A guide for the presentation of tranches of HPPMPs

MULTILATERAL FUND FOR THE
IMPLEMENTATION OF THE MONTREAL PROTOCOL
Inter-agency Coordination Meeting
Montreal, 4 – 6September 2018
MLF/IACM.2018/2/17
23August 2018

GUIDE FOR THE PRESENTATION OF TRANCHES OF HCFC PRODUCTION SECTOR PHASE-OUT MANAGEMENT PLANS

(UPDATED AUGUST 2018)

Note by the Fund Secretariat

1.The Secretariat has developed the following guide (the Production Guide) to assist and facilitate the preparation of progress reports on the implementation of tranches of HPPMPs, and the accompanying annual implementation plan associated with the subsequent tranche for which funding is being sought. The Production Guide is supplemented by Annex I, the Format for progress reporting and annual implementation plan (the Format).[1]

2.The Production Guide took into account the extensive experience of the Multilateral Fund in the review of progress reports and plans of action for production phase-out. It follows the information requirements outlined in Appendix 4-A (i.e., “format of tranche implementation reports and plans”) of the agreement between the Government of China and the Executive Committee for the reduction in production of HCFCs, and takes into account all policies and decisions of the Multilateral Fund. The Production Guide has been developed in the context of the HPPMP implementation in China. For HPPMP implementation in other countries which have only a small number of HCFC producers, the Production Guide will be simplified as applicable. The Production Guide will be periodically revised as experience continues to be acquired in the preparation and submission of tranches of HPPMPs, and as new guidelines are agreed upon by the Executive Committee.

3.This Production Guide sets out the minimum information to be included in progress reports and plans of action associated with tranches of HPPMPs. The relevant Executive Committee decisions are also cited. A suggestion is made as to the maximum length of each section. Agencies are requested to provide data in tabular form (in Word or Excel formats) and to minimize graphical representation of data and photographs. Any additional information may be provided as an annex to the document.

4.Implementing agencies are invited to take note of the following when submitting a tranche request for HPPMPs:

(a)The progress report and plan of action should be prepared by the lead implementing agency jointly with all cooperating implementing agencies, where applicable. Consultations with the country on the progress report and proposed annual plans should take place as part of the process before the document is submitted.

(b)An endorsement letter from the Government of the country whose HPPMP tranche is being requested must accompany the official submission of the tranche request by the due deadline. Any submission without the required endorsement letter will not be reviewed by the Secretariat and will not be considered an official submission.

5.To further facilitate the process of submitting a tranche of an HPPMP, the first page of the Production Guide contains a “checklist” to be filled out by the relevant lead implementing agency with the minimum mandatory requirements for the tranche’s consideration by the Executive Committee. A list with relevant sources of information, including several documents that have been considered by the Executive Committee for the adoption of relevant decisions on HCFC phase-out, is presented at the end of the Production Guide.

6.The Production Guide consists of the following main sections:

  • Checklist for submission of an HPPMP
  • Project cover sheet
  • Progress report
  • Tranche implementation plan
  • Change to the Agreement
  • Relevant sources of information

PROJECT COVER SHEET: TRANCHE REQUEST
COUNTRY NAME
LEAD IMPLEMENTING AGENCY
COOPERATING IMPLEMENTING AGENCY
SUBMISSION OF COMPLETE DOCUMENTATION
Document / Yes/No / Comments
Progress report for previous tranche
Financial report (>20% disbursement from the previously approved tranche)
Verification report
Tranche implementation plan
Official endorsement letter
Revised Agreement (where applicable)
HCFC REGULATIONS IN PLACE
Regulation / Yes/No / Comments
HCFC licensing system (operational)
HCFC quota system (operational)
SUBMISSION OF ODS DATA REPORTS
Report / Yes/No / Year of data / Comments
Country programme
Article 7 data (latest report)
Explain any data discrepancies:
HPPMP DOCUMENT
Phase-out commitment (%) / Year of commitment
LATEST ANNUAL PROGRESS AND FINANCIAL REPORT REMARKS (Latest Status Report if relevant)
Provide the latest updated information either contained in the Annual Progress and Financial Report or the latest status report.
I. PROJECT COVER SHEET

1.Part of the information included in the project cover sheet is extracted by the Secretariat from reports prepared and submitted by Article 5 countries (e.g., progress report on the implementation of the country programme and consumption and production of ozone-depleting substances (ODS) reported under Article 7 of the Montreal Protocol), or documents considered by the Executive Committee (e.g., business plans). The tables on targets and funding are extracted from the HPPMP document (as approved) and the Agreement between the Government concerned and the Executive Committee. Therefore, it is important to verify the accuracy of the reported data and to submit relevant reports on time.

Decision 52/5(f): Country programme implementation data had to be submitted in advance of the last meeting of the year and subsequent meetings as a precondition for the approval and release of funding for projects.
II. PROGRESS REPORT(maximum 10 pages)

II.1Background(one paragraph)

2.Background information relevant to the approval of the HPPMP should be provided. This information must include: the meeting at which the HPPMP was approved, the percentage reduction on HCFC baseline to which the Government concerned has committed itself, and the year of commitment (e.g., 35 per cent by 2020), the total level of funding approved in principle (disaggregated by lead and cooperating implementing agencies, where applicable), and the total level of amount approved in previous tranches (disaggregated by lead and cooperating implementing agencies, where applicable). This information can be obtained from and must be consistent with the decision adopted by the Executive Committee at the meeting at which the HPPMP was approved.

II.2ODS policy/legislative/regulatory and institutional framework

3.This section should address section C of the Format (attached as Annex I to this revised guide). A brief description should be provided on all legislation and/or regulations that were revised/issued relating to HCFCs, including: ban on establishment of new HCFC production lines for controlled use; implementation of licensing and quota for HCFC production and trade; ban on import of HCFC-based equipment; ban on import of HCFCs including HCFC-141b in bulk and/or contained in imported pre-blended polyols (particularly for countries where this was a precondition for funding the conversion of enterprises using imported pre-blended polyols); and other government initiatives, if any. A summary of regulations can be presented in Table 7 of the Format.

II.3HCFC consumption and production

4.This section should address section A of the Format. The levels of HCFC production should be reported from 2010 up until the latest information available prior to the tranche submission. The progress report should provide explanations on any significant increase/decrease of the production level, change of stock level, or other related information. It should also explain any deviations in actual HCFC production reductions for the reporting year from the planned reductions and adjustment of the reduction strategy (if any) for the next year. Table 1 to 3 of the Format should be used to provide quantitative data.

II.4HCFC production phase-out activities(four to six pages plus tables)

5.The activities implemented during the tranche should be clearly described, comparing targets planned versus those accomplished, problems encountered and how they were resolved, and lessons learned. Quantifiable information should be provided to the extent possible.

Decision 47/50: (a) To note the report on options for monitoring and assessing the progress of agencies with regard to multi-year agreements contained in document UNEP/OzL.Pro/ExCom/47/54; (b) to adopt the following options for improving the accuracy of progress reporting on multi-year agreements: (i) to request the Secretariat and the implementing agencies to continue to review the national implementation carried out in the previous year and to provide additional information in annual implementation plan submissions on disbursements and completed activities, including information on when delayed activities funded by an annual tranche were to be completed. There should also continue to be a comparison of what had been planned in the previous annual tranche and what had been achieved. The disbursement information should be provided cumulatively and data concerning actual or planned commitments could also be provided, as appropriate. The information should also specify how the relevant flexibility clause in the agreement was implemented and/or how to allocate unused funds from previous tranches.(ii) to request the Secretariat to continue to monitor annual tranches in the context of documents on implementation delays and balances, noting that those monitoring tools appeared to have encouraged the removal of impediments to completing projects and activities and so resulted in more timely final disbursement of approved funds to Article 5 countries. To make the process more effective, it could further request implementing agencies to include in funding requests for annual tranches the dates of completion of the tasks associated with those annual tranches; (c) to request Implementing Agencies to record phase-out according to the actual and real levels of production achieved in annual tranches of multi-year agreements, while noting that in some cases the phase-out might need further explanation and that there should be consistency in the use of the definition of planned and actual phase-out; (d) that a separate sub-agenda item on delays in the submission of annual tranches and disbursement of funds for tranches and obligations should be included for future meetings; and (e) to request implementing agencies to inform countries of the need to exceed the phase-out indicated in an agreement where necessary to meet the obligations of the Montreal Protocol, as well as those cases where actual production data had resulted in changes to the phase-out indicated in the agreements.

II.4.1 Production quotas and actual production(One to two pages and tables)

6.This section should address section B of the Format. The submission should elaborate on how the quotas were distributed to achieve the overall HCFC production control targets and to meet the needs of domestic consumption and export; any integration or industrial optimisation that had occurred; any change in ownership reported by enterprises; and quantities and types (permanent or temporary) of quota trades among producers. Tables 4 to 6 of the Format should be used to provide quantitative data.

II.4.2Technical assistance activities(One to twopages and tables)

7.This section should address section D of the Format. The progress report on technical assistance (TA) activities should clearly describe the activities conducted to achieve the objective of each TA, status of implementation and progress made measured against the milestones, any problem encountered and causes for delays. For training activities, the number of participants actually trained should be specified in the achievement. Table 8 of the Format can be used to provide a summary of implementation status of TA activities. The column on interim milestones and deliverables should indicate whether the planned interim milestones have been achieved, partially achieved or not achieved. For those TA activities of a research and study nature, a summary of the TA elaborating on the main technical issues addressed, expected outcomes and their relevance to the HCFC production phase-out should be included in the progress report.

II.4.3Other impacts on the environment including on the climate(One to twopages and tables)

8.This section should address section F of the Format. The progress report should include the potential impact on the environment, with emphasis on the climate, associated with the phase-out of HCFC production, taking into account the global-warming potential (GWP) of the substances. Activities to demonstrate the best efforts made to manage HCFC production and associated by-product production in accordance with best practices to minimize associated climate impact should be clearly described (as required by decision 69/28(e)(viii)). Table 12 of the Format can be used to provide quantitative data.

Decision 54/39(g)(v): Cost and benefit information based on the full range of alternatives considered, and associated ODP and other impacts on the environment including on the climate, taking into account globalwarming potential, energy use and other relevant factors.
Decision XIX/6: (9) To encourage Parties to promote the selection of alternatives to HCFCs that minimize environmental impacts, in particular impacts on climate, as well as meeting other health, safety and economic considerations; (11) to agree that the Executive Committee, when developing and applying funding criteria for projects and programmes, and taking into account paragraph 6, give priority to cost-effective projects and programmes which focus on, inter alia: (a) phasing out first those HCFCs with higher ozone-depleting potential, taking into account national circumstances; (b) substitutes and alternatives that minimize other impacts on the environment, including on the climate, taking into account global-warming potential, energy use and other relevant factors; (c) small and medium size enterprises.
Decision 69/28(e)[2]: (viii) [country] agrees to coordinate with its stakeholders and authorities to make best efforts to manage HCFC production and associated by-product production in HCFC plants in accordance with best practices to minimize associated climate impacts; (ix) [country] agrees to optimize the implementation of the HPPMP in order to minimize environmental and climate impacts as much as possible, including by giving priority to HCFC production closure to achieve HCFC reduction targets set forth in decision XIX/6.

II.4.4Lessons learned(one to two pages and tables)

9.In addition to the information from the progress report format, an analysis should be provided on the lessons learned, issues encountered and how these were addressed. It should also include information on activities that are being or will be undertaken to ensure the longterm sustainability of the training programmes and other TA activities. How these activities link with the new activities being proposed in the subsequent tranche of the HPPMP should also be explained.

II.4.5Project management unit (PMU)(one page maximum)

10.This section addresses the roles and responsibilities of key stakeholders involved in the management and implementation of the tranche of the HPPMP including, inter alia, government departments directly involved in the implementation of the tranche of the HPPMP, the Ozone Unit, the lead implementing agency and the cooperating implementing agencies (where applicable), and non-governmental organizations including industrial associations. It should include a description of the activities conducted by the PMU in relation to the expenditures in the detailed financial report. It should also includea brief description of the procedures established to monitor progress in the implementation of all HCFC phaseout activities.

11.Particular emphasis should be placed on the Ozone Unit and the PMU, differentiating the main roles and responsibilities of these stakeholders.

Decision 53/37(e): Institutions and capacities in Article 5 countries developed through Multilateral Fund assistance for the phase-out of ODS other than HCFCs should be used to economize the phase-out of HCFCs, as appropriate.
Decision 54/39(i): HPMPs should address: (i) the use of institutional arrangements mentioned in decision 53/37(e) and (f); (ii) the roles and responsibilities of associations of refrigeration technicians and other industry associations and how they could contribute to HCFC phase-out.

II.5Financial report(one page and tables)

12.This section should address section E of the Format. A financial report clearly summarizing in tabular form the approved funding, disbursements made, funds committed, as well as the balance available for future activities, during the implementation of the last tranche and for all previously approved tranches must be provided. In cases where funding is transferred from the bilateral and/or implementing agency to a national execution agency, the levels of funds disbursed to HCFC producers and the interest accrued from the funds held by the execution agency should be clearly indicated. The financial disbursement for each TA activity and to HCFC producers for quota reduction/closure contracts should be reported separately. Tables9 to 11 of the Format should be used to provide quantitative data.

13.In accordance with decision 81/46, starting in 2019 the financial report should include a detailed breakdown of the expenditures by the PMU using the format contained in Annex II of the present document.

14.A request for funding a tranche should be submitted only when there is a significant level of implementation of activities initiated with previously approved tranches, and where the rate of disbursement of funding from the previously approved tranche has reached 20 per cent.

Decision 57/15: Bilateral and implementing agencies should not submit for the Committee’s consideration requests for funding of tranches of multi-year agreements with low rates of implementation of activities initiated with previously approved tranches and where the rate of disbursement of funding available from the previously approved tranche was less than 20 per cent, even when the levels of consumption of the ODS under consideration were below the maximum allowable levels under the Montreal Protocol and in the Agreement between the Government concerned and the Executive Committee.
Paragraph 19(b) and (c) of Agreements:(a) The Executive Committee will not provide the funding in accordance with the Funding Approval Schedule unless the Country satisfies the following conditions at least twelve weeks in advance of the applicable Executive Committee meeting set out in the Funding Approval Schedule: (b) The achievement of these targets has been independently verified and the verification report will be submitted at least eight weeks in advance to the Secretariat of the relevant Executive Committee meeting, unless the Executive Committee decides that such verification is not required; (c) The Country has submitted: annual implementation reports in the format in Appendix4-A (“Format of Implementation Reports and Plans”) covering each previous calendar year and confirming that the conditions set out in paragraphs 6 to 12 of this Agreement have been met where applicable; has achieved a significant level of implementation of activities initiated with previously approved tranches; and the rate of disbursement of funding available from the previously approved tranche exceeded 20per cent.
Decision 81/46: (a) To note the information on the draft financial reporting format for annual project management unit (PMU) expenditures for the HCFC phase-out management plan (HPMP) and HCFC production phase-out management plan (HPPMP) for China contained in documentUNEP/OzL.Pro/ExCom/81/29; (b) To request UNDP, in cooperation with the sector lead implementing agencies, to use the financial reporting format for the PMU expenditures contained in Annex X to the report of the 81st meeting in their annual tranche progress reports, starting in 2019; (c) To request the implementing agencies to consider whether there was a need to amend their respective agreements with the Government of China with a view to ensuring that the financial reporting on PMU expenditures was sufficiently detailed to satisfy the requirements of their respective financial reporting to the Executive Committee; and (d) To review the financial reporting format for the annual PMU expenditures at the first Executive Committee meeting of 2020.
III.TRANCHE IMPLEMENTATION PLAN(three pages)

15.A detailed description of the activities to be implemented with regard to regulations, strategy for the reduction of ODS production, distribution of quotas, TA and project monitoring should be included. The overall control targets for the year should be presented in Table 13 of the Format. Quotas issued to enterprises based on the overall production quota for ODS use and the production quota for domestic ODS use for each substance can be provided in Table 13ae.