Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) Thailand HCFC Phase-Out Stage II (P165235) EAST ASIA AND PACIFIC | Thailand | Environment, Natural Resources & the Blue Economy Global Practice | Montreal Protocol | Investment Project Financing | FY 2020 | Seq No: 5 | ARCHIVED on 21-Dec-2021 | ISR48929 | Implementing Agencies: Department of Industrial Works, Kingdom of Thailand Key Dates Key Project Dates Bank Approval Date: 10-Jan-2020 Effectiveness Date: 20-Oct-2020 Planned Mid Term Review Date: 15-Feb-2022 Actual Mid-Term Review Date: Original Closing Date: 31-Dec-2023 Revised Closing Date: 31-Dec-2023 pdoTable Project Development Objective (PDO) Project Development Objective (from Project Appraisal Document) The project development objective is to contribute to reduce HCFC consumption in Thailand, in doing so, specifically contributing to Thailand’s efforts to meet and sustain the 2020 HCFC consumption phase-out obligations of the Montreal Protocol and its Multilateral Fund, as well as the initial requirements of the Kigali Amendment. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Investment in HCFC Consumption Reductions:(Cost $2.55 M) Component 2: Technical Assistance:(Cost $1.97 M) Component 3: Project Management:(Cost $0.31 M) Component 4: Strengthening of the National Ozone Unit:(Cost $1.11 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions 12/21/2021 Page 1 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) Thailand has already achieved the project target of reducing its HCFC consumption (imports) below the limit set in the national HCFC Phase-out Management Plan (HPMP) agreed with the Multilateral Fund for the Implementation of the Montreal Protocol (MLF). Because Thailand had already exceeded the general reduction targets of the Montreal Protocol (35 percent reduction by 2020) before the project was appraised, the project was designed to help achieve the more ambitious targets of the HPMP. Verified HCFC consumption in 2020 was 350.92 ODP tons, below the agreed MLF ceilings for both 2020 (410 ODP tons) and 2023 (355 ODP tons). The import reduction was achieved mainly through policy and quota measures, whereas continuing activities are aimed at supporting conversion from HCFCs to other substances in the spray foam sector as well as training in the residential AC servicing sector to both reduce leakage from existing HCFC-based units and help facilitate their replacement with non- HCFC units. The project also supports activities to phase-out HFCs, which in the past were often used as a replacement for HCFCs because they do not deplete the ozone, but are now included in the Montreal Protocol’s Kigali Amendment because of their high global warming potential (GWP). In anticipation of Thailand ratifying the Kigali Amendment, the project has already financed a demonstration project for conversion from HFCs in commercial refrigeration and is also establishing a licensing and customs system that will enable reporting of HFCs blends (in addition to HCFCs) in the country’s annual report to the Montreal Protocol’s Ozone Secretariat. Evolving business trends in the insulation sector have reduced demand for project support by spray foam businesses. The extent of this trend and implications for project approaches are under assessment. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Low Low Low Macroeconomic Low Low Low Sector Strategies and Policies Low Low Low Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Low Low Low Other -- -- -- Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes To contribute to reducing HCFC consumption in Thailand IN01060011 ►HCFC Consumption (ODP tons) (Number) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 410.00 353.10 350.92 354.70 Date 31-Dec-2018 26-Mar-2021 26-Mar-2021 29-Dec-2023 ODP of each chemical multiplied by total import minus export in MT. The 2020 HCFC import quotas is Comments: 376.18 ODP (ozone depleting potential) tons were issued by DIW, of which the preliminary actual import 12/21/2021 Page 2 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) data of 2020 is only 353.10 ODP tons, still keeping lower than the agreed ceiling with the ExCom at 410 ODP tons by 13.88 percent. The actual consumption level will be confirmed via an independent verification to be conducted during the first half of 2021. Intermediate Results Indicators by Components Component 1: Investment in HCFC Consumption Reductions IN01060013 ►Cumulative HCFC-141b consumption reduction in spray foam sub-sector (ODP ton) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 31.53 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 The project management units (PMUs) officially received one interested foam enterprise submitted an EOI and preparing a proposal. The first subgrant agreement of spray foam sector is expected to be signed in early 2022 and would eliminate annual consumption of almost 15 MT of HCFC-141b, equivalent to 1.48 Comments: ODP tons. After keep reaching out to the industry, at the moment, we have 4out of 5 large enterprises confirmed and another more than 100 small enterprises show interest. The project will assess the implications of the business trend on the planned activities and related targets. IN01060016 ►Cumulative GHG emission reductions from replacement of baseline spray foam blowing agent with low/lower GWP alternative (tCO2 eq per year) (Metric tons/year, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 22,830.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 The GHG reduction that will be achieved by the HCFC replacement subproject in the previous indicator, to be signed in February 2022 (14.844 MT of HCFC-141b), would be 10,752 tons CO2eq. The issues affecting the demand for subgrants in the spray foam sector, and possible changes to project strategies Comments: and activities, would also affect achievement of GHG reductions directly attributable to the project. IN01060020 ►Cumulative GHG emission reductions from replacement of baseline refrigerants with low/lower GWP alternative in commerical refrigeration sector (tCO2eq per year) (Metric tons/year, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7,444.58 7,444.58 12,500.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 This measures the GHG reduction resulting from a demonstration conversion subproject at a commercial refrigeration company, Patana Intercool, that started in late 2019 and was financed retroactively by the HCFC-2 project grant signed in August 2020. Conversion of the production line was completed in early 2021. Although the GHG reduction achieved through the conversion is lower than the target, this is because the estimate of the company’s baseline consumption of HFC-134a at appraisal was too high. The actual consumption was determined to be 5.2 metric tons, which at a global warming potential (GWP) of Comments: 1,430 per ton of HFC-134a, is equivalent to 7,444 tons of CO2. Although the specific reduction for the demonstration project was lower that expected, the demonstration value for further replacement in the sector was not diminished. IN01060024 ►Cumulative number of enterprised covered by the signed sub-grant agreements (Number, Custom) 12/21/2021 Page 3 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 1.00 40.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 28-Dec-2023 The target includes 1 subgrant agreement (SGA) for a refrigeration conversion demonstration subprojct and 39 SGAs with the spray foam enterprises. The refrigeration subproject was completed in early 2021 but is financed retroactively, the subgrant agreement was signed on June 29, 2021. Development of the pipeline of spray foam subprojects is in progress, with the first SGA with P.U. Foam Insulation and Trading Comments: is expected to be signed in early 2022. Currently, the PMU receives the 4 out of 5 large enterprises confirmed, and another more than 100 small enterprises show interest. The project will assess the implications of the business trend on the planned activities and related targets during the MTR. Component 2: Technical Assistance IN01060012 ►Cumulative HCFC-22 consumption reduction in air conditioning servicing sector (ODP ton) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Progress on this indicator is dependent on equipping of training centers and training of technicians, both of which have been delayed, in large part due to Covid-related restrictions and resulting procurement Comments: delays. The necessary equipment is now expected to be acquired and in place by mid- to late 2022, with the main training program starting soon thereafter. IN01060015 ►Number of training centers provided with training equipment to support service technician training (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 12.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 The twelve training centers will each receive six sets of training equipment. Six of the proposed centers are administered by the Department of Skills Development (DSD) in Ayudhaya, Udonthani, Lamphoon, Petchaboon, Kanchanaburi, and Satoon provinces; another six are operated by the Office of Vocational Comments: Education Commission (OVEC) in Pichit, Nan, Konkaen, Yasothorn, Nakhonsrithammarat, and Bangkok. As mentioned, procurement of the equipment has been delayed and is now expected to be in place by mid-to-late 2022. IN01060019 ►Cumulative number of service technicians trained on the proper installation and maintenance of HFC-32 residential A/C and on minimizing leakage of HCFC-22 from existing HCFC-22 based residential A/C (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5,500.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Cumulative number of service technicians that are offered training from Department of Skills Development (DSD) and vocational technical schools (supported by this project) on the proper installation and maintenance of HFC-32 residential air-conditioners to enhance market penetration of this Comments: refrigerant technology, and training to minimize leakage of HCFC-22 from existing HCFC-22 based residential A/C equipment. IN01060023 ►Regulation and/or standard supporting HCFC phase-out in spray-foam sub-sector (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/21/2021 Page 4 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) Value No No No Yes Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Effective dates of regulatory instrument on HCFC-141b consumption controls in spray foam that is to Comments: occur in the target year, namely the last year of the project. IN01060026 ►Mechanism in place to collect data on the number of female service technicians trained by the project (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 End-of-training surveys will enable the tracking of the estimated level of female service technicians employed in the sector. Comments: Component 3: Project Management IN01060018 ►Biennial Work Programs for Submission to the ExCom (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Work program and implementation reports on all activities financed by the Project. The work program will follow the format adopted by the Executive Committee, which will be submitted once the country would Comments: like the next funding, however this is not due until the Country have the next funding request. IN01060022 ►Verification Reports on Annual HCFC Consumption (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 3.00 5.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Cumulative number of verification reports prepared during 2018 to 2022. DIW has already recruited the consultant firm to be responsible for verification of HCFC consumption for 2018, 2019 and 2020 up to the Comments: project’s closing year 2023 in February 2021. The consultant already submitted the verification report of the 2018-19-20 consumption. Component 4: Strengthening of the National Ozone Unit (NOU) IN01060014 ►Timely issuance and enforcement of annual HCFC import quotas (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Yes Yes Yes Yes Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Component 4 is to support operations of the NOU. This indicator tracks timely issuance and enforcement of the annual HCFC import quotas as a measure of Thailand's compliance with the consumption targets of the Montreal Protocol. Through the support provided by the previous projects, Thailand has always Comments: been able to achieve this target throughout the project implementation period and this is again the case for 2020 - maximum quota was issued and is consistent with the agreed target with the Multilateral Fund. The baseline value is, therefore set as “Yes” as is the actual value. This proposed project is 12/21/2021 Page 5 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) expected to maintain the Government’s capacity to meet this critical requirement of the Montreal Protocol. IN01060017 ►Timely Article 7 data submission (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Yes Yes Yes Yes Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 29-Dec-2023 Component 4 is to support operations of the NOU. Timely Article 7 Data submission (on imports, exports, and production of HCFCs) is one of the key obligations of the Parties to the Montreal Protocol. The reports are due no later than September 30 for the previous calendar year. Through the support provided by the previous projects, Thailand has always been able to submit the reports on time, and did so again for 2019 Comments: (submitted by September 2020) and 2020 (submitted by September 2021). The baseline value is, therefore set as “Yes”. This proposed project is expected to maintain the Government’s capacity to meet this critical requirement of the Montreal Protocol. IN01060021 ►Licensing and Customs system for tracking HFCs put in place (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 01-Dec-2023 Policy or regulation that adjusts the licensing and customs system to enable robust tracking of HFC imports and exports. The policy / regulation is targeted to be in place by early 2022. This will allow Thailand to include HFCs in its annual Article 7 reports once it has ratified the Kigali Amendment, which Comments: added phase-out of HFCs to the Montreal Protocol. IN01060025 ►Beneficiaries reporting satisfaction with key aspects of the Ozone Day public awareness activities (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 52.00 50.00 Date 31-Dec-2018 26-Mar-2021 29-Oct-2021 25-Dec-2023 Beneficiaries reporting satisfaction with key aspects of the Ozone Day public awareness activities” is a new indicator for conforming with the citizen engagement requirement. Currently, most of the public is not aware of the potential longer term cost and environmental benefits that they will enjoy through purchasing Comments: appliances with new technologies or enhanced maintenance services that the project will introduce. The Government of Thailand agrees that it will try to convey the message to the public and gain at least 50% of its approval during targeted awareness campaigns and workshops. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed 12/21/2021 Page 6 of 7 Public Disclosure Copy The World Bank Implementation Status & Results Report Thailand HCFC Phase-Out Stage II (P165235) P165235 TF-B1751 Effective USD 5.08 5.08 0.00 0.67 4.42 13% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P165235 TF-B1751 Effective 10-Jan-2020 28-Aug-2020 20-Oct-2020 31-Dec-2023 31-Dec-2023 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/21/2021 Page 7 of 7