Update on decisions from the 61st, 62nd and 63rd meetings of the

Executive Committee Executive Committee

A presentation prepared by the Multilateral Fund Secretariat

May 2011

Overview of project approved at the 61st through 63rd Meeting

Investment projects and work programme activitiesUS $80.5 million plus US $12 million in support costs

First tranches of HCFC phase-out management plans (HPMPs

57 HCFC stand-alone projects in ten countries57 HCFC stand-alone projects in ten countries

Preparatory activities for HPMP investment activities

Resource mobilization

ODS disposal

Institutional strengthening

Tranches of multi-year projects

The 2010 budget of the Multilateral Fund is US $275.4 million

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HCFC phase-out management plans (HPMPs)

HCFC phase-out management plans (HPMPs) or Stage 1HPMPs and first tranches approved in principle for 60 countriesfrom the 60th Meeting to-date

Bhutan, Islamic Republic of Iran, Mongolia, Nepal*, Pakistan, Sri LankaA regional HPMP for the 12 Pacific Island Countries38 LVC countries38 LVC countries22 non-LVC countries

Stage 1 HPMP for the period 2011–2015 for 13 countries

Stage 1 HPMP for the period 2011–2020 for 28 countries andthe Pacific Island Countries

HPMPs for 8 LVC countries to address the complete phase-outof HCFCs

Bhutan, Cambodia, Croatia, Maldives, Mauritius, Namibia, Papua NewGuinea and Seychelles

*The HPMP for Nepal was approved with condition and the first tranche can be submitted when the conditionshave been met.

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HCFC phase-out management plans (HPMPs)

Meeting Approved Number Countries for which HPMPs were Approved

60th

2

4

60 2

61th

3

62nd

16

63rd

39

Sub-total 6064

th31

TOTAL 92* Including CPR and IDS differed to 64th Meeting.

Other funding approved -1

Resource mobilization (decisions 63/20, 63/22 - 63/24)US $680,00 plus support costs for global activities to be implemented byUNDP, UNEP, UNIDO and the World Bank for resource mobilization tomaximize the climate co-benefits of HCFC phase-out

Two pilot projects to address the management and disposalTwo pilot projects to address the management and disposalof waste ozone depleting substances (ODS)

Funding for start up projects in Ghana (decision 63/27) and Mexico(decision 63/28).

Funds to leverage not only ODS waste destruction but also climatebenefits

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Other funding approved - 2

Activities to sustain zero consumption of CFCs and facilitatethe phase-out of HCFCs

Terminal phase-out management plan (2nd tranche) for Eritrea (decision63/25)63/25)National phase-out plan for Iraq (2nd tranche) (decision 63/26) to sustainzero consumption of CFCs and facilitate the phase-out of HCFCs

Advance funding was provided to the former YugoslavRepublic of Macedonia for the purpose of IS due to depletedfunds

Advanced funding will be deducted from the second tranche of thecountry’s HPMP

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HCFC phase-out activities for China

Sectoral plans for HCFC phase-out in China (decision 63/59)

Intersessional consultations in Beijing from 22 to 24 February 2011 improved understanding of the challenges faced by China

At 63rd meeting a contact group was set to address outstanding issuesAt 63rd meeting a contact group was set to address outstanding issues

The Executive Committee will consider the HCFC phase-out activities for China further at its 64th meeting.

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HCFC policy issues (61st -63rd meetings)

Template for HPMP agreements (decision 61/46)

HCFC-141b in pre-blended polyols (decision 61/47)

Accelerated phase-out of HCFCs beyond 2020 (decision 62/10)

High levels of recorded HCFC consumption in LVCs (decision 62/11)

Institutional strengthening projects (IS) inn HPMPs (decision 62/15)Institutional strengthening projects (IS) inn HPMPs (decision 62/15)

Last funding tranche of HPMPs phase-out plans (decision 62/17)

Prioritization of HCFCs (decision 62/12)

Justification for second-stage conversion (decision 62/16)

Discrepancies between data reported under Article 7 and in HPMPs(decision 63/14)

Additional funding requests for HCFC phase-out outside approved HPMPs (decision 63/15)

Flexibility provision under HCFC phase-out management plans (decision 63/16)

Amendment to the HPMP agreement template (decision 63/17)

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Template for draft agreements for HPMPs (decision 61/46)

A template was approved as a reference for the drafting of anAgreement between a country and the Executive Committeeregarding HPMPs.regarding HPMPs.

Agreements for HCFC sector plans would be considered on a caseby case basis.

Future draft agreements of HPMPs would schedule the submissionof final tranches so that HCFC consumption would be reportedunder Article 7 of the Montreal Protocol before approval of the lasttranche of the HPMP agreement.

Appendix Subject

1-A Substances

Template (cont.) Standard clauses referring to data in appendices

2-A Targets and Funding

3-A Funding Approval Schedules

4-AFormat of Tranche Implementation Reports and Plans

5-A Monitoring Institutions and Roles

6-A Role of Lead Implementing Agency

6-B Role of Cooperating Implementing Agencies

7-A Reductions in Funding for Failure to Comply

8-A Sector Specific Arrangements

The phase-out of HCFC-141b contained in pre-blended polyolsthat were imported and/or manufactured domestically, andcounted as consumption under Article 7, was eligible for

HCFC-141b in pre-blended polyols (decision 61/47)

counted as consumption under Article 7, was eligible forassistance according to existing guidelines

For HCFC-141b contained in pre-blended polyols, which had notbeen counted as consumption under Article 7, to request Article 5countries that wished to seek assistance for the phase-out of suchimports:

To include in their HPMPs a list of all the foam enterprises establishedprior to 21 September 2007 that used imported polyol systems,including the amount of HCFC-141b contained therein;

To include in the starting point for aggregate reduction in HCFCconsumption the annual amount of HCFC-141b contained inimported polyol systems during the 2007-2009 period;

Provide a cost and funding schedule, accounting for the need for

HCFC-141b in pre-blended polyols(continued....)

Provide a cost and funding schedule, accounting for the need forsupport beyond 2015, for eligible consumption;

Provide a commitment to ban HCFC-141b in pre-blended polyolsystems after plants are converted;

Domestic consumption would be the basis for funding projects forHCFC 141b in pre-blended polyols but that full consumption wouldbe deducted from the starting point for those enterprisesmanufacturing pre-blended polyol systems.

Accelerated phase-out of HCFCs beyond 2020 (decision 62/10)—funding amount

The Executive Committee emphasized the need to use theFund’s limited resources effectively

LVC countries preparing to accelerate the phase-out of HCFCsLVC countries preparing to accelerate the phase-out of HCFCsshould demonstrate a strong national commitment in line withdecision 60/15

The Executive Committee decided that, for HPMPs for LVCcountries which addressed phase-out of HCFCs ahead of theMontreal Protocol schedule and which had been submitted in linewith decision 60/15, the total funding available for achieving 100per cent phase-out would be extrapolated from that available formeeting the 35 per cent reduction in consumption as prescribedin the table in sub-paragraph (f)(xii) of decision 60/44

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High levels of recorded HCFC consumption in LVCs (decision 62/11)

The Executive Committee noted the large increase inHCFC consumption in the HPMPs of several countries,some of which amounted to growth of over 200 per cent

The submission of stage I of HPMPs to assist former LVCcountries with HCFC consumption in the refrigerationservicing sector only, that was above 360 metric tonnes tomeet control measures up to 2020 will be permitted on theunderstanding that the level of funding provided would beconsidered on a case-by-case basis until otherwisedecided

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Institutional strengthening projects (IS) as part of an HPMP (decision 62/15)

Decision 59/17 allows countries to choose whether or not toinclude IS funding in their HPMPs

The inclusion of IS funding in an HPMP makes it subject to theperformance-based targets under the multi year agreementcovering the HPMP including all the conditions required forcovering the HPMP including all the conditions required forfuture tranche funding

Bilateral and implementing agencies were requested to informArticle 5 countries of the consequences of choosing to include ISin the HPMP and remind them that they could continue toreceive IS funding as stand-alone projects

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Last funding tranche of multiyear HCFC phase-out plans (decision 62/17)

The Executive Committee requested bilateral andimplementing agencies, when preparing multi-yearHPMPs, to ensure that the last tranche comprised 10 percent of the total funding for the refrigeration servicingsector in the agreement and was scheduled for the lastsector in the agreement and was scheduled for the lastyear of the plan

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Prioritization of HCFCs (decision 62/12)

Phase-out of HCFC-22 used in the manufacture ofrefrigeration and air conditioning equipment

Agencies should include an estimate of the total future amount of HCFC-22that could potentially be required until 2020 for servicing such equipment

Phase-out of HCFC-22 used in the refrigeration servicingPhase-out of HCFC-22 used in the refrigeration servicingsector

Agencies should clearly demonstrate how the proposed activities wouldreduce the growth rate in the servicing sector and contribute to meeting thereduction steps in 2013 and 2015

Projects for the phase-out of HCFC-22/HCFC-142b usedfor the manufacture of extruded polystyrene (XPS) foam

Projects would be considered when it was clearly demonstrated that theywould be required by national circumstances and priorities to comply with the2013 and 2015 control measuresAll other XPS foam projects would be considered after 2014

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Justification for second-stage conversion (decision 62/16)

Proposals that include requests for second-stage conversionsshould provide the following information as part of the justificationrequired by decision 60/44

The proportion of HCFCs consumed by enterprises that receivedThe proportion of HCFCs consumed by enterprises that receivedassistance under the Multilateral Fund for CFC phase-out, as apercentage of:

Total HCFC consumptionTotal HCFC consumption in the manufacturing sectorTotal consumption of HCFC-141b in the foam sector

The estimated cost-effectiveness value, in ODP and metric tonnes,of the proposed second-stage conversion projects as compared withthe estimated cost-effectiveness of phasing out HCFC consumptionin other manufacturing enterprises in all sectors.

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Discrepancies between data reported under Article 7 and in HPMPs (decision 63/14)

The calculation of the starting points for aggregate reductions in HCFC consumption should be based on the latest accepted HCFC consumption data reported under Article 7, consistent with decision 60/44

HCFC phase-out policy issues (continued)

Additional funding requests for HCFC phase-out outside approved HPMPs (decision 63/15)

Article 5 countries with HCFC consumption reported under Article 7 solely in the refrigeration servicing sector and with foam enterprises relying exclusively on imported HCFC-141b pre-blended polyol systems not reported as consumption on an exceptional and case-by-case basis, and consistent with decision 61/47, can submit a funding request for the conversion of those enterprises during implementation of stage I of the HPMP providing that a number of conditions and provisos detailed in 63/15 were fulfilled

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Flexibility provision under HCFC phase-out management plans (decision 63/16)

The flexibility provision under HPMPs in relation to technology changes and funding reallocation among sectors would be considered at the 64th

meeting.

HCFC phase-out policy issues (continued)

meeting.

Amendment to the HPMP agreement template (decision 63/17)

A paragraph was added to the template for draft agreements for HPMPs to address concerns that some countries, in their submissions, appeared to be indicating that efforts to achieve compliance with the 2013 HCFC consumption freeze would be limited to selected sectors.

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Funding for conversion of eligible enterprises with very little or no current consumption of HCFCs

Confirmation of the decision, taken at the 16th meeting, that eligible ODS consumption at the enterprise level should be calculated on the basis of either the year, or an average of the three years, immediately preceding project preparation.

Applicability of HCFC cost-effectiveness thresholds for LVC

HCFC phase-out policy issues (continued)

Applicability of HCFC cost-effectiveness thresholds for LVC countries

The issue was already covered by previous decisions taken by the Executive Committee and by existing procedures.

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2011-2014 business plans

The Executive Committee endorsed the 2011-2014 consolidatedbusiness plan (decision 63/5).

maintained the activities in the business plan for those countries that had already received funding to phase out more than 10 per cent of their estimated baseline/starting point

maintained the current levels of funding for institutional strengthening (IS) for maintained the current levels of funding for institutional strengthening (IS) for business planning purposes until such time as a decision had been taken on the actual IS funding levels

set a window for ODS destruction for low-volume-consuming (LVC) countries, pursuant to decision XXI/2 of the 21st Meeting of the Parties, amounting to US $3 million

that project preparation could be funded for stage II activities and might be included prior to the completion of stage I in business plans for the years 2012-2014

With regard to any additional HPMP project preparation activity, the Committee agreed that funding should be deducted from the funding eligibility for the HPMP if a country chose to assign an implementing agency other than the one originally approved to conduct the HPMP and to request the initial implementing agency to transfer the results of the HPMP preparation to the new implementing agency

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Licensing systems (decision 62/4)

The Executive Committee requested additional information from thelead agencies for HPMP implementation on the application oflicensing systems to the importation of HCFC-based equipment

Note that decision 54/39(e) provided assistance for HCFC control measures inlegislation, regulations and licensing systems in the funding for HPMP preparationand no funding can be approved for HPMP implementation in those Article 5countries that have not included HCFC control measures in legislation, regulationsand licensing systems

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Monitoring and evaluation work programme for 2011 and 2012 (decision 63/11)

2011 work programmeCompletion of report format for multi-year agreements (MYA)Desk study on the evaluation of MYA projectsDesk study on the evaluation of MYA projects

2012 work programme will be submitted to the 65th meetingEvaluation of chiller projects using co-funding modalitiesEvaluation of metered dose inhaler projectsA strategy for the dissemination and communication of the lessonslearned

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Further information on Executive Committee decisions

All decisions can be found in the final reports of themeetings of the Executive Committee – onwww.multilateralfund.org

A Summary of decisions of each meeting is publishedfollowing the meeting – on www.multilateralfund.org andfollowing the meeting – on www.multilateralfund.org anddistributed through CAP

Multilateral Fund Secretariat always sends an official letterto countries following the meeting if any decisionspecifically pertains to that country

For example letters were to sent to * network countries following the63rd Meeting

Please send your comments or suggestions on futurenetwork meeting presentations to the Multilateral FundSecretariat

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Thank you

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Thank you