Other Cooperation ..........................................................................36 C. Other Issues ................................................................................................................................36 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 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.............................................................................................................. 8 TABLE II-1: PROJECT COMPLETIONS DURING REPORTING PERIOD.............................................................. 15 TABLE IV-1: WORLD BANK PERFORMANCE GOALS.................................................................................... 23 TABLE IV-2: WORLD BANK INDICATORS OF IMPLEMENTATION PROGRESS ................................................ 24 TABLE IV-3: WORLD BANK INDICATORS OF IMPLEMENTATION PROGRESS ­ NON-INVESTMENT................ 24 TABLE IV-4: CUMULATIVE COMPLETED INVESTMENT PROJECTS ............................................................... 26 TABLE IV-5: CUMULATIVE COMPLETED NON-INVESTMENT PROJECTS ...................................................... 28 TABLE IV-6: CUMULATIVE ONGOING INVESTMENT PROJECTS ................................................................... 30 TABLE IV-7: CUMULATIVE ONGOING NON-INVESTMENT PROJECTS........................................................... 32 TABLE V-1: ACTIVE PROJECT PREPARATION .............................................................................................. 34 TABLE VI-1: MP MEETINGS ATTENDED BY WORLD BANK STAFF IN 2005................................................. 35 List of Attachments Annex I: Country Developments Annex II: Progress & Financial Reporting Database MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 I. PROJECT APPROVALS AND DISBURSEMENTS A. Annual Summary Data 1. Implementation of World Bank Multilateral Fund activities has advanced in the calendar year 2005. With a cumulative ODP phaseout of 200,489 metric tonnes (MT), 84 percent of the total ODP to be phased out through World Bank conversion and closure projects has been achieved. Disbursement for the entire World Bank portfolio in the year 2005 is at US$617 million. Thirty-one new project approvals by the MLF have increased the number of active projects in the Bank's portfolio to a total of 895. New approvals included five new multi-year projects, increasing the total number of multi-year projects in the Bank's portfolio to 24. 2. Implementing Agency performance is now measured by a set of nine weighted performance indicators in accordance with Executive Committee Decision 41/93. In 2005, 18 annual programmes associated to existing multi-year agreements were submitted and approved out of 20 planned in the approved table of World Bank 2005 performance targets which is 90 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 39,149 tonnes in ODP consumption and production in 2005. In the context of multi-year projects, the indicator of ODS consumption levels achieved and milestone activities completed per annual programmes 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 2005. The 2005 Progress Report was submitted on time. In its 2005 Business Plan, the Bank committed to submit to the Executive Committee 100 percent of PCRs for the number of projects completed in the 2005 PCR reporting period. In the PCR reporting period (July 2004-June 2005), 54 individual investment and non- investment projects completed and a total of 58 PCRs were submitted, meaning that the Bank achieved this target by over 100 percent. The Bank met the PCR target set with the Senior Monitoring and Evaluation Officer by 140 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. 2005 outcomes in relation to these traditional indicators are also provided in Section IV. 2 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 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 -3,082,021 24,133,065 100% 98,914 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 -6,928,269 43,192,537 99% 289,082 0 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 89 97% 16,729 16,587 99% 11,739 11,739 100% 63,042,202 -6,200,126 53,906,004 95% 2,936,071 480,833 7,823,487 -798,425 1998 57 53 93% 8,796 8,526 97% 5,826 5,826 100% 41,105,054 -2,918,895 36,961,925 97% 1,224,234 627,241 4,780,697 -342,914 1999 72 68 94% 8,008 7,012 88% 11,468 11,468 100% 58,562,577 5,964,763 63,669,838 99% 857,501 442,005 6,198,688 379,217 2000 66 63 95% 2,978 3,230 108% 8,793 8,793 100% 38,225,604 -1,199,588 36,513,018 99% 512,998 207,269 3,718,868 -148,507 2001 28 28 100% 6,067 6,067 100% 7,864 7,868 100% 48,091,203 6,395,439 53,510,960 98% 975,682 609,693 4,434,398 573,783 2002 30 26 87% 6,480 6,440 99% 7,173 7,175 100% 64,668,387 -360,096 50,538,513 79% 13,769,778 9,716,382 5,627,501 -51,694 2003 20 17 85% 3,946 3,817 97% 7,421 7,421 100% 68,609,603 3,446,243 59,611,045 83% 12,444,801 8,860,018 5,474,660 257,499 2004 26 15 58% 4,451 2,981 67% 16,083 16,049 100% 75,554,839 1,625,000 43,219,592 56% 33,960,247 22,952,679 5,829,594 121,875 2005 25 1 4% 19,347 4,556 24% 46,223 24,553 53% 75,491,593 0 21,360,000 28% 54,131,593 20,789,599 5,823,215 0 Sub-Total 687 630 92% 113,103 96,124 85% 123,789 102,092 82% 720,261,784 -15,469,936 583,590,947 83% 121,200,901 64,685,718 57,819,386 -1,150,106 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 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 165 155 94% 51 15 30% 0 0 0% 21,347,731 -6,914,893 13,542,168 94% 890,670 628,868 12,640,594 -1,288,489 GRAND TOTAL 895 828 93% 115,078 98,397 86% 123,789 102,092 82% 765,609,536 -26,336,893 617,181,072 83% 122,091,570 65,314,586 71,004,194 -2,502,201 * Does not include the 6 transferred and 91 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 2005 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 $706,654,691. The amounts allocated for institutional strengthening and country program development are US $5,457,465 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 28 97% 2,383,906 -756,174 1,587,732 98% 40,000 40,000 Demonstration Projects 4 1 25% 8,289,210 -181,550 940,658 12% 7,167,002 482,390 Institutional Strengthening Projects 30 21 70% 5,457,465 -152,949 4,413,846 83% 890,670 628,868 Investment Projects 531 494 93% 706,654,691 -14,685,404 579,933,305 84% 112,035,982 62,971,903 Project Preparation 254 247 97% 29,542,262 -7,601,026 21,543,986 98% 397,250 397,250 Technical Assistance Projects 43 33 77% 12,596,002 -2,579,557 8,455,778 84% 1,560,666 794,176 Training Projects 4 4 100% 686,000 -380,234 305,766 100% 0 0 Total 895 828 93% 765,609,536 -26,336,893 617,181,072 83% 122,091,570 65,314,586 * Excludes Closed and Transferred Projects. 4 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 C. Multi-year Agreements 6. In 2005, the World Bank received approval of three new multi-year agreements by the Executive Committee in Chile, China and Vietnam. These new approvals, along with two new approvals of components to national CFC phaseout plans being implemented by another Lead Implementing Agency, bring the number of multi-year projects under World Bank implementation to twenty-four. 7. One of these three new approved multi-year projects is for Phase II of the Sector Plan for Phaseout of ODS Process Agent Applications and Corresponding CTC production which received, in principle, a separate approval of US $46.5 million. The new agreement between the Executive Committee and the Government of China will be finalized in early 2006 and submitted for approval by the Committee at its 48th Meeting. 8. The Government of Vietnam received the approval of US $1.26 million in principle to phase out the remaining consumption of CFCs and halon at the 45th Executive Committee Meeting. Although the Grant Agreement was still in its last stages at the end of 2005, the country made important progress in ensuring that the impact from the activities undertaken through the NCPP is sustainable. The Government of Vietnam established an import/export licensing system, which was one of the policy recommendations of the NCPP in July 2005. It also established the Project Management Unit (PMU) in October 2005. 9. Finally, the Government of Chile was provided US $2,547,156 to completely phase out the consumption of methyl bromide (in addition to existing funding provided through a UNDP-implemented project) by 2013. However, consultations with the country in the course of 2005 after project approval revealed that the country has decided to withdraw from the project. This matter will be considered in detail by the Executive Committee at its 48th Meeting. 10. In 2005, the Bank became a Co-operating Implementing Agency for National CFC Phaseout Plans in Argentina and Mexico. The original agreements between the Executive Committee and the countries were revised to allocate $500,000 of the earmarked funding in each country to chiller replacement components. This will permit the continuation of the success of the bilateral chiller replacement project with the United Kingdom in Mexico and permit lessons learned and methodologies to be applied in the Argentina context. 11. In terms of ongoing multi-year projects, 13 annual plans were approved in 2005 worth nearly US $51 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 2004 and 2005, where data is already available and verified. 5 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 12. Of special note is the Sector Plan for Halon Phaseout in China which met one of its ultimate objectives at the end of 2005, the complete closure of halon 1211 production in China. The 2005 Annual Plan of this multi-year project included the final production ceiling for halon 1211. In the period from 1998 to 2005 the Government of China gradually reduced the production of halon 1211 to 5970 ODP tonnes from the project's baseline of 34,932 ODP tonnes. In 2006 and onwards, there will be no more production of halon 1211. 13. Out of the initial fourteen halon 1211 production plants, twelve have been closed during the period of 1998-2004 with the complete dismantling of their production lines. The remaining allowed production in 2005 was shared between two plants. The last two halon 1211 production plants closed production on December 31, 2005 and will be dismantling their plants in 2006. Since the start of the program, the Government of China has developed supporting policies and regulations of which the production quota regulation has played the main role. An important aspect of the sector plan has also been the technical assistance (TA) component which covered activities to strengthen implementation capacity for implementing the plan as well as for the preparation of standards to ensure quality and reliability of substitute fire extinguishers and fire extinguishing systems. 14. Addressing halon 1211 production and consumption simultaneously and the combination of investment activities, policy measures, TA and public awareness, has enabled the country to adhere to the phaseout schedules as per its agreement with the Executive Committee. Close cooperation between relevant government agencies, complemented by strong policy enforcement and monitoring of the halon sector plan was crucial. The success of the program has also depended on the cooperation and support from provincial and local Environmental Protection Bureaus and Fire Fighting Bureaus because of the number and geographical distribution of the enterprises involved. The entire China Sector Plan for Halon Phaseout is targeted for completion by 2010. 15. China made important headway with another sector plan, the Sector Plan for Phaseout of ODS in Phase I of Chemical Process Agent Applications and Carbon Tetrachloride Production. Eleven producers were issued quotas for 38,686 ODP tonnes of production which is a reduction by 16,852 ODP tonnes from the previous year. Three of those were issued "zero" quotas meaning that they can only produce after trading with those with quotas. More importantly, however, is that in 2005, contracts were signed with the two producers to completely end CTC production in 2006 on dedicated lines, as well as one distiller ­ for a planned total reduction of 3,912 ODP tonnes in 2006. From the end of 2006 onwards, CTC will only be produced as an unavoidable co-production at chloroform production facilities. 16. The implementation of activities under other multi-year projects also progressed accordingly with some countries moving forward expeditiously whereas others moving at a more measured pace. In all cases, countries are tailoring and refining approaches to meeting program objectives while dealing with country-specific issues that arise during implementation. Some are useful to consider in the context of lessons learned for sharing with other countries. 6 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 17. For example, under the Thailand NCPP, one issue that was feared would interfere with the distribution, effective use and monitoring of newly purchased recovery and recycling equipment under the Voucher Scheme was the high levels of blends and adulterated refrigerants being circulated and used in the servicing sector. The Project Management Unit determined that it would be too difficult to depend on servicing shops to screen refrigerants primarily because they are not equipped to do so. It thus decided to match an identified need in the servicing sector with available services in a servicing subsector, MAC inspection, which was created through the NCPP. 18. Refrigerant identifiers were distributed to vehicle inspection stations throughout Thailand to measure refrigerant purity in MAC systems under the project. The data collected is used to assess what types of refrigerants are found in both commercial and private vehicles in circulation and thus indicate the extent of conversion of the sector. PMU has included in Thailand's NCPP annual work program a plan to use some of these private refrigerant inspection stations as depots where service shops can take their refrigerant cylinders to be tested on commercial terms. If service shops are skeptical about the purity or content of refrigerants they purchase from suppliers, they will be able to have them tested and then able to make choices about where they will purchase refrigerants in the future. This approach is hoped to gradually force suppliers, distributors and perhaps importers to ensure that the gas they are marketing is what they claim it to be. 19. The Government of Indonesia is implementing a National ODS Phaseout Plan in cooperation with several Implementing Agencies and which consists of a series of sector plans. One impediment to the advancement of implementation in the various sectors has been the difficulty of the country to finalize a CFC import/export licensing system. In regards to the foam sector which is partially implemented by the Bank (with UNDP as the Lead Implementing Agency), the subsequent tranche earmarked for 2005 approval could not be approved because of a recommendation that additional funding should not be released until the Fund Secretariat is informed by the Government of Indonesia that the new ODS import control regulations have been adopted and are being implemented. 20. Indonesia has made progress in 2005 to amend its 2002 decrees which delineate only two importers. This was done with the support of the technical assistance activity under the Bank and funded by the MLF to strengthen export and import policy, along with the continued policy support of all IAs active in the country. A memorandum of understanding between the Ministry of Environment and Customs was signed in December 2005 to strengthen the control of ODS arriving in the country. In addition, an advance draft of a regulation on ODS control to amend the 2002 decree will be submitted to Ministry of Industry in February 2006. 21. Last year a point raised in the Annual Progress Report which actually mirrored concerns raised by the Executive Committee was the low disbursement rates for some countries with sector and national ODS phaseout plans. The 2005 progress reporting year has shown an increase in disbursement rates for several of these countries. For example, the servicing sector, or Voucher Scheme component of the Thailand and Malaysia NCPPs are in full implementation with hundreds of shops already having received equipment and tools. Three of five approved tranches of funding of the Malaysia NCPP are at least 70% disbursed. 7 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 22. Under the Philippines NCPP, some delays were experienced, in particular in the launching of the voucher system for distributing subsidies to purchase servicing equipment and tools. These were due to time needed to reevaluate the direction to be taken in terms of the training, to reassess the needs of shops for equipment and the associated value of the voucher and to qualify suppliers. In addition, a change in country personnel added to the time needed in 2005 to launch the pilot phase of the voucher scheme and to start preparation for the full implementation. In regards to the manufacturing sector, most conversions have taken place and CFCs are no longer utilized. 23. As has been mentioned in the past for these sector and national ODS phaseout plans which seem to be experiencing slow implementation when looking only at disbursement rates, often much policy and coordination work has been taken by a country nonetheless. The Philippines NCPP is such a case. It is characterized by strong inter-agency coordination which has been built through the preparation and implementation of the NCPP. The country has instituted various policy measures and has undertaken extensive consultations, public awareness raising and other communication programs which have resulted in the country meeting the ultimate objective of the NCPP and the agreement with the Executive Committee ­ annual CFC consumption reduction targets. 24. In fact, policy development and/or changes are fundamental to national and sector ODS phaseout plans and are one of their distinguishing factors. The Bank continues to provide policy support through targeted and recurrent missions which review in detail the status of subsectors and any new issues, reassess with the country subsector priorities, and lay out action plans for individual objectives. The success of such an approach depends on bringing to the table all relevant government ministries as well as suppliers, end-users and the private sector, depending on the issue and subsector. 25. Related to policy assistance and the World Bank's role, the Bank organized a third NCPP East Asia regional meeting where representatives from Thailand, the Philippines, Indonesia, China and Vietnam convened to share experiences and exchange information. Areas of discussion covered global supply and demand of CFC and halon; regional ODS trade cooperation; import/export verification; methyl bromide; metered dose inhalers (MDIs) strategies; chiller replacement; and HCFCs. The participants then drew up recommendations which included among others, the ongoing updating of MDI strategies and that labeling requirements should be included in training programs for service technicians, given that countries have as issues, recognized refrigerant contamination and/or the availability of various types of refrigerants. 26. The World Bank's annual Financial Agents workshop has been another venue for providing support to clients that are implementing multi-year projects on policy enhancement, development of comprehensive approaches to addressing specific sectors, and information reporting and sharing. The Bank has refocused the agenda of the workshop as the needs of its partner countries have shifted, to draw together not only country financial agents who were traditionally responsible for many aspects of project implementation, but more and more country officers and their staff and consultants to discuss issues pertinent to the implementation of sector and national ODS plans with each other, international experts and Bank staff. Table I-3 presents a summary of multi-year agreements for projects under World Bank implementation. 8 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 Table I-3: Multi-Year Projects ODP ODP Actual ODP Sector Date Planned Date Funds Released Funds Total ODP Consump- Total ODP Production Actual ODP Funds Consump- Plan/National Approved of Completion including Disbursed to Consumption to tion Allowed Production to Allowed for Production Country Committed by tion for ODS Phase-Out (Original (Completion of Present Year by the Country be Phased-out for for the be Phased-out the for Reporting ExCom (US$) Reporting Plan (Title) Approval) the entire plan) ExCom (US$) (US$) the Plan Reporting for the Plan Reporting Year* Year* Year* Year* Antigua CFC phase-out Barbuda management plan Dec-04 Dec-08 97,300 69,400 -- 2 -- -- -- -- CFC production Argentina closure plan Nov-02 Dec-09 8,300,000 4,300,000 1,012,000 -- -- -- 3,020 1,647 1,645 National CFC Argentina phase-out plan Nov-05 Nov-07 500,000 500,000 -- -- -- -- -- -- -- Terminal CFC Phaseout Plan for Bahamas The Bahamas Dec-01 Dec-09 560,000 440,000 240,000 66 25 23 -- -- -- Phase-out of all the remaining uses of methyl bromide in soil application Chile pest control Apr-05 Apr-13 2,547,156 691,703 -- 136 170 168 -- -- -- China Halon Sector Dec-97 Dec-10 62,000,000 61,200,000 48,000,000 24,480 7,170 30,060 7,970 CFC Production China Sector Mar-99 Dec-10 150,000,000 111,000,000 91,500,000 -- -- -- 44,931 18,750 18,720 China Foam Sector Dec-01 Dec-10 53,846,000 47,636,000 25,650,500 14,143 9,000** -- -- -- China TCA Sector Jul-04 Jul-15 2,100,000 1,400,000 75,000 -- -- -- 113 79 78 CTC/PA Sector China Phase I Nov-02 Dec-10 65,000,000 56,000,000 39,400,000 11,160 1,454 1,398 52,162 38,686 33,080 CTC/PA Sector China Phase II Nov-05 Dec-09 46,500,000 25,000,000 -- 6,945 -- -- -- -- -- National CFC Ecuador phase-out plan Dec-03 Dec-08 1,689,800 1,216,645 284,894 246 150 133 -- -- -- CFC production sector gradual India phase-out project Nov-99 Jan-10 82,000,000 64,000,000 57,500,000 -- -- -- 22,588 11,294 11,263 9 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 ODP ODP Actual ODP Sector Date Planned Date Funds Released Funds Total ODP Consump- Total ODP Production Actual ODP Funds Consump- Plan/National Approved of Completion including Disbursed to Consumption to tion Allowed Production to Allowed for Production Country Committed by tion for ODS Phase-Out (Original (Completion of Present Year by the Country be Phased-out for for the be Phased-out the for Reporting ExCom (US$) Reporting Plan (Title) Approval) the entire plan) ExCom (US$) (US$) the Plan Reporting for the Plan Reporting Year* Year* Year* Year* CTC phase-out plan for the consumption and India production sectors Jul-03 Jan-10 38,100,954 18,100,000 10,000,000 11,505 1,726 1,726 11,553 1,726 1,726 Phase-out of residual CFCs in Indonesia the foam sector Apr-04 Dec-07 2,957,564 2,775,000 792,303 352 222 222 -- -- -- Refrigeration sector phase-out plan: MAC servicing Indonesia sector Nov-02 Dec-08 4,317,000 4,191,200 3,265,187 915 585 585 -- -- -- National CFC Malaysia phaseout plan Dec-01 Dec-09 11,517,005 9,678,705 5,615,122 1,911 718 667 -- -- -- National CFC phase-out plan: Mexico Chiller Subsector Apr-05 Apr-07 500,000 500,000 500,000 -- -- -- -- -- -- National CFC Philippines phase out plan Nov-02 Nov-10 10,216,876 9,769,159 1,415,976 2,018 1,509 -- -- -- National CFC Thailand phaseout plan Dec-01 Dec-09 14,728,626 13,243,626 2,888,254 3,108 1,370 1,003 -- -- -- National methyl bromide phase-out Thailand plan Dec-04 Dec-12 2,901,600 546,991 -- 242 183 104 -- -- -- CFC Phase-out Turkey plan for Turkey Dec-01 Dec-09 9,000,000 8,500,000 6,051,124 977 150 132 -- -- -- Phased reduction and closure of the entire CFC Venezuela production Dec-04 Dec-08 16,500,000 13,150,000 11,200,000 -- -- -- 4,400 2,913 2,451 National CFC and halon phase-out Vietnam plan Apr-05 Apr-09 1,260,000 495,537 -- 259 259 241 -- -- -- *Reporting Year in this case is 2005. **With Accelerated Phaseout 10 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 Table I-3: Multi-Year Projects (cont.) Antigua CFC phase-out Preparation of grant agreement to channel funds from the MLF to Antigua and Barbuda is in the final stage. Pending final clearance, the GA package will be submitted to Barbuda management plan Antigua and Barbuda for its consideration. To allow implementation of the TMP to move forward without delays, consideration has been made to include provisions for retroactive reimbursement in the GA. Argentina CFC production Country successfully met its 2005 production reduction targets as verified in the production audit (submitted to the 48th ExCom). Project is tied to a reinvestment project - closure plan meaning FIASA has commited to reinvest funds received from the MPMF into a new plant (sodium chloride). Delays in disbursements caused by changes in Government which prevented initially agreed investment schedule to be adhered to. After more than a year of negotiations, a new schedule was accepted by the GOA and FIASA in Dec 05. Under new schedule, all funds from the 2004 and 2005 tranches will be disbursed by mid-2007. Argentina National CFC phase- CFC reductions to contribute to overall reduction targets as per the revised agreement between the ExCom and Argentina (with UNIDO as the lead IA). Revised agreement out plan includes the World Bank as a co-operating implementing agency for a chiller component. Study of the chiller sector completed in mid-2005. A list of potential chillers for replacement has been prepared. Bahamas Terminal CFC The Bahamas has met its consumption reduction targets for 2004-2005 (which are to be verified). CFC demand declined faster than anticipated and a number of activities Phaseout Plan for The proposed in the 2004-2005 Biennial Action Plan became unnecessary. The plan therefore emphasized more public awareness and training of customs and other relevant Bahamas stakeholders to ensure that ODS consumption reduction achievement thus far would be sustainable. The Bahamas is preparing the next Biennial Action Plan along with the 2005 verification and financial audit for 2004-2005. Chile Phase-out of all the Project will be cancelled (as per request by the Government of Chile) at the 48th ExCom. Funds will be returned to the MLF. 2005 consumption data is not official data. remaining uses of methyl bromide in soil application pest control China Halon Sector Preliminary 2005 actual production and consumption figures show targets were met, however the exact figures will be given only once figures are verified. From initial number of 14 halon plants, 12 halon 1211 production plants closed and dismantled; 2 remaining halon 1211 production facilities will be closed in 2006. Out of 72 halon fire fighting extinguisher manufacturers originally identified, 14 enterprises signed contracts to end manufacturing and 47 enterprises signed contracts to convert manufacturing of fire extinguishers from halon to non-ODS extinguishers. 58 of 61 enterprises completed closure/conversions projects and 3 presently implementing closure/conversions. Remaining 11 enterprises closed down w/out funding. Four additional equipment manufacturers found to be operating w/out valid licenses and shut down in 2001 w/out funding. Out of 22 identified halon fire fighting systems manufacturers, 14 enterprises signed contracts to convert manufacturing; 11 of these completed and other 3 under implementation. Based on review of status of licensed halon fire equipment companies, it was found that remaining eligible 11 fire extinguisher manufacturing enterprises and 8 halon 1211 fire extinguishing system enterprises have either closed down or merged with other companies. A total of 61 TA activities taken up, including activities for st China CFC Production Sector 2005 production targets met and verified. Starting with the 37 identified enterprises in 1999, the production lines of 31 enterprises have completely closed with dismantling of their facilities of CFC-11, 12 and 113 under the Sector Plan - accounting for the closure of 79,430 MT of CFC production capacity. A total of six CFC producers remained in operation in 2005. 47 TA activities were planned of which 28 have been completed. 8 are under implementation and 11 were cancelled. China Foam Sector 2005 targets expected to be met, but two planned contracts were cancelled due to ineligibility of enterprises. For the 2002 AP, two of three ODS conversion projects have completed, the third will be completed by Jun. 06. All associated TA activities completed. Two of three conversion projects under the 2003 AP completed, the third will be completed by Jun. 06. All TA activities completed. Six conversion contracts under the 2004 AP were signed within 2004 and two were cancelled. The four projects are expected to be completed by Dec. 07. Three conversion contracts signed in 2005 and are expected to be completed by Jun 08. Two or three more contracts will be signed under the 2005 AP to meet the phaseout target. China TCA Sector TCA production quota system was issued in Sep 04 and became effective since then. As of Jan 06, the Juhua Mining Company remains the only TCA producer in China with an annual TCA production quota of 780 MT. Production facilities at TCA 1, TCA 2 and TCA 3 have all been dismantled. Actual TCA production in 2005 has been verified by the Bank and is under the limit of 79 ODP tonnes. 11 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 China CTC/PA Sector Phase I CTC production: Of the 17 original CTC producers, 11 CTC producers remain. For PA companies, of the 8 CR companies, 5 have been closed in and 3 will modify their production lines to reduce emissions. Closure contracts have been signed with 10 CP-70 producers (totally 12) and all of them have been closed by the end of Jan 05. The other two CP-70 producers have been shut down by themselves. CTC production and consumption as PA in 2005 has been verified and confirmed to be within targets. CFC- 113 consumption also within limit. 18 TA activities were planned, of which 10 are completed, 5 are under implementation and 3 were cancelled. China CTC/PA Sector Phase Newly approved. Agreement with the Executive Committee to be finalized for approval at the 48th ExCom Meeting. II Ecuador National CFC phase- All subprojects in the NCPP are underway. During '05, 48 refrigeration workshops from all over the country were trained on good practices in refrigeration. Equipment (2R out plan and 3R) for each of these workshops is being procured. Customs training program started in '05. Equipment for customs also being procured. A total of $280,000 in equipment have been committed. Training (chiller sector) and additional equipment for a CFC bank are planned. 2nd phase of the Training and Certification of refrigeration technicians started and expected to be completed in 2006, as well as the subcomponent on chillers, IS and monitoring. 2006 AP will be presented to the 49th ExCom. India CFC production sector 2005 Annual Program satisfactorily implemented. Reduction of CFC production proceeded in accordance with the planned schedule, as agreed between India and ExCom. TA gradual phase-out activities including training and awareness have been implemented by PMU with support from UNEP. project India CTC phase-out plan Two disbursements amounted to $10 million made in 2005. A verification protocol completed in 2005. Additional disbursement of $7.1 million will be made during the first for the consumption quarter of 2006 after the trial verification in accordance with the approved verification protocol is completed. This will leave a balance of less than $940,000 that will be and production sectors disbursed in 2006. In 2005, two workshops with the consumption sector were organized to assist CTC consuming enterprises to prepare their application for funding from the GOI to support their phase-out activities. Coordination meeting held by MOEF to develop a coordinated annual implementation plan for 2005. PMU fully operational. Project Implementation Manual finalized and being used as a basis for reviewing and approving all sub-projects under the Plan. Technical appraisal of more than 20 enterprises completed in 2005. Indonesia Phase-out of residual Verfication done and submitted by lead agency, UNDP but new AP approvals will be delayed until country has adopted new import regulations. By the end of 2005, 16 CFCs in the foam enterprises participated in the program. 16 units of foam dispensing machines procured and payment made thru L/C. Machines arrived in two shipments in Nov and Dec 05. sector Commissiong will be conducted in early Jan to mid Feb 06. Procurement of chemicals for trials completed with delivery expected Mar 06. For non-investment component, 4 awareness workshops held in 2005 by MOE in cooperation with Group Coordinator inviting local government, other relevant ministries/institutions and foam enterprises. Studies on "environmentally benign substitute technology for foam sector" and for "development of economic incentive instruments for foam industries" are being conducted. Draft report expected to be ready Apr 06. Indonesia Refrigeration sector 108 MAC services shops in 7 regions of Sumatera Island (South Sumatera, Jambi, West Sumatera, Batam Island, Riau Kepulauan, Riau and Lampung) participated in the phase-out plan: MAC program. Regarding non-investment activities, 6 workshops were arranged by MOE in cooperation with the Group Coordinator with the objective to inform service shop servicing sector owners and technicians about their rights and responsibilities under the Programme including monitoring and reporting requirements for CFC-12 consumption as well as the operating procedures in the MAC sector phase-out approach: Workshops were held in: (i) Bandung (Aug 05) for service shops covering an area around Jakarta, Bogor and Western Java; (ii) Solo (Jul 05) for service shops covering Central and Eastern Java and Bali; and (iii) Medan ­ workshops were held here for service shops covering the North Sumatera area (Sep 05). Workshops for approximately 180 MAC service shops will be conducted in 2006. Malaysia National CFC 2002 AP: Implementation of MAC Inspection requirement and Train-the-Trainer completed Apr 04 and implementation of foam & CRSS, Solvent, TA for MDIs and phaseout plan Customs Training in progress. For foam sector, group project completed in Jul 04 and 22 projects completed by Dec 05. Four new subprojects started end '05 and expected to be completed Jun 06. Implementation of final solvent project underway with planned completion of Apr 06 which will then close sector. 2003 AP: Implementation of subsidy for MAC basic tools and MAC R&R machines in progress. As of Dec 05, a total of 2,529 workshops have registered as part of the certification program. 2,511 vouchers for MAC basic service tools issued and 424 vouchers issued for R&R machines. Fund transfer from Seasonair savings (1st Tranche) into 3rd Tranche will be requested. 2004 AP: Implementation of subsidy for MAC basic tools/ R&R machines continues. 2005 AP: Implementation of MAC servicing sector has progressed. Implementation of ref. servicing component of NCFCP has begun. Group Coordinator will be confirmed by DOE in Jan 06. 12 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 Mexico National CFC phase- CFC reductions to contribute to overall reduction targets as per the agreement between the ExCom and Mexico (with UNIDO as the lead IA and the WB as the Co-operating out plan: Chiller IA). Funds for the 2005 programme will be disbursed to FIDE in early 2006 by the FI after the expected subgrant agreement signing in Jan. 06. Financial and risk analysis by Subsector FIDE of parties that have shown interest for chiller replacement to start during Q2 2006 (this includes credit checks and status of current equipment). Philippines National CFC phase Project implementation in manufacturing sector continues with all enterprises having ceased CFC use. MDI symposium held in late Dec 05. Also in 2005, training equipment out plan procured and distributed to training centers; 34 vouchers issues; and 21 technicians trained in the pilot implementation of the voucher system. Three suppliers of tools and equipment for voucher system qualified. "Catch-up" plan adopted for the servicing sector which includes utilization of EMB Regional Offices and hiring of consultants to expedite national implementation of voucher system. Policy on MAC Inspection endorsed for approval to department secretaries & procurement process for identifiers ongoing. Training of LTO regional offices on mandatory MAC inspection conducted Nov-Dec 05. Additional 3000 copies of Code of Practice printed. Meetings with PARII representatives undertaken to discuss concerns regarding operation of reclamation facility and procurement process for facility initiated. Thailand National CFC As of Dec 05, investment activities in aerosol completed while some projects in foam and solvent sectors are ongoing and will be completed by end '06. Implementation of phaseout plan textile and garment subproject has progressed as voucher finalized and db of textile and garment factories developed. MDI, procurement of equipment to DSD for MAC component, customs training and development of MAC inspection manual completed. For MAC sector, contracts between FI and 3 GCs signed Mar 05. 68 training workshops conducted under Phase 1 and 2 and approx. 2,547 MAC service shops certified (as of Mar 05). 2,073 vouchers released to certified MAC service shops of which 80% have received equipment from suppliers. For R&R machines, distribution of voucher will be undertaken in '06. In addition, 7 workshops organized under Phase 3 training in Q4 2005 and addtl 8 workshops will be organized in Jan 06 to meet NCPP target. Annual consumption target for 2005 achieved but not verified. Activities implemented under PMU in 2005 comprise project implementation and policy activities. Thailand National methyl 2005 consumption targets met but not yet verified. Consultation workshop held in Feb 05 to present strategy to stakeholders. Grant Agreement between the WB and Thailand bromide phase-out plan amended to incorporate the Department of Agriculture (DOA) as the executing agency. Ministry of Finance countersigned said agreement in Oct 05. MOA signature between DOA and GSB (the FI) will take place in Feb 06. DOA has designated a temporary PMU that will be responsible for carrying out the initial activities under the plan. A selection committee has also been set up to select the permanent staff of the PMU. Turkey CFC Phase-out plan First tranche completed. 2003 AP: Conversion of 13 SMEs completed. 1st and 2nd phase of training completed. 3rd phase of training will be started by MoEdu as explained for Turkey in the annual report. Customs training completed and program will be continued. R&R component continues. Chillers component continues with conversion of 5 companies as of end '05. 2004 AP: Conversion of 3 SMEs completed. Implementation of chillers, R&R and management components of the project continues with conversion of 2 of 4 chiller companies. For activities under 2005 AP, 2 chiller contracts and 1 end-user contract signed in 2005. Chiller, R&R, end-user and management components continue. Venezuela Phased reduction and 2004 audit took place in Feb 05. Production was 19% below the quota for that year (2,913 MT). Revised TORs for 2006 are being prepared by FOINDOIN for TA activities closure of the entire in 2006, which will include a study on the impacts of production closure, regional workshops on CFC alternatives, a public awareness campaign, and employee retraining. CFC production Contracts with firms and individuals to carry out the activities in the annual plans are planned. Vietnam National CFC and Phaseout Plan is for CFC and halon. Government of Vietnam established an import/export licensing system which is one of the policy recommendations of the Plan, in Jul halon phase-out plan 05. Import/export licensing system is in operations since then. Ban on imports of CFC containing equipment will be issued Jan 06. PMU established in Oct. 05. PMU fully staffed since Q3 05. Grant Agreement between Vietnam and WB will be signed Jan 06 allowing approved funds to be used for implementing the Plan and also to retroactively cover the cost of PMU operations in 2005. Verification of 2005 consumption will be completed by May 06. 13 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 D. Sector Phaseout by Country 27. 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. 28. The Jordan National ODS Phaseout Plan (NOPP) approved at the 38th Meeting of the Executive Committee and scheduled for completion in 2009, commenced disbursement in 2005. Activities in the MDI, foam and MAC sectors are underway. Significant progress has been achieved in the implementation of the NOPP and individual projects despite the travel restrictions to the region (for Bank staff) and the country is meeting targets as per plan. The necessary ODS import control system is in place and imports only take place through a special license for each import issued by the Ozone Office. Contracts were signed with all remaining CFC using foam companies to be funded under the NOPP. The conversion of the pharmaceutical aerosol company (non-MDI part) has been funded and the conversion to none ODS substitutes is underway. The two main outstanding tasks are implementation of the MAC recycling program and the phase-out of CTC in the solvent sector. 29. The last leg of the commercial refrigeration sector conversion project in China ­ a group subproject covering the last five manufacturers of CFC-based compressors ­ has experienced some delay in equipment delivery in 2005 for one enterprise. This has postponed project completion until June 2006. However, phaseout has been achieved. 30. Other "one-off" sector projects that continued project implementation in 2005 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); two umbrella projects in Pakistan to completely phase out remaining CFC use in the refrigeration and foam sectors; and, a national methyl bromide phaseout strategy in the Philippines. II. PROJECT COMPLETIONS SINCE LAST REPORT Projects completed during this reporting period (January 1, 2005 to December 31, 2005) are highlighted in Table II-1 below. A. ODP Phased Out Since Last Report 31. The total quantity of ODP phased out in association with the 44 projects completed during the reporting period, including one institutional strengthening project with phaseout, amounts to 21,147 tonnes ODP. Of this phaseout, 19,575 tonnes ODP was achieved in 2005. This figure also excludes phaseout that occurred at enterprises that have completed a component of an ongoing project and have already phased out CFC consumption for that component. Phaseout from ongoing projects in 2005 is 1,772 ODP tonnes. Completed projects in Table II-1 are 61 percent disbursed, leaving a balance of US$33.9 million. 92 percent of this balance is for multi-year projects with completed annual programs. 14 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY ­ DECEMBER 2005 B. Non-Investment Project Completions Since Last Report 32. Country Programs: Tunisia received MLF funding for the completion of a country program update. The CPU was approved by the 48th Executive Committee in November 2005. 33. Technical Assistance: There were no new completions in 2005 for technical assistance projects. 34. Training: The Bank hosted its Ninth Annual Financial Agents Workshop in April 2005 for country counterparts who are responsible for project execution, its financial agents, as well as for government officials, in view of their increasing prominence in project implementation through sector and national ODS phaseout plans. 35. The theme of the workshop was "Effective Partnerships for Meeting Compliance Goals." Respective roles of FAs, NOUs and project management units (PMUs), the Bank, as well as other key players such as government agencies and ministries and other implementing agencies were considered to better understand stakeholder expectations and obligations in implementation aspects of sector and national plan implementation. 15 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Table II-1: Project Completions During Reporting Period Date of Date of Date of % Planned ODP Funds Date First Com- Financial Approved Adjustment Funds Commit- Project Name Region Project Number Phased Disbursed Balance Approved Disburse- pletion Com- Funding (US$) Dis- ment in Cur. Out* (US$) ment (Actual) pletion bursed Year (US$) Conversion from CFC-11, CFC-12, LAC ARG/ARS/38/INV/131 36 Nov-02 Aug-04 Feb-05 160,160 0 143,240 89 16,920 16,920 CFC-113 and MCF into HCFC for technical aerosols at Servex S.R.L. Strategy for gradual phase-out of LAC ARG/PRO/44/INV/141 1,373 Dec-04 Dec-04 Dec-05 3,500,000 0 1,012,000 29 2,488,000 2,488,000 CFC-11 and CFC-12 production: 2004 annual programme Terminal phase-out management LAC BHA/PHA/44/INV/12 23 Dec-04 Dec-05 200,000 0 0 0 200,000 200,000 plan: 2004-2005 biennial programme Extension of institutional LAC CHI/SEV/38/INS/52 15 Nov-02 Dec-03 Dec-05 Dec-05 186,550 0 186,550 100 0 strengthening project Phase out of CFC-11 by conversion LAC COL/FOA/29/INV/39 38 Nov-99 Sep-02 Jan-05 Aug-05 584,727 0 414,170 71 170,557 to HCFC-141b technology in the manufacture of rigid polyurethane foam at 29 Colombian enterprises Umbrella project designed to phase LAC COL/REF/38/INV/57 8 Nov-02 Dec-05 Oct-05 Dec-05 211,636 0 81,565 39 130,071 out of the refrigerant CFC-12 by conversion to HFC-134a and replacement of the blowing agent CFC-11 by HCFC-141b in the manufacture of commercial refrigeration systems in 17 enterprises Conversion to CFC-free technology ASP CPR/FOA/20/INV/179 120 Oct-96 Jan-01 Apr-05 Jan-05 301,000 0 301,000 100 0 in the manufacture of flexibe (slabstock) polyurethane foam at Chengdu Plastics No. 7 Conversion of refrigerator ASP CPR/FOA/26/INV/267 120 Nov-98 Sep-00 Mar-05 Aug-05 743,500 0 743,500 100 0 manufacture from CFC-11 to pentane foam blowing agent in the production of PU insulation panels at Foshan Refrigeration Equipment General Factory 16 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Date of Date of Date of % Planned ODP Funds Date First Com- Financial Approved Adjustment Funds Commit- Project Name Region Project Number Phased Disbursed Balance Approved Disburse- pletion Com- Funding (US$) Dis- ment in Cur. Out* (US$) ment (Actual) pletion bursed Year (US$) Conversion of polyurethane ASP CPR/FOA/29/INV/311 135 Nov-99 Oct-01 May-05 Dec-05 609,616 0 609,616 100 0 slabstock manufacture from CFC- 11 to methylene chloride and vertifoam from CFC-11 to liquid carbon dioxide technology at Shenzhou Foam Plant Conversion of polyurethane ASP CPR/FOA/29/INV/322 137 Nov-99 Dec-02 Mar-05 Jul-05 515,970 0 515,970 100 0 slabstock manufacture from CFC- 11 to liquid carbon dioxide technology in Handan Fuxing Jiahe Foam Plant Sector plan for phase-out of CFC- ASP CPR/FOA/44/INV/424 1,335 Dec-04 Dec-05 10,903,000 0 0 0 10,903,000 5,659,500 11 in the China foam sector: 2005 annual programme Sector plan for halon phase-out in ASP CPR/HAL/44/INV/423 0 Dec-04 Nov-05 1,800,000 0 0 0 1,800,000 900,000 China: 2005 annual programme Phase out the production and ASP CPR/PAG/43/INV/416 6,657 Jul-04 Oct-04 Jul-05 16,000,000 0 16,000,000 100 0 consumption of CTC for process agent and other non-identified uses (phase I): 2004 annual programme Sector plan for CFC production ASP CPR/PRO/42/INV/411 4,700 Apr-04 Nov-05 Apr-05 13,000,000 0 13,000,000 100 0 phase-out: 2004 annual programme Replacement of CFC-11 foaming ASP CPR/REF/34/INV/378 174 Jul-01 May-03 Dec-05 1,400,000 0 1,194,037 85 205,963 205,963 agent with cyclopentane and CFC- 12 refrigerant with HFC-134a in the manufacture of domestic refrigerators at Shangling Electric Appliance (Group) Co. Ltd. Technology change for the phase- LAC ECU/FUM/38/INV/31 37 Nov-02 Dec-03 Jan-05 Feb-05 597,945 0 597,945 100 0 out of methyl bromide in the rose plant nursery sector National CFC phase-out plan: first LAC ECU/PHA/41/INV/32 11 Dec-03 Dec-04 Apr-05 777,326 0 301,297 39 476,029 410,000 tranche Conversion and aerosol filling ASP IDS/ARS/22/INV/61 460 May-97 Jul-01 May-05 Oct-04 1,175,340 0 1,175,340 100 0 center at PT Candi Swadaya Sentosa Technical assistance programme ASP IDS/FOA/23/INV/78 370 Nov-97 Dec-02 Apr-05 Dec-05 3,538,400 0 1,554,876 44 1,983,524 for SMEs for flexible polyurethane foam at Indonesian Foam Association (AFI) 17 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Date of Date of Date of % Planned ODP Funds Date First Com- Financial Approved Adjustment Funds Commit- Project Name Region Project Number Phased Disbursed Balance Approved Disburse- pletion Com- Funding (US$) Dis- ment in Cur. Out* (US$) ment (Actual) pletion bursed Year (US$) Phase out of CFC-11 by conversion ASP IDS/FOA/35/INV/129 28 Dec-01 Dec-03 Dec-05 Dec-05 165,201 0 144,691 88 20,510 to 100% water based technology in the manufacture of polyurethane integral skin shoe soles at PT Udapana Swasti Phase-out of residual CFCs in the ASP IDS/FOA/42/INV/160 130 Apr-04 Dec-04 Dec-05 100,000 1,625,000 744,060 43 980,940 980,940 foam sector (advancement) Phase-out of CFCs in the ASP IDS/REF/44/INV/165 110 Dec-04 Dec-05 1,347,300 0 0 0 1,347,300 400,000 refrigeration sector (MAC) (third tranche) CTC phase-out plan for the ASP IND/PHA/42/INV/373 0 Apr-04 Dec-05 Apr-05 9,180,112 0 1,479,157 16 7,700,955 7,700,955 consumption and production sectors: 2004 work programme CFC production sector gradual ASP IND/PRO/42/INV/372 1,832 Apr-04 Jun-04 Jan-05 6,000,000 0 5,933,054 99 66,946 66,946 phase-out: 2004 annual programme Substitution of CFC-12 for HAPs at ASP JOR/ARS/31/INV/64 13 Jul-00 Dec-02 Feb-05 Feb-05 49,539 0 49,539 100 0 the aerosol plant of Arab Chemical Industries Extension of institutional ASP JOR/SEV/40/INS/79 0 Jul-03 Jun-05 Jun-05 Jun-05 147,333 0 147,333 100 0 strengthening project National CFC phase-out plan: 2004 ASP MAL/PHA/44/INV/154 430 Dec-04 Dec-05 Dec-05 1,688,300 0 466,800 28 1,221,500 1,221,500 annual programme Phaseout of CFC-11 in the ASP PAK/FOA/17/INV/06 205 Jul-95 Aug-99 Feb-05 1,247,330 0 1,246,300 100 1,030 manufacture of flexible PUF molded and integral skin at Master Group: (Master Enterprises Ltd., Durafoam Ltd., Khyber Plastic and Polymer Industries Ltd., Procon En) Conversion to CFC-free technology ASP PAK/FOA/23/INV/22 64 Nov-97 Sep-01 Feb-05 563,339 0 506,935 90 56,404 56,404 in the manufacture of polyurethane foam (flexible slabstock, flexible moulded, rigid foam) at Diamond Group of Industries Conversion from CFC-11 to water- ASP PAK/FOA/29/INV/34 40 Nov-99 Sep-04 Jun-05 Sep-05 279,280 0 273,667 98 5,613 based technology in the manufacture of rigid polyurethane shoe soles at Jaguar Industries 18 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Date of Date of Date of % Planned ODP Funds Date First Com- Financial Approved Adjustment Funds Commit- Project Name Region Project Number Phased Disbursed Balance Approved Disburse- pletion Com- Funding (US$) Dis- ment in Cur. Out* (US$) ment (Actual) pletion bursed Year (US$) Conversion from CFC-11 to HCFC- ASP PAK/REF/32/INV/39 20 Dec-00 Dec-04 Aug-05 176,681 0 174,382 99 2,299 2,299 141b and from CFC-12 to HFC- 134a technology in the manufacture of commercial refrigeration equipment at Pakistan Airconditioning Engineering Co. P. Ltd., (PAECO) Conversion from CFC-11 to HCFC- ASP PAK/REF/32/INV/40 14 Dec-00 Dec-04 Nov-05 204,736 0 97,690 48 107,046 107,046 141b and from CFC-12 to HFC- 134a technology in the manufacture of commercial refrigeration equipment at Mumtaz Engineers National CFC phase-out plan: 2005 ASP PHI/PHA/44/INV/75 301 Dec-04 Dec-05 Dec-05 2,160,071 0 76,436 4 2,083,635 416,727 annual programme Extension of institutional ASP PHI/SEV/42/INS/73 0 Apr-04 Dec-04 Apr-05 May-05 90,566 0 90,566 100 0 strengthening project National CFC phase-out plan: 2004 ASP THA/PHA/42/INV/141 486 Apr-04 Dec-05 Apr-05 1,315,400 0 69,747 5 1,245,653 500,000 annual programme Extension of institutional ASP THA/SEV/40/INS/139 0 Jul-03 Dec-03 Aug-05 Aug-05 346,667 0 346,667 100 0 strengthening project Phasing out of CFC-11 in the AFR TUN/FOA/32/INV/36 9 Dec-00 Dec-01 Jan-05 68,917 0 64,525 94 4,392 manufacture of rigid polyurethane foam at Coldeq by conversion to a combination of water and HCFC- 141b based systems Phasing out of CFC-11 in the AFR TUN/FOA/32/INV/37 12 Dec-00 Dec-01 Jan-05 91,477 0 86,329 94 5,148 manufacture of rigid polyurethane foam at Bafes by conversion to a combination of water and HCFC- 141b based systems Phasing out of CFC-11 in the AFR TUN/FOA/32/INV/38 8 Dec-00 Dec-01 Jan-05 64,700 0 58,730 91 5,970 manufacture of rigid polyurethane foam at Societe de Construction Industrialisee (SCI) by conversion to a combination of water and HCFC-141b based systems 19 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Date of Date of Date of % Planned ODP Funds Date First Com- Financial Approved Adjustment Funds Commit- Project Name Region Project Number Phased Disbursed Balance Approved Disburse- pletion Com- Funding (US$) Dis- ment in Cur. Out* (US$) ment (Actual) pletion bursed Year (US$) Phasing out of CFC-11 in the AFR TUN/FOA/32/INV/39 20 Dec-00 Dec-01 Jan-05 156,235 0 140,612 90 15,624 manufacture of rigid polyurethane foam at Societe Nouvelle de Coupe Industrielle (SNCI) by conversion to a combination of water and HCFC-141b based systems Phasing out of CFC-11 in the AFR TUN/FOA/32/INV/40 8 Dec-00 Dec-01 Jan-05 59,079 0 58,083 98 996 manufacture of rigid polyurethane foam at Soften by conversion to a combination of water and HCFC- 141b based systems Total phase-out of CFCs plan: 2005 EUR TUR/PHA/44/INV/85 166 Dec-04 Jan-05 Dec-05 750,000 0 105,277 14 644,723 300,000 annual programme Umbrella project for the phase-out EUR TUR/SOL/35/INV/76 15 Dec-01 Nov-03 Feb-05 Dec-05 518,693 0 473,214 91 45,479 of MCF used as solvent by water cleaning at 21 enterprises Phased reduction and closure of the LAC VEN/PRO/44/INV/101 1,487 Dec-04 Dec-05 Dec-05 3,300,000 0 3,295,000 100 5,000 5,000 entire CFC production: 2004 annual programme TOTAL 21,147 86,276,126 1,625,000 53,959,900 61 33,941,226 21,638,200 * Does not include phaseout achieved in 2005 by projects that were considered ongoing in 2005. 20 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 III. GLOBAL AND REGIONAL PROJECT HIGHLIGHTS A. Global Projects 36. The World Bank has one new global project which was approved by the Executive Committee at its 47th Meeting. The Global Chiller Replacement Project received US $6.9 million in project funding out of a $15.2 million window for chiller replacement. The 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. The minimum level of external resources for replacement of chillers in the seven countries in addition to the MLF funding is set by the Executive Committee at US $13.8 million to replace at least 150 chillers. 37. Project design was based on experiences gained through the implementation of three chiller replacement demonstration projects in Mexico, Thailand and Turkey as well as a comprehensive study in India and a global workshop funded by the MLF in 2005. In each of the three countries, different factors influenced the willingness of chiller owners to replace chillers despite the demonstrated guarantee of lower energy costs. The study found that alone, chiller owners are reticent to change their chillers before normal attrition. The energy savings is not sufficient in itself to persuade owners to replace chillers before the end of their product life. The new global chiller project is structured to address this barrier by providing an additional financial incentive. 38. The new project envisions the inclusion of other Article 5 countries on demand, and subject to funding availability, which will be allocated on a first-come, first-serve basis. By accelerating the replacement of energy-inefficient CFC-based centrifugal chillers, one outcome of the project will be to phase out the annual consumption of 2,000 tonnes of CFC in the chiller sub-sector. 39. However, chiller replacement will not only reduce CFC consumption but will also result in significant reductions of carbon emissions due to the higher energy efficiency of new chillers. The global project, as originally planned, is expected to reduce carbon emissions by 5.3 million tCO2 a year, and reduce power demand by 416 MW. Thus, in accordance with Executive Committee Decision 47/26, efforts to mobilize additional resources from the GEF and through Carbon Finance credits are planned for 2006. Mechanisms dealing with climate change will be broached, as well as the private sector, in order to supplement and leverage additional funds. 40. Country-specific implementation arrangements in priority countries (China, India, Malaysia, Philippines, Indonesia, Jordan & Tunisia) will commence in 2006. The Bank's assessment of the cost of replacing all chillers in Article 5 countries is estimated to be $683 million which will include a series of investment, non-investment, technical assistance, and capacity building activities. B. Regional Projects 41. The World Bank has no outstanding regional projects. 21 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 IV. PERFORMANCE INDICATORS A. Agency Performance Goals 42. 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. 43. "Approval" indicators measure projects that received Executive Committee approval against those planned to be delivered as per multi-year agreements and the 2005 Business Plan. For the first approval indicator, 20 annual programs associated with existing (16) and new (4) multi-year agreements were targeted for approval in 2005 per the World Bank's business plan and in accordance with Executive Committee Decision 45/9(b)). The actual number of annual programs submitted was 18 (from 13 existing agreements and 5 new agreements) because two submissions for Indonesia (foam and MAC sector plans) were deferred until 2006 after decision by the MLF Secretariat not to forward the various annual plans of the IAs assisting Indonesia to the 47th Executive Committee Meeting due to verification issues still needing to be resolved. 44. 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 15 in the Business Plan and reduced to 11 per Dec. 45/9(b). In 2005, 7 new individual activities were approved, meaning the World Bank accomplished this target by 64%. 45. 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 2005, Bank partner countries executing the 19 existing multi-year agreements (prior to 2005) that were targeted in the business plan met their targeted ODS phaseout and policy milestones. (This includes 3 multi-year agreements where an annual program was not due for submission in 2005.) 46. 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 4,660 ODP tonnes of phaseout in 2005 by individual projects based only on what projects were expected to complete in 2005. This target was changed through Dec. 45/9(b) to 6,744 ODP tonnes. Based on the annual ODP reductions reported for previous years in comparison to this year's ODS phaseout performance, a total of 2,376 ODP tonnes were phased out by individual World Bank projects. 22 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 47. The Bank again did not achieve its target because the target was set at a level that was not possible to meet, most likely because it was set based on planned completions in 2005 and corresponding planned phaseout ­ regardless if a previously ongoing project had already achieved phaseout the year before. Of the projects that did not complete on time, most have achieved additional ODS phaseout. As mentioned in the previous annual report, the limitation of having only one indicator that targets ODP phaseout only from individual projects in the new performance indicator approach, is that the overall ODP phaseout performance of the MLF from all MLF projects is no longer highlighted. The bulk of the phaseout for projects under Bank implementation comes from multi-year projects. In 2005, total consumption and production phaseout was over 39,000 ODP tonnes. 48. For the third implementation indicator, "project completion," the World Bank expected 55 investment and non-investment projects to be completed in 2005. This excludes project preparation and core unit approvals. A total of 44 projects reached actual completion in 2005 - 80% of the target. The reasons for delay in completion vary, including the need to obtain equipment disposal certificates and delays in equipment delivery. 49. 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. 50. There are three "administrative" indicators. The Bank met all of the three administrative targets. For Speed of Financial Completion, the Bank had shown that the average number of months from project completion to financial completion was within 11 months from the required date in its 2005 Business Plan. The Bank's 2005 Progress Report data indicates that the average duration of project completion to financial completions in 2005 is 9 months. 51. The Bank committed to submit to the Executive Committee 100 percent of PCRs for the number of projects completed in the 2005 PCR reporting period in its 2005 Business Plan. In the 2005 PCR reporting, 54 individual investment and non-investment projects completed and a total of 58 PCRs in the same period were submitted, meaning that the Bank achieved the target by over 100 percent. If applying the target set with the Senior Monitoring and Evaluation Officer of submitting 41 PCRs in 2005, then the Bank met the target by 140%. Finally, the 2005 Progress Report was submitted on time for achievement of the third administrative indicator. 52. Table IV-1 summarizes the World Bank's performance relative to indicators per Decision 45/9(b) on the Bank's 2005 Business Plan. 23 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Table IV-1: World Bank Performance Goals Category of Item Weighting 2005 Target 2005 Actual Performance Indicator Approval Number of annual programmes of existing multi-year agreements 20 20 18 approved vs. those planned Approval Number of individual projects/activities approved vs. 20 11 7 those planned Implementation Milestone activities completed (e.g., policy measures, regulatory assistance)/ODS levels achieved 20 19 19 for approved multi-year annual tranches vs. those planned Implementation ODS phased-out for individual projects vs. those planned per 5 8,076 MT 2,376 MT ODP progress reports ODP Implementation Project completion (pursuant to Dec. 28/2 for investment projects) and as defined for non-investment 5 55 44 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 9 months completion dates Administrative Timely submission of project completion reports vs. those 5 100% 100% agreed Administrative Timely submission of progress reports and responses unless 5 100% 100% otherwise agreed 53. According to Decision 41/93, traditional indicators of performance are to be maintained for trend analysis. The 2005 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. 24 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 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 Overall Delivery Signing Mos. 48 35 30 21 15 13 15 13 11 10 8 11 14 0 9 18 Speed First Mos. 47 43 35 27 22 22 27 21 21 24 17 18 18 11 6 25 Disb. Last Disb. Mos. 52 59 55 58 52 53 48 35 50 42 27 37 0 0 0 51 ODP Percent- Amount 77 100 117 103 100 92 100 100 100 102 100 101 99 93 44 84 Phaseout age Speed Mos. 62 56 44 50 43 42 43 35 40 42 21 23 16 18 17 40 Cost US$ per Average 8.61 0.92 11.54 3.03 9.69 7.25 1.91 2.28 2.68 3.03 3.47 3.69 5.47 3.19 0.68 2.46 Effective Kg ODP 54. Based on data from the 2005 Progress Report, the actual net emissions was calculated as 17,651 ODP tonnes. Actual cost of project preparation in 2005 was US$263,250 (excluding support costs), or, 0.40 percent of investment project approvals in 2005. Overall speed of ODS phaseout was, in 2005, 40 months. Actual overall speed of first disbursement is 25 months. 55. Nineteen investment projects worth a total of US $68 million (excluding support costs) were submitted and approved in 2005. These projects will result in the phaseout of 65,722 ODP tonnes (including the phaseout of multi-year projects associated with the tranches approved in 2005). The average cost-effectiveness of the projects approved in 2005 is US $1.04/kg ODP. 56. The Bank completed 4 non-investment projects in the reporting period. The overall speed of first disbursement is 14 months at the end of 2005. Overall speed of completion is 32 months by the end of the reporting period. Total funds disbursed for non-investment activities (excluding demonstration projects) in 2005 are US$1,221,964. 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 Overall Speed of 1st Disb. Mos. 21 14 19 5 7 35 22 25 29 12 12 10 7 14 Delivery To Completion Mos. 33 24 28 n/a 14 97 91 26 45 37 12 29 13 32 25 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 B. Cumulative Completed Investment Projects 57. Since 1991, the World Bank's cumulative total of completed investment projects has grown to 494, resulting in the reduction in consumption of 88,729 tonnes ODP and in production of 77,539 tonnes ODP. Out of a total of US $602,281,927 of approved Multilateral Fund financing for completed projects, 91 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 $3.62/kg. These averages include projects both before and after initiation of the umbrella grant agreement approval process. 58. The number of investment projects completed in 2005 was 40. Table IV-4 below provides a summary of completed investment projects at both a regional and sectoral level. 26 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Table IV-4: Cumulative Completed Investment Projects Avg. No. of Overall Cost- Approved Avg. No. of Consump- Production Months from Effective- No. of Funds + % of Funds Months from Item tion ODP ODP Approval to ness to the Projects Adjustment Disbursed Approval to Phased Out Phased Out 1st Dis- Fund (US$) Completion bursement (US$/kg.) GRAND TOTAL 494 602,281,927 91% 88,729 77,539 25 40 $3.62 Region Africa 16 4,715,834 94% 435 0 24 49 $10.84 Asia & Pacific 360 519,003,306 90% 81,704 74,679 25 40 $3.32 Europe 32 24,481,878 93% 3,318 0 12 18 $7.38 Latin America and Caribbean 86 54,080,909 92% 3,272 2,860 31 47 $8.82 Global n/a 0 0% 0 0 n/a n/a n/a Sector Aerosol 28 12,751,633 99% 19,552 0 29 45 $0.65 Foam 201 115,276,766 81% 22,026 0 25 42 $5.23 Fumigants 2 964,385 100% 87 0 12 35 $11.06 Halon 13 55,278,850 95% 30,129 29,988 18 26 $0.92 Multiple Sectors 4 2,800,000 93% 419 0 28 78 $6.69 Other 2 5,059,360 100% 404 0 28 41 $12.52 Phaseout Plan 20 53,096,274 50% 3,142 0 18 13 $16.90 Process Agent 5 40,330,316 100% 624 9,295 11 19 $4.07 Production 16 144,407,120 98% 0 38,256 10 10 $3.77 Refrigeration 174 162,216,008 98% 11,762 0 27 45 $13.79 Solvents 28 9,706,119 100% 562 0 29 27 $17.27 Sterilant 1 395,095 100% 21 0 3 18 $19.10 Implementation Characteristics Agency Implementation 0 0 0% 0 0 n/a n/a n/a National Implementation 494 602,281,927 91% 88,729 77,539 25 40 $3.62 Time or Objective-Sensitive Accounts Time-Sensitive 0 0 0% 0 0 n/a n/a n/a Objective-Sensitive 494 602,281,927 91% 88,729 77,539 25 40 $3.62 Disbursement Method During Implementation 456 584,012,126 90% 86,841 77,539 25 42 $3.55 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. 27 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 C. Cumulative Completed Non-Investment Projects 59. Since 1991, the World Bank's cumulative total of completed non-investment projects has grown to 87. Out of a total of US $13,440,491 of approved Multilateral Fund financing, 99 percent of funds have been disbursed. (This is due to early line of grant projects in Tunisia and Jordan with approved funding which was redistributed among investment and non-investment projects under the grant. Overall disbursement for these line of grant projects is within the approved amount.) 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 19, the average number of months from approval to completion has been 33. 28 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 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 87 13,440,491 99% 19 33 Region Africa 12 1,800,821 100% 13 31 Asia & Pacific 33 7,865,693 99% 19 39 Europe 6 767,512 100% 20 34 Latin America and Caribbean 25 2,799,569 100% 23 34 Global 11 206,896 100% 2 14 Sector Aerosol 2 372,662 100% 17 45 Foam 2 1,671,013 100% 34 51 Fumigants 1 80,000 100% 33 45 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 4,921,906 98% 42 58 Several 67 6,341,118 100% 12 26 Solvents 0 0 0% n/a n/a Sterilant 0 0 0% n/a n/a Implementation Characteristics Agency Implementation 40 1,954,628 100% 4 15 National Implementation 47 11,485,863 99% 29 48 Time or Objective-sensitive Accounts Time-Sensitive 40 2,280,744 100% 4 15 Objective-Sensitive 47 11,159,747 99% 29 48 Disbursement Method During Implementation 86 12,532,336 99% 19 32 After Implementation 1 908,155 100% 25 64 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. 29 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 D. Cumulative Ongoing Investment Projects 60. Since 1991, the World Bank's cumulative total of ongoing investment projects has decreased from 58 in the previous year to 37. Out of a total of US $88,345,702 of approved Multilateral Fund financing, 38 percent of funds have been disbursed. The average number of months from approval to first disbursement has been 28, the average number of months from approval to the current expected completion dates is 41, with an average cost-effectiveness of US $1.27/kg. 30 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Table IV-6: Cumulative Ongoing Investment Projects Avg. No. of Approved % Funds Avg. No. of Avg. Length of Overall Cost- Est. Disburse- Months from No. of Funds + % of Funds No. of Projects % of Projects Expected to be Months from Delay in Project Effectiveness to Item ment + Funds Approval to Projects Adjustment Disbursed Disbursing Disbursing Disbursed by Approval to 1st Planned the Fund Disbursed Planned (US$) End of 2006 Disbursement Completion (US$/kg.)* Completion GRAND TOTAL 37 88,345,702 38% 20 54% 58,959,085 67% 28 41 46 $1.27 Region Africa 0 0 0% 0 0% 0 0% 0 n/a n/a n/a Asia & Pacific 24 75,174,350 32% 15 63% 47,450,687 63% 30 45 44 $1.11 Europe 2 1,229,040 39% 1 50% 829,040 67% 11 45 50 $6.83 Latin America and Caribbean 11 11,942,312 72% 4 36% 10,679,358 89% 23 33 48 $7.63 Global 0 0 0% 0 0% 0 0% 0 n/a n/a n/a Sector Aerosol 2 624,250 19% 2 100% 343,940 55% 17 39 n/a $4.90 Foam 5 10,358,513 57% 4 80% 6,926,798 67% 50 67 55 $5.16 Fumigants 3 1,717,734 28% 1 33% 679,040 40% 11 38 50 $19.09 Halon 3 12,531,000 5% 2 67% 1,177,131 9% 29 58 42 $0.72 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 10 8,405,198 1% 1 10% 3,519,485 42% 36 24 7 $0.47 Process Agent 3 17,114,480 8% 1 33% 10,000,000 58% 5 33 n/a $0.83 Production 5 28,650,000 72% 4 80% 28,390,000 99% 9 19 4 $2.93 Refrigeration 5 8,655,827 49% 4 80% 7,633,991 88% 37 70 71 $6.96 Solvents 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Sterilant 1 288,700 42% 1 100% 288,700 100% 29 41 17 $19.91 Implementation Characteristics Agency Implementation 0 0 0% 0 0% 0 0% n/a n/a n/a n/a National Implementation 37 88,345,702 38% 20 54% 58,959,085 67% 28 41 46 $1.27 Time or Objective-sensitive Accounts Time-Sensitive 0 0 0% 0 0% 0 0% n/a n/a n/a n/a Objective-Sensitive 37 88,345,702 38% 20 54% 58,959,085 67% 28 41 46 $1.27 Disbursement Method During Implementation 37 88,345,702 38% 20 54% 58,959,085 67% 28 41 46 $1.27 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. 31 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 E. Cumulative Ongoing Non-Investment Projects 61. Since 1991, the World Bank's cumulative total of ongoing non-investment projects is 23. Out of a total of US $11,901,628 of approved Multilateral Fund financing, 20 percent of funds have been disbursed. The average number of months from approval to first disbursement has been 20, the average number of months from the date of approval to the current expected completion date is 53. 32 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Table IV-7: Cumulative Ongoing Non-Investment Projects % Funds Avg. No. of Avg. Length of Expected to Avg. No. of Approved Funds No. of % of Estimated Months from Delay in No. of % of Funds be Months from Item + Adjustment Projects Projects Disbursements + Approval to Project Projects Disbursed Disbursed Approval to 1st (US$) Disbursing Disbursing Funds Disbursed Planned Planned by End of Disbursement Completion Completion 2006 GRAND TOTAL 23 11,901,628 20% 17 74% 4,287,637 36% 20 53 20 Region Africa 2 322,667 86% 2 100% 322,667 100% 8 32 16 Asia & Pacific 8 2,113,755 48% 7 88% 1,518,796 72% 16 54 19 Europe 3 899,250 19% 2 67% 564,832 63% 18 52 23 Latin America and Caribbean 8 1,681,344 52% 6 75% 1,681,343 100% 31 57 27 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 4 1,297,374 48% 4 100% 1,088,374 84% 35 82 36 Halon 6 1,879,070 43% 3 50% 1,420,494 76% 34 77 37 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 12 1,840,572 49% 10 83% 1,578,770 86% 10 28 9 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 2 80,000 50% 1 50% 80,000 100% 8 20 10 National Implementation 21 11,821,628 19% 16 76% 4,207,637 36% 21 56 21 Time or Objective-sensitive Accounts Time-Sensitive 10 1,650,572 46% 8 80% 1,388,770 84% 10 25 6 Objective-Sensitive 13 10,251,056 15% 9 69% 2,898,868 28% 30 74 32 Disbursement Method During Implementation 22 11,808,353 20% 17 77% 4,194,362 36% 20 55 21 After Implementation 1 93,275 0% 0 0% 93,275 100% n/a 13 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. 33 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 V. STATUS OF AGREEMENTS & PROJECT PREPARATION (WHERE APPLICABLE), BY COUNTRY A. Agreements to be Signed/Executed/Finalized & When They Will be Ready for Disbursing 62. Projects with new partner countries or with new operational modalities have required legal agreements between the country and the World Bank. This recently applied to Antigua and Barbuda, Vietnam and Venezuela. 63. 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 is in its last stages. Pending final clearance, the grant agreement package will be submitted to the country for negotiation and signing. 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. 64. Vietnam received approval of MLF funding for a National CFC Phaseout Plan in April 2005. The new grant agreement between Vietnam and the Bank has been prepared and is expected to be signed on January 23, 2006. Similarly to Antigua and Barbuda, the agreement will permit PMU operations undertaken in 2005 to be retroactively funded. 65. The production sector closure project in Venezuela was approved in December 2004 and received additional funding in July 2005. The Grant Agreement was signed and became effective in May 2005 which permitted disbursement of nearly 100% of the total US$11.4 million approved by the end of 2005. 66. Finally, the existing Grant Agreement between the World Bank and the Government of Thailand had to be amended to incorporate the Department of Agriculture (DOA) as the executing agency upon the approval of the National Methyl Bromide Phaseout Plan in December 2004. The agreement was amended, signed by the Bank in September 2005 and countersigned by the Ministry of Finance in October 2005. The signature of a memorandum of agreement between DOA and the Financial Intermediary will take place in 2006 to allow disbursements to proceed for capital cost items. 34 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 B. Project Preparation by Country, Approved Amount, and Amount Disbursed 67. A list of active World Bank project preparation activities is presented in the table below. Total funds approved for these projects are US $465,500, of which US $68,250 has been disbursed. Planned commitments for the seven project preparation activities that are moving forward are US $397,250. Table V-1: Active Project Preparation % of Planned First Approved Adjust- Funds Funds Balance Commit- Region Project Number Project Name Disburse- Funding ment Disbursed Dis- (US$) ment in Cur. ment Date (US$) (US$) (US$) bursed Year LAC ARG/ARS/45/PRP/142 Preparation of MDI phase-out plan 50,000 0 0 0 50,000 50,000 ASP CPR/ARS/43/PRP/415 Project preparation for 135,500 0 0 0 135,500 135,500 pharmaceutical aerosol ASP CPR/PAG/42/PRP/408 Project preparation for the second Dec-05 125,000 0 56,250 45 68,750 68,750 phase of process agents phase-out LAC ECU/FUM/45/PRP/34 Preparation of a methyl bromide l 25,000 0 0 0 25,000 25,000 project LAC ECU/SOL/45/PRP/35 Preparation of a TCA phase-out 20,000 0 0 0 20,000 20,000 project ASP IDS/PHA/46/PRP/170 Project preparation funds for the 45,000 0 0 0 45,000 45,000 development of a phase-out plan for ASP VIE/FUM/44/PRP/44 Project preparation for methyl h MDI Dec-05 65,000 0 12,000 18 53,000 53,000 bromide phase-out plan Total 465,500 0 68,250 15 397,250 397,250 35 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 VI. ADMINISTRATIVE ISSUES (OPERATIONAL, POLICY, FINANCIAL, AND OTHER ISSUES) A. Meetings Attended 68. Table VI.1 indicates the meetings attended by World Bank Staff on all Montreal Protocol related work in 2005. Table VI-1: MP Meetings Attended by World Bank Staff in 2005 Dates City Meetings Attended January 24 Montreal, Canada Interagency coordination meeting February 1-3 Montreal, Canada Interagency coordination meeting March 7-9 Frankfurt, Germany Halons Technical Options Committee Meeting March 31-April 1 Washington, DC, USA 9th Annual Financial Agents Workshop April 4-8 Montreal, Canada 45th ExCom Meeting April 18-20 Bridgetown, Barbados Main Meeting of Ozone Officers from the English Speaking Caribbean Countries June 27-30 Montreal, Canada 25th Meeting of the Open-ended Working Group July 1 Montreal, Canada 2nd Extraordinary Meeting of the Parties July 2 Montreal, Canada 34th Meeting of the Implementation Committee July 4-8 Montreal, Canada 46th ExCom Meeting September 6-8 Pattaya, Thailand EAP/ENV Regional Workshop on Montreal Protocol Implementation September 27 Washington, DC, USA Meeting on global CFC chiller replacement October 3-5 Kathmandu, Nepal South Asia Network Meeting of Ozone Officers October 13-14 Hua Hin, Thailand Small Group Meeting on MB Phaseout in the margins of the SEAP Network Meeting October 14 Montreal, Canada Interagency coordination meeting November 21-25 Montreal, Canada 47th ExCom Meeting December 7-9 Dakar, Senegal 35th Meeting of the Implementation Committee December 12-16 Dakar, Senegal 17th Meeting of the Parties to the Montreal Protocol & 7th Conference of the Parties to the Vienna Convention 36 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 B. Implementing Agency and Other Cooperation 69. 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. 70. 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. Accordingly, the Bank worked with UNIDO to determine implementation and monitoring and reporting arrangements within the NCPP frameworks and future cooperation is implicit. 71. The Bank continues to work with 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 have worked with the Bank and India on the technical assistance component of the halon phaseout sector plan and the CFC production closure project respectively. 72. Finally, close cooperation with UNDP continues in Indonesia, in particular due to consumption verification in various sectors and its relationship to import/export issue. Cooperation has been formalized through a Memorandum of Understanding between UNDP and the World Bank which is underlined by a cost-sharing arrangement has been made for project staff at the country level. C. Other Issues 73. The focus of World Bank Montreal Protocol activities in 2005 were in the development and implementation of sector and national ODS phaseout plans, in initiating a new global activity in the chiller subsector and closing older umbrella projects of traditional investment projects. Only 13 traditional investment activities and 12 technical assistance or demonstration projects remain open at the end of 2005. A major umbrella project in India, ODS II, was closed in 2005, comprising of 76 individual projects that were approved over US$34 million by the Executive Committee. Other countries are also wrapping up umbrella projects such as China (ODS III umbrella), Pakistan and Chile, which are expected to be closed next year. Future ODP phaseout will thus stem from multi-year agreements making the second implementation indicator, "ODS phased-out for individual projects" less relevant in the case of the Bank. 74. In 2005, issues of particular concern to the Bank concerned the chiller subsector, the CTC sector in China and monitoring of and reporting on multi-year projects. The Bank is pleased to see that the Executive Committee has recognized the significance of the Global Chiller Project (described more fully in Section III.A) in not only addressing CFC phaseout but in reducing energy consumption, and in turn, reducing carbon emissions. The Bank strongly supports further development of projects which are able to combine several environmental objectives, leverage funds from multiple sources and exploit inter- linkages. 37 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY - DECEMBER 2005 75. China received approval of Phase II of the CTC Production and Consumption Phaseout in Process Agents Project in November 2005 (see Section I.C. on multi-year projects for more information). The Bank is interested to see the how the decision by the Executive Committee to take it upon itself in determining acceptable levels of CTC emissions will play out in the future with the Parties to the Montreal Protocol, as the devolution of this type of decision-making is a first in Montreal Protocol history. 76. In terms of monitoring and reporting in multi-year agreements, the 47th Meeting of the Executive Committee adopted new reporting requirements for multi-year projects based on a series of recommendations made by the MLF Secretariat. The World Bank had raised several concerns with regards to the new recommendations before they were approved by the Executive Committee. The main concern was that Decision 47/50 and previous decisions taken in the context of projects with implementation delays and completed projects with balances appeared to be recasting these performance- based agreements as traditional, investment-oriented conversion projects. Annual tranches are being treated more and more as individual projects with the expectation that specific details of progress, along with the flow of resources are reported at the activity level. 77. This trend, if continued, may conflict with what Article 5 countries with multi-year projects understand to be their obligations as per their agreement with the Executive Committee. In most of the multi-year agreements where the Bank is serving as an Implementing Agency, it is the responsibility of the country to do the reporting ­ i.e. to prepare the annual work plans and to track financial flows at all levels. When new reporting requirements are added post facto, this, in essence, changes the terms of the agreements. The Bank fully supports the sharing of information and full transparency as implementation proceeds with the Executive Committee as it is essential to enable Executive Committee decision-making and monitoring. However, a balance is needed where reporting is sufficient for these purposes but not overzealous to the point that the unique nature of performance-based, country-driven sector and national ODS phaseout plans is compromised. Countries will have to focus most of their attention on meeting their obligations per the Executive Committee agreements, and of course the Montreal Protocol, in particular as ODS consumption and production ceilings sharply decrease in 2007. Meeting obligations when implementing annual work plans should be the priority and reporting should be simply a tool to help countries, the Executive Committee and Implementing Agencies determine if countries are on the right track. 39 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Annex I COUNTRY DEVELOPMENTS Environment Department The World Bank 40 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 ANTIGUA AND BARBUDA Country Developments The Executive Committee approved Antigua and Barbuda's National CFC Phaseout Plan in December 2004. The World Bank has worked with the Government to establish a legal agreement for channeling the funds to the country and the preparation of the grant agreement is in the last stages. Pending final clearance which is expected in 2006, the grant agreement package will be submitted to Antigua and Barbuda for its final review and signing. In parallel to that process, the Government and the Bank have worked together to lay down the ground work required for supporting implementation of the NCPP. In order to allow implementation of the Terminal Phase-out Plan to move forward without delays once the agreement is signed, consideration has been made to include provisions for retroactive reimbursement in the agreement. Finally, to familiarize the country with some of the implementation and financial management issues surrounding project implementation, the Bank financed the attendance of a country representative at its Ninth Annual Financial Agents Workshop. A mission is expected in June 2006. ARGENTINA Country Developments The umbrella project suffered delays in its implementation due to changes in the government (Secretary of Industry). The total number of projects in the portfolio has reached 22. Four of the projects are under execution (Halon Bank, Methyl Bromide, FIASA (production sector), and Neba). Two projects (Delta and Servex) are physically completed and awaiting financial closure. Neba had not recovered from its legal and financial difficulties as of the end of 2005 and a local court sought expressions of interest from private enterprises interested in taking ownership of the plant and the project. New ownership for NEBA was found at the beginning of 2006. Finally, the chiller replacement component of Argentina's existing NCPP was approved at the 47th Executive Committee Meeting. One new project is under development for MDIs and planned for submission to the Executive Committee in late 2006. The proposed MDI project is included in the 2005-2007 World Bank Business Plan that was submitted to the Executive Committee in early 2005. BAHAMAS Country Developments The Bahamas Terminal Phaseout Management Plan (TPMP) became fully operational in mid-2004. Two tranches of funds have been approved by the Executive Committee to date, with the first tranche completely disbursed to the country. The Bahamas is believed to have met its consumption reduction target for 2004-2005, with 23 tonnes being imported in 2005 ­ 2 tonnes under the ceiling. This consumption still needs to be verified. 41 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Because CFC demand declined faster than anticipated, a number of activities proposed in the 2004-2005 Biennial Action Plan became unnecessary. The plan therefore emphasized more public awareness and training of customs and other relevant stakeholders to ensure that ODS consumption reduction achievement thus far would be sustainable. The Bahamas is preparing the next Biennial Action Plan along with the 2005 verification and financial audit for 2004-2005. The BEST Commission has continued its intensive public awareness activities, as well as its delivering training targeted to MAC and refrigeration sector technicians and to customs officers which are key to the TPMP. BRAZIL Country Developments All approved projects are physically and financially completed. CHILE A. Country Developments One project continues active implementation in 2006: the phaseout of halon consumption. A methyl bromide consumption phaseout project was approved by the Executive Committee in 2005, however, this project was subsequently withdrawn by the Chilean government because of political difficulties, and is currently under re-evaluation with UNDP. These funds will be returned to the Multilateral Fund at the 49th Executive Committee Meeting. The halon project has required establishment of an import-quota system in order to move to implementation, which, in turn, has required passage of enabling legislation and issuance of regulations. The law was passed in 2005, issued by presidential decree in March 2006, and the regulations are presently under development. B. Institutional Strengthening Unit The National Ozone Unit in the Comisión Nacional del Medio Ambiente continues its work on project implementation and in coordinating activities of all implementing agencies active in the country, and has been re-funded by the Executive Committee for US $186,500 through 2007 in November 2005. CHINA Country Developments China has phased out more than 132,000 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 III and ODS IV Bank umbrella projects. 42 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 ODS III: There are 94 MLF-funded investment activities under the ODS III project. Of these 94 activities, 7 have been cancelled and 87 completed as of the end of 2005. ODS IV: Thirty annual programs have been approved by the MLF (including 2006 annual programs): nine annual programs for the halon sector plan, eight annual programs for the CFC production closure plan, five for the foam sector plan, five for CTC phaseout in the process agent sector (four for phase I, one for phase II), one MAC sector plan, one sector plan for the commercial refrigeration sector, and one sector plan for the TCA sector. Nineteen of the annual programs have already been completed (seven halon, six CFC production, two foam, three CTC/PA I, and one MAC). COLOMBIA Country Developments The Bank's MP program in Colombia is entering its final stages, as the last two projects that remained under implementation, namely umbrella projects for the foam and commercial refrigeration sectors, were physically and financially completed in 2005. These two projects contributed to a combined phaseout of roughly 46 ODP tonnes. A final project was approved at the 47th Executive Committee Meeting for the phaseout of CTC used as a process agent in the manufacture of chlorine. Funds were also received, through this project, to assist the Government in the phaseout of all non-essential uses of CTC. Implementation of this project is expected to take two years, however, it will be transferred to UNDP in 2006. ECUADOR A. Country Developments During 2005, the Government of Ecuador received approval of US $439,319 for a national phaseout plan in 2005. Three companies (Industrias Verton, Mora Refrigeración, and Rojas Cepero Hermanos) participated in the industrial conversion process. Rojas Cepero Hermanos completed their conversion during 2005 (including destruction of equipment), while Verton and Cepero started the process of importing the new equipment. This subcomponent is expected to be completed during 2006. With respect to strengthening of customs, six portable detectors were acquired and a gas chromatograph is being procured. The customs office conditioned a lab to house the chromatograph. In addition, training of customs officers on how to prevent illegal trade of ODS was carried out during the year. The recovery and recycling component of the NCPP is well under way. Initial equipment (fifteen R&R machines) has been acquired. The PIU and SECAP trained 48 workshops in three cities (Quito, Cuenca, and Guayaquil). Procurement of 48 machines, both R&R and 3R, is underway. Finally, a high demand was identified in the past in the solvent subsector. During January 2006 an international team of experts will travel to Ecuador to provide technical assistance to consumers and importers of solvents. Their report will be the basis to determine whether a new project for this sector should be prepared and submitted to the Secretariat during 2006. 43 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 With regards to the methyl bromide subsector, the investment project was concluded during January 2005, when the baseline equipment was destroyed. The second subproject in this sector, the demonstration with ESPE (Escuela Politecnica del Ejercito), was unilaterally changed by the Executive Committee from a demonstration project with no phaseout planned to a technical assistance project with an expected phaseout of 15 ODP tonnes; the project progressed very well in 2005. Six different alternative treatments were tested, and the results presented at an international seminar during the second half of 2005. A compendium of the alternatives to methyl bromide is being prepared for publication, as well as a set of booklets that will be distributed to unions and users around the country. B. Institutional Strengthening Unit For the institutional strengthening activities, in 2005, public awareness campaigns were still underway, including participation in Ozone Day, the children's 2nd 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. In addition, a training course on ozone depletion was carried out for the 22 Provincial Environmental and Road Education Chiefs. INDIA Country Developments The Ozone Cell of the Ministry of Environment and Forests issued quotas for the production of CTC for non-feedstock applications in early 2005. The protocol for verifying CTC production and CTC feedstock consumption was finalized in the second quarter of 2005. The four CTC producers and all CTC feedstock users have been licensed and agree to the verification protocol. A trial verification was initiated during the fourth quarter of 2005. The actual verification of 2005 consumption and production will be carried out during the first or second quarter of 2006. Two disbursements amounting to US $10 million were made in 2005. Additional disbursement of US $7.1 million will be made during the first quarter of 2006. This will leave a balance of less than US $940,000 from the approved funds. This balance will be disbursed in 2006. In 2005, two workshops for the consumption sector were organized to assist CTC-consuming enterprises to prepare their applications for funding from the GOI to support their phaseout activities. A coordination meeting was held by MOEF to develop a coordinated annual implementation plan for 2005. The PMU has been fully operational. A project implementation manual has been finalized and is being used as a basis for reviewing and approving all subprojects under the sector phaseout plan. Technical appraisal of more than 20 enterprises was completed in 2005. The Bank plans to undertake at least three supervision missions in 2006. This intense supervision is required in order to maintain the momentum of project implementation during the first couple years of the project. The Ozone Cell has already issued the CY2006 production quota in accordance with the Production Quota Order under the Ozone Rule to the four CFC producers. The maximum production quota for 2006 is at the level stipulated in the Agreement for the Project (7,342 MT). In 2006, the Ozone Cell will continue its effort to strengthen the monitoring system of CFC distribution in India through registration 44 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 of sellers, dealers and buyers of CFCs. In approving export licenses to CFC producers, the Ozone Cell will take into account information received from importing countries on their registered importers. Activities will be organized to strengthen public awareness targeted to end users (i.e., owners of CFC equipment). For example, the Ozone Cell is exploring an opportunity to partner with the private sector to organize free servicing days, targeting taxi companies in four cities. Other activities to support implementation of the ongoing sector plan for the refrigeration servicing sector, including additional dealer workshops to extend the coverage of the registration system mentioned above, will be carried out in this calendar year. In 2006, the Ozone Cell will launch a new initiative, development of a monitoring protocol. Given that funding for CFC phaseout related activities from the Multilateral Fund could be available only up to 2010, it is necessary for a long-term plan to ensure that mandates of the PMU will be mainstreamed into the MOEF's operational functions. This would help define what relevant actions or systems should be set up now and what activities should be undertaken by the PMU to ensure a smooth transition. INDONESIA Country Developments Two traditional investment projects are ongoing as of the end of 2005, including one foam group project under the Indonesian Foam Association and the halon banking and management project. The AFI molded project was physically and financially completed in December 2005. 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 is currently ongoing, however, as at the end of 2005 it successfully phased out 954 ODP tonnes. A Halon Advisory Panel meeting was held on October 26-27, 2005 to discuss among others the categorizing of halon for essential use/critical use, listing of interim critical use, and strategizing halon management including setting up a regulation on halon. The GMF has prioritized the objective of addressing the essential users, fire authorities and the fire equipment industry (including distributors) as critical to the success of the halon banking operation. The Government of Indonesia is making some progress in improving the import licensing and quota system to monitor and control the import of Ozone Depleting Substances (ODS). The Bank was apprised that PT.PPI (the only registered importer in Indonesia) now has the mechanism to nominate another importer in Indonesia to import ODS. A revised draft amendment to the existing regulation has been prepared which will be enacted once agreement is reached by the Ministry of Trade. The Standard Operating Procedure has been drafted for the import licensing and quota system and circulated amongst the various government stakeholders. Meetings are now regularly being held with the Ministry of Trade, the legal importer (PPI), the Ministry of Finance, the Ministry of Industry, and KLH to discuss the amendment of the Decree No. 789/MPP/KEP/12/2002. The Directorate General of Customs and Excise signed a memorandum of understanding in December 2005 to jointly control, prevent, detect and examine the documentation of ODS arriving in the country. Under the eight-point agreement, the Ministry of Environment will train customs and excise officials to increase their capacity to identify these substances. 45 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 JORDAN A. Country Developments The last remaining ongoing aerosol project Arab Chemicals, was completed per Dec. 28/2 in February 2005. With this completion, all traditional investment projects under Bank implementation have been completed. The exception is the terminal halon umbrella project. All enterprises covered by the project have been converted, however, some training workshops remain and a study tour which has proven difficult to execute. A technical assistance project also was ongoing by the end of 2005, the halon banking project. Past delays were due to issues opening the letter of credit for the equipment. In January 2005, the remaining equipment was delivered. The implementation of the National ODS Phaseout Plan (NOPP) is progressing as scheduled with disbursement occurring in 2005. Under the MDI component, the Arab Center for Pharmaceutical Products was awarded a contract. Equipment was delivered in May 05 and commissioned in November. Under the foam component, six companies have been identified and are implementing subprojects. Finally, for the MAC component, the equipment procurement process has begun and a contract award for the equipment is expected in 2006. To complement the NOPP, a new project is being discussed with the country ­ the Executive Committee approved funds at its 47th Meeting for a Global Chiller Replacement Project to be implemented by the Bank. Jordan is included for eventual participation in the project. In terms of Bank work directly in the country, the Bank conducted only one mission to Jordan in 2005 due to restrictions on travel by staff to the region. B. Institutional Strengthening Unit Activities of the Ozone Unit in 2005 included facilitating phase out 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 also conducted its normal reporting for the MLF and Ozone Secretariats, to the Bank and other Government agencies. Finally, representatives of the Ozone Unit attended normal meetings surrounding the implementation of the Montreal Protocol, including the 17th Meeting of the Parties and the three Executive Committee Meetings in 2005. Phase VI of the Institutional Strengthening (IS) project ended in mid-2005 and the Executive Committee approved Phase VII of the IS project at its 46th Meeting. This tranche will focus 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 Implementing Agencies that are active in the country. Ongoing supervision and public awareness activities are also included. Specific activities will be to: · follow up implementation of investment projects for different sectors consuming ODS; 46 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 · manage national compliance plans, identify the gaps and update the plans of action to ensure compliance; · continue promotion of public awareness, including in the industrial sector, about ozone related issues; · monitor compliance to the Montreal Protocol including managing the day-to-day operations of the ODS import/export licensing systems; · collect data on ODS for reporting to the Ozone Secretariat and MLF Secretariat; · facilitate the work of decision-makers related to ODS phaseout; · maintain communication between the Ministry of Environment and relevant stakeholders in the public and private sectors; · develop and update relevant legislation and rules to phase out ODS; and · strengthen government commitment, i.e., decision-makers, industry, importers, traders and other stakeholders to achieve and sustain ODS phaseout. MALAYSIA Country Developments Implementation of project activities continues, in line with the approved National CFC Phaseout Plan. In the foam manufacturing sector, 22 of the 26 individual foam conversion projects have been physically and financially completed in 2005. The final four projects to be implemented under this component were appraised in August 2005. All projects are expected to be completed by June 2006, at which point the foam sector will be closed. In the solvent sector, one project is under implementation, with physical completion planned in May 2006. The sector will be closed upon completion of this project. In the servicing sector, all activities described in the approved NCFCPP are ongoing, including: · Mandatory MAC Inspection ­ Since January 2005, vehicle inspections have been carried out at 28 branches of PUSPAKOM inspections around the country that received a Refrigerant Identifier through the NCFCPP. Commercial vehicle inspections are mandatory while private vehicle inspections are voluntary. · Certification of Service Technicians ­ Approximately 2,526 out of 3,000 MAC service workshops have been registered under the NCFCPP at the end of 2005. Just over 2,800 technicians have received training by December 2005, of the target of 3,000 trainees. · Verification and vouchers for MAC service tools ­ A total of 2,506 out of 3,000 workshops have received vouchers for subsidy of MAC service tools. The target for this component is to distribute all remaining vouchers by June 2007. · Verification and vouchers for R&R machines ­ A total of 377 workshops out of 608 eligible MAC workshops have received vouchers for the subsidy of MAC R&R machines. The remaining vouchers will be distributed in 2006. 47 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 · Refrigeration Servicing Sector ­ A Group Coordinator for the Refrigeration Servicing Component was selected at the end of 2005 and the appointment will be effective in early 2006. Activities under this component are expected to start in the first semester of 2006. A hands-on training session for custom officers was conducted in 2005, and a final one will take place in 2006. A total of 52 refrigerant identifiers have been distributed to the Customs Department to check shipments of ODS and to identify potential issues of illegal trade of CFCs. The Malaysian Transition Strategy for CFC Phaseout in MDIs was published in February 2005 and it has been distributed to hospitals, clinics, universities, and private pharmacies. The latest road show to present the strategy was organized in September 2005. Awareness activities under this component will continue in 2006. MEXICO Country Developments The Bank's Montreal Protocol program in Mexico is entering its final stages with three subprojects under execution: sterilization, industrial aerosols, and chillers (second phase). With respect to industrial aerosols, the last two companies still consuming CFCs in Mexico were involved in this subproject: Tecnosol and Dimmex. Tecnosol ceased consumption of CFCs, and Dimmex will cease by March 2006. The final production audit for DIMMEX is expected by mid April, and, when it is completed, final disbursement will be made to the company. Regarding the sterilization subproject, five subgrant agreements have been signed and two remain to be signed. Implementation of four of the seven subgrants was completed during 2005. The ISSSTE project is complex and it is following a very tight schedule; it is expected to be completed by June 2006. The other two projects are retroactive so no implementation delays are expected. Finally, regarding the chillers subproject, the SGA between NAFIN (the Financial Intermediary) and FIDE is expected to be signed in January 2006, with transfer of funds expected soon thereafter. OMAN Country Developments The Bank received approval of one halon banking project for Oman in 2003. However, based on mutual agreement between the Government of Oman and the Bank, it was decided to transfer the project to UNIDO. The transfer occurred in July 2005 at the 46th Executive Committee Meeting. 48 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 PAKISTAN Country Developments The Government of Pakistan moved closer to completely ending CFC-based manufacturing in 2005 with the completion of five projects which combined, have phased out 343 tonnes of CFCs (between 2003 and 2005). This leaves five ongoing projects which are all expected to be completed in 2006. The acceleration in project implementation in Pakistan after a period of modest implementation speed is largely due to an extremely high increase in the cost of CFCs in the last two years. Two of the ongoing projects cover the thermoware subsector. All enterprises covered by these two umbrella projects have converted operations and destroyed their baseline equipment. An additional 3.7 MT of phaseout was achieved in 2005, meaning that the two projects have met their planned phaseout targets of a total of 345.25 MT phaseout of CFC-11. The two projects are expected to be completed in early 2006. Two projects for closing out remaining CFC-based manufacturing in the foam and refrigeration subsectors that were approved in 2003 and 2004 respectively have made marked progress in implementation. The foam project in particular is moving quickly with one enterprise already having converted operations in 2005 (for 45 MT of phaseout). The Bank had two supervision missions to Pakistan in 2005 and two additional technical missions led by an international consultant. PHILIPPINES A. Country Developments The Government of the Philippines continues to implement three projects in cooperation with the Bank: an institutional strengthening project, the National CFC Phaseout Plan (NCPP) and the Methyl Bromide Phaseout Strategy. In addition, in November 2005, the Executive Committee approved funds for a Global Chiller Replacement Project to be implemented by the Bank. The Philippines was included for participation in the project. 2005 marked the third year of NCPP implementation. Some delays were experienced in the servicing sector, namely in launching the voucher system for distributing subsidies to purchase servicing equipment and tools. These were due to time needed to reevaluate the direction to be taken in terms of the training, to reassess the needs of shops for equipment and the associated value of the voucher and to qualify suppliers. In addition, a change in personnel in both the Philippines Ozone Desk and the Project Management Unit added to the time needed in 2005 to launch the pilot phase of the voucher scheme and to start preparation for the full implementation. In regards to the manufacturing sector, most conversions have taken place and CFCs are no longer utilized, however, project implementation was ongoing as of December 31, 2005. 49 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 The NCPP is characterized by strong inter-agency coordination and the country has instituted various policy measures and has undertaken extensive consultations, public awareness raising and other communication programs. Consequently, the Philippines more than met annual CFC consumption reduction targets between 2003 and 2005. 2005 was the first year of implementation of the Methyl Bromide Phaseout Strategy. Terms of reference were drawn up for several consultancy positions in the Project Management Unit and one regular staff from the Fertilizer and Pesticide Authority (FPA) of the Department of Agriculture was assigned to the project. Activities included the issuance of guidelines to tighten the control of methyl bromide (MB) consumption (from importer to end-user); monitoring of fumigators; consultations with the Bureau of Plant Industries (BPI) on MB consumption and QPS use; consultations with stakeholders (exporters, fumigators and pest control operators) and three regional orientation workshops for concerned government agencies (BPI, FPA and Customs). 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 2005. B. Institutional Developments The Philippines Ozone Desk (POD) experienced a relatively quick rate of disbursement of Institutional Strengthening (IS) project funds in 2005 which corresponds to the number of initiatives undertaken in the year. These comprised of monitoring and enforcement, development of the country's halon management plan, public awareness (including Ozone Month celebration) and on advancing steps for the ratification of the Montreal and Beijing Amendments to the Montreal Protocol. Public awareness activities continued in 2005, including the redesign of the website, printing and distribution of the Chemical Control Order for an ODS primer, calendars and other outreach publications, and hosting events in schools. A communications strategy was finished in June 2005 and will cover 2004-2006 and will be followed by an evaluation to determine if the strategy requires reorientation. In addition, POD worked with PMU staff to better align approaches to information exchange and communication as well as in work and financial planning. The aim is to promote a more coordinated and comprehensive approach, in particular when dealing with local and provincial government and other government agencies and departments. Through the IS project, POD continued its work on halon and a meeting was conducted with the Bureau of Fire Protection to pursue the formation of a technical working group to come up with a management plan on existing halon stocks. The Department of the Environment and Natural Resources (DENR) contracted a legal advisor to handle and address legal issues concerning foreign assisted projects under the Unified Project Management (UPM) set-up. The advisor commenced reviewing the Chemical Control Order and other relevant rules and regulations to determine how to manage illegal traders of CFC, among other things. 50 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Regular annual activities were also conducted, such as celebration of the International Month for the Preservation of the Ozone Layer through various public awareness tools, monitoring of completed projects and data reporting, and spot verification of shipments. The Government plans to request renewal of its institutional strengthening project at the first meeting of the Executive Committee in 2006. Finally, POD representatives participated in the 25th Meeting of the Open-Ended Working Group, the 17th Meeting of the Parties, UNEP network ODS and customs officers meetings, a World Bank East Asia regional NCPP meeting held in Bangkok and the Bank's Ninth Annual Financial Agents Workshop held in Washington DC. THAILAND A. Country Developments National CFC Phase out Plan (NCPP): Implementation of project activities continue, in line with the approved project document. Manufacturing sector: · Aerosols ­ The aerosol sector has been closed. · Foam sector ­ A group project including 18 SMEs is ongoing, and is expected to be completed by the end of 2006. A total of 29 individual enterprises in the foam sector will receive assistance for conversion, and all projects are expected to be completed by the end of 2006. · Solvents ­ All activities under the CFC-113 and CTC sectors have been completed and the sectors have been closed. The final individual 1,1,1 TCA project will be completed in early 2006, while the group project for conversion of 1,1,1 TCA users in the garment sector is underway. Servicing sector: · Mandatory MAC Inspection ­ Regulation to include inspection of the MAC system refrigerant as part of the annual vehicle inspection has been effective since January 2005. Procurement of refrigerant identifiers for inspection stations is ongoing. · Train-the-trainer and certification of service technicians ­ Training of trainers has been completed. The final phase of training for MAC workshop technicians will be completed in the first semester of 2006, after which the target number of technicians (2,750) will have been trained. · Subsidy for MAC Servicing Tools and Recovery and Recycling Machines ­ A total of 2,073 vouchers for basic MAC service tools have been distributed to certified service shops, of which roughly 80% have received the equipment. No vouchers for R&R machines were distributed in 2005. · The customs training program is ongoing. Since February 2005, the Customs Training Center has provided training to 500 customs officers working in major ports/entry points across the country. Individual projects: · Halon management, recovery, recycling and banking ­ A revised project proposal was approved at the 47th Executive Committee Meeting. The Committee approved the partial reallocation of the 51 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 balances from both the Halon Management project and the Terminal Halon Conversion. Both projects will remain open until 2008. · Refrigeration sector ­ All activities have been completed for the Kulthorn Engineering umbrella project and the PCR will be submitted in 2006. National Methyl Bromide Phaseout Plan: The amendment to the Grant Agreement between the Royal Thai Government and the Bank for the implementation of the National Methyl Bromide Phaseout Plan was signed by the Bank in September 2005. The FI was selected and project activities are expected to begin in early 2006. B. Institutional Strengthening Unit The institutional strengthening project is ongoing. Activities concluded include: · Announce import quotas for 2003-2010, as per schedule established in the NCFCPP. · Implementation of the revised import license approval process. · Consultation meetings and workshops with relevant industries to strengthen the import control of HCFCs and to identify any measures required for preventing growth of HCFC demand. · Quarterly meetings with Customs Department to update ODS import data. · Semi-annual meetings with relevant industry sectors to monitor ODS consumption by chemical type and by sector. · Organize training for DIW staff on CFC phase out and the relevant safety measures. · Follow up completed investment projects to ensure that beneficiaries are no longer using CFCs. Activities underway from 2005 to 2007 include: · To enhance the effectiveness of controls on ODS and prevent illegal trade. · To announce regulations on prohibited use of ODSs. · Ratify the MP amendment. · Develop MIS for ODS. · Develop policy to address the HCFC issue. · Finalize all ongoing individual projects under NOU. · Upgrading of NOU's facilities. · In-country training and coordination activities to increase knowledge and cooperation of staff on ODS phase out activities within DIW as well as between DIW and other concerned agencies. TUNISIA A. Country Developments Five additional foam projects were completed in early 2005, resulting in a phaseout of 56.6 MT ODP. With the completion of these projects, the portfolio of investment activities being implemented under the World Bank is now closed (with the exception of financial closure of individual projects which is expected to take place in 2006). Tunisia has phased out a total of 472 ODP tonnes through twelve projects under the World Bank since inception of the Tunisia MP program in 1991. 52 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 The Government of Tunisia is looking to completely end remaining CFC consumption in the manufacturing and servicing sectors a goal that was confirmed during the preparation of the country program update (CPU). The CPU was approved by the 48th Executive Committee in November 2005. The national ODS phaseout plan will be further refined and resubmitted to the 49th Executive Committee Meeting. In November 2005, the Executive Committee approved funds for a Global Chiller Replacement Project to be implemented by the Bank. Tunisia is included for eventual participation in the project. B. Institutional Developments The third phase of the IS component in Tunisia was nearing completion as of the end of 2005 and is planned to be renewed as phase four at the first Executive Committee meeting of 2006. The objective of the project was to implement activities in order to gradually eliminate the use of ozone depleting substances (ODS). More specifically, the project aimed to consolidate accomplishments by the "Bureau Ozone," or NOU; to reinforce the regulatory framework aimed to better control the imports and consumption of ODS; to pursue training activities with an emphasis on consultations and diffusion of new techniques to accompany ongoing projects. Activities undertaken in 2005 included: (i) project identification, execution, supervision, monitoring and follow-up of completed projects; (ii) technical assistance to the sub-projects and enterprises involved in the ODS phaseout program; (iii) continuation of the preparation of the country program update and national ODS phaseout plan; (iv) execution of public awareness campaigns (press communiqués, interviews, radio and television spots, conferences, etc.); (v) data collection on ODS import and consumption; (vi) writing legislation for implementing the Montreal Protocol and preparing amendments in view of their adoption by the Government. Accomplishments in 2005 include the ratification of the Beijing Amendment on 16 May 2005. Customs control software was developed and recently underwent two important upgrades: · Every ODS used in Tunisia now has a specific customs code (NGP); · Each time an importation of ODS is recognized via the customs software, the system asks automatically for an Ozone Office Authorization and Industry Ministry Authorization ­ without which importation is disallowed. The Bureau Ozone participated in several meetings and workshops throughout the year including workshops of regional networks of ODS officers and the 17th Meeting of the Parties. 53 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 TURKEY A. Country Developments By the end of 2005, the cumulative disbursement of MLF funds to Turkey was US $21.1 million under the Bank-supported PODS-I and II projects. Combined with a UNIDO-supported project, there has been a total phaseout of 4,237 ODP tonnes. The fifth tranche of the refrigeration sector plan (RSP) was approved by the Executive Committee in December 2005, adding another US $0.75 million to the US $7.75 million already approved for the first four RSP tranches. End-user retrofits, chiller conversions and training will continue to be supported during 2006 as additional applications are submitted by enterprises and approved for funding. The training program will continue to be extended throughout the Turkish education system. Turkey's first end-user retrofit contract was initiated in late 2005. By the end of 2005, five contracts were signed for recovery, recycling and reclamation, two contracts for chiller projects, one contract for an end-user project, and one contract for management/technical assistance, totaling US $0.4 million. To date, the cumulative value of contracts signed under the first four RSP tranches combined is US $6.7 million, or 86% of the US $7.75 million total. The methyl bromide dried fig project was delayed due to a pressure tank which was damaged in transit to Turkey and had to be returned to Germany for repairs. Installation was further delayed into the second quarter of 2005 due to uncertainties as to its temporary location, pending a municipal government mandated future move by the beneficiary, TARIS. Operations were finally initiated successfully in conjunction with processing during the first subsequent harvest season which began in September 2005. The installation will ultimately be moved to TARIS' new permanent plant location by end 2006 at which time methyl bromide use will terminate and remaining use will be completely phased out by TARIS. 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 to be established at its laboratory site. A halon project action plan was prepared in August 2005 and approved by the World Bank. 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 (MeBr) in Turkey in compliance with Montreal Protocol provisions by establishing the MeBr National Strategy Committee and MeBr Steering Committee and monitoring system; creating a regulatory framework for MeBr phaseout and use; and increasing farmer and public awareness. In 2005, MARA, supported in part by funds remaining under the second IS project, prepared an Action Plan for the promotion, training and dissemination of MeBr alternatives throughout Turkey. The Action Plan extends Turkey's MeBr 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 newly established MeBr Resource Group (comprised of participants from MARA, MoEF, 54 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Aegean University, UNIDO, TTGV and the Bank) was convened for the first time in Ankara in November 2005 to review and approve the Plan. Among other things, it was agreed that training programs on MeBr alternatives would be conducted specifically for staff from MARA's Plant Protection and Farmer Training and Extension sections. Proposed project activities, partners and budget for projected expenditures under the third IS project were also determined. In June 2005, the Bank conducted a supervision mission to 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 at its 44th Meeting in December 2004 approved in principle US $16.05 million in funding for the phased reduction and closure of the entire CFC production in Venezuela, 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 two of these tranches, totaling US $11.3 million, have been disbursed. Production levels are in conformity with the agreed amounts, with about 1,487 tonnes of ODS reduced so far. PRODUVEN is on track to close its production of CFC-11 and CFC-12 by the end of 2006. VIETNAM Country Developments There are two ongoing activities for Vietnam which are being implemented through the World Bank, the national CFC and halon phaseout plan; and preparation of a methyl bromide sector plan. The first targets for the national CFC and halon phaseout plan are the 2005 consumption levels for Annex A Group I and II chemicals, and CTC. Verification of these consumption targets will be initiated during the first and second quarters of 2006. During July 2005, the Government of Vietnam established an import/export licensing system which is one of the policy recommendations of the plan. The licensing system has been in operation since then. A ban on imports of CFC-containing equipment will be issued in January 2006. The PMU was established in October 2005 and is fully staffed. The grant agreement between Vietnam and the Bank will be signed in January 2006, allowing approved funds to be used for implementing the Plan and also to retroactively cover the cost of PMU operations in 2005. 55 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 A project implementation manual including terms of reference for all consultant services to support the implementation of the plan, as well as specifications for refrigeration servicing equipment, has been finalized. The process for selection of qualified suppliers was initiated in 2005 and will be finalized after the grant agreement is signed. The PMU has already initiated the technical and financial appraisal of the individual subprojects (insulation panel and Vietsovpetro). The Bank undertook three missions in 2005. The objectives of the missions were to provide technical support to the preparation of the project implementation manual; provide procurement and financial management training; and to engage in policy dialogue with the relevant ministries (i.e., Ministry of Natural Resources and Environment, Ministry of Trade, and General Customs Department) regarding the import/export licensing systems and the other policy measures to support implementation of the national CFC and halon phaseout plan. The Bank also assisted the Ozone Office to engage in policy dialogue with the Plant Protection Department of the Ministry of Agriculture and Rural Development with regard to the control and monitoring of methyl bromide consumption. The preparation of the methyl bromide sector plan is underway. The sector plan proposal will be submitted for the Executive Committee's consideration at its last meeting in 2006. 57 MONTREAL PROTOCOL OPERATIONS ANNUAL PROGRESS REPORT JANUARY- DECEMBER 2005 Annex II PROGRESS AND FINANCIAL REPORTING DATABASE Environment Department The World Bank