Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004626 IMPLEMENTATION COMPLETION AND RESULTS REPORT TF014897 ON A GRANT IN THE AMOUNT OF US$ 1.9 MILLION TO THE The Argentine Republic FOR THE Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) December 28, 2018 Environment & Natural Resources Global Practice Latin America And Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2018) Currency Unit = Argentine Peso 1 ARS = US$0.04 1 US$ = ARS 28.06 FISCAL YEAR July 1 - June 30 Regional Vice President: Jorge Familiar Country Director: Jesko S. Hentschel Senior Global Practice Director: Karin Erika Kemper Practice Manager: Valerie Hickey Task Team Leader(s): Tuuli Johanna Bernardini ICR Main Contributor: Anna Gueorguieva ABBREVIATIONS AND ACRONYMS ADM Accountability and Decision Making AF Additional Financing AR Argentina CE Cost Efficiency CFC Chlorofluorocarbons CO2e CO2 equivalent (in Global Warming Potential) DO Development Objective EE Energy Efficiency ENPV Economic Net Present Value EIRR Economic Internal Rate of Return ESMF Environmental and Social Management Framework ExCom Executive Committee of the MLF FIASA Frio Industrias Argentinas S.A. FSP Foam Sector Plan GA Grant Agreement GoA Government of Argentina GSAyDS Government Secretariat of Environment of Sustainable Development “Secretaría de Gobierno de Ambiente y Desarrollo Sustentable de la Nación” GWP Global Warming Potential HC Hydrocarbon (also referred to as cyclopentane or c-pentane) HCFCs Hydrochlorofluorocarbons HFCs Hydrofluorocarbons HPMP HCFC Phase-out Management Plan IA Implementing Agency ICC Incremental Capital Cost IOC Incremental Operating Cost ICR Implementation Completion and Results ISR Implementation Status and Results IP Implementation Progress M&E Monitoring and Evaluation MeBr Methyl Bromide MoI Ministry of Industry, previous name of the current Min of Production and Labor MIS Management Information System MLF The Multilateral Fund for the Implementation of the Montreal Protocol MT Million Tons MTR Mid-Term Review MoPL Ministry of Production and Labor MOP Meeting of the Parties MP Montreal Protocol on Substances that Deplete the Ozone Layer NCHPP National CFC and Halons Phase-out Plan ODS Ozone-Depleting Substances ODP Ozone-Depleting Potential OM Operational Manual OPROZ National Ozone Unit “Oficina del Programa Ozono” PCU Project Coordination Unit (UEPRO in Spanish) PDO Project Development Objective PBP Pre-Blended Polyol PRODIS Sustainable Industrial Development Loan (P110612) PU Polyurethane RAC Refrigeration and Air-Conditioning RF Retroactive Financing SMEs Small and Medium-size Enterprises TA Technical Assistance TF Trust Fund UNIDO United Nations Industrial Development Organization UNFCC United Nations Framework Convention on Climate Change UNEP United Nations Environmental Program TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................8 II. OUTCOME .................................................................................................................... 10 A. RELEVANCE OF PDOs ............................................................................................................10 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................10 C. EFFICIENCY ...........................................................................................................................12 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................12 E. OTHER OUTCOMES AND IMPACTS (IF ANY)............................................................................13 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 14 A. KEY FACTORS DURING PREPARATION ...................................................................................14 B. KEY FACTORS DURING IMPLEMENTATION .............................................................................14 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 15 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................15 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................16 C. BANK PERFORMANCE ...........................................................................................................17 V. LESSONS AND RECOMMENDATIONS ............................................................................. 20 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 21 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 27 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 29 ANNEX 4: THEORY OF CHANGE FOR PHASE I AND II HCFC PHASE-OUT IN ARGENTINA .......... 30 ANNEX 5. EFFICIENCY ANALYSIS ........................................................................................... 31 ANNEX 6. SUMMARY OF THE BORROWER ICR ...................................................................... 34 ANNEX 7. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 44 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name Montreal Protocol Hydrochlorofluorocarbons (HCFC) P129397 Phase-out Project Country Financing Instrument Argentina Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency The Argentine Republic Ministry of Production Project Development Objective (PDO) Original PDO The project development objective is to support the Recipient in phasing out controlled ozone-depleting substances in accordance with the Recipient's obligations under the Montreal Protocol. Page 1 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 1,914,612 1,106,174 1,106,155 TF-14897 Total 1,914,612 1,106,174 1,106,155 Non-World Bank Financing Borrower 0 0 0 Total 0 0 0 Total Project Cost 1,914,612 1,106,174 1,106,155 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 30-Jul-2013 30-Jan-2015 16-Aug-2016 30-Apr-2021 30-Jun-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 28-Jun-2018 1.11 Change in Components and Cost Change in Loan Closing Date(s) Cancellation of Financing Reallocation between Disbursement Categories Change in Institutional Arrangements Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial Page 2 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 15-Dec-2013 Satisfactory Satisfactory 0 Moderately 02 05-Jul-2014 Moderately Satisfactory 0 Unsatisfactory Moderately Moderately 03 28-Jan-2015 0 Unsatisfactory Unsatisfactory 04 12-Aug-2015 Moderately Satisfactory Moderately Satisfactory 0 05 01-Mar-2016 Moderately Satisfactory Moderately Satisfactory .74 06 08-Oct-2016 Satisfactory Satisfactory 1.08 07 12-Jun-2017 Satisfactory Moderately Satisfactory 1.08 Moderately 08 01-Feb-2018 Satisfactory 1.08 Unsatisfactory Moderately 09 26-Oct-2018 Satisfactory 1.11 Unsatisfactory SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 5 Central Government (Central Agencies) 5 Industry, Trade and Services 95 Other Industry, Trade and Services 95 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 3 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Environment and Natural Resource Management 99 Environmental Health and Pollution Management 99 Air quality management 33 Water Pollution 33 Soil Pollution 33 ADM STAFF Role At Approval At ICR Vice President: Hasan A. Tuluy Jorge Familiar Country Director: Penelope J. Brook Jesko S. Hentschel Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Karin Erika Kemper Practice Manager/Manager: Emilia Battaglini Valerie Hickey Project Team Leader: Tuuli Johanna Bernardini Tuuli Johanna Bernardini ICR Co Author: Anna Gueorguieva Page 4 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. The Montreal Protocol (MP) is a multilateral environmental agreement that establishes time-bound targets to reduce the production and consumption of ozone-depleting substances (ODS) including chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), among others. Decision XIX/6 on accelerating the freeze and phase-out of production and consumption of HCFCs also encouraged the selection of alternative substances that not only have lower ozone depleting potential (ODP), but also low or zero global warming potential (GWP) to help minimize climate impacts. To achieve this, eligible Article 5 countries (developing countries) prepared HCFC Phase-out Management Plans (HPMPs) and established consumption baselines with the support of Implementing Agencies (IA) of the Multilateral Fund for the Implementation of the Montreal Protocol (MLF) 1. 2. The Government of Argentina (GoA) has had an excellent track record of complying with the MP. It began to enact regulations and implement policies to control ODS in accordance with its MP obligations in early 1990s, including restricting the production, use, trade, import and export of ozone depleting chemicals in line with the MP, and imposing a ban on CFCs in aerosols, except for use in respiratory medicine and electronic applications. In 2004, a national register of ODS importers and exporters along with the licensing system was established and started implementation by the National Ozone Unit OPROZ. The institutional arrangements in Argentina for regulating ozone depletion include various institutions (see Table 1) and are more complex than compared with other countries that concentrate ozone work in one line agency, typically that of environment. In Argentina, the HPMP implementation has been mainly divided between (i) the United Nations Industrial Development Organization (UNIDO) as the lead IA that collaborates with the Government Secretariat of Environment and Sustainable Development (GSAyDS) and (ii) the World Bank (the Bank) as a Cooperating IA with the Ministry of Production and Labor (MoPL) as the Executive Agency in Bank terms. The project was designed to cover the MoPL/Bank part of both Phase I and II of the Argentine HPMP, yet initially it included funding only for Phase I. Table 1. Institutional Arrangements for Ozone Management in Argentina Agency/History 2 Acronym Key Responsibilities/HPMP Work National Ozone Unit OPROZ Overall coordination including the agencies presented at the left side: Government Secretariat of Environment and GSAyDS Licensing, servicing, training and awareness raising Sustainable Development Completed preparation of air-conditioning (AC) work in 2014 to meet (Ministry in 2016-2017) MP obligations under HPMP Phase I Ministry of Production and Labor MoPL Conversion of industrial sectors (Ministry of Industry, MoI up to 2015) Hosts the Project Coordination Unit (PCU) of the Bank HCFC phase-out in the foam sector Government Secretariat of Agro-Industry Addresses MeBR Ministry of Foreign Affairs and Worship MoFW Leads international MP relations 1 The four MLF Implementing Agencies are the World Bank, United Nations Environment Programme (UNEP), United Nations Development Programme (UNDP), and United Nations Industrial Development Organisation (UNIDO). 2 The ICR applies the current names of the involved agencies that have had varied names along the HPMP implementation. Page 5 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) 3. The World Bank has been supporting the ODS phase-out in developing countries contributing to nearly 70 percent of the total ODP phase-out under the MLF. The Bank has been involved in MP work e.g. in Argentina, China, Indonesia, Jordan, Malaysia, the Philippines, Thailand, and Vietnam, among others. From 1991 through 2013, the MLF approved about US$1.14 billion in grants for implementation by the Bank, supporting more than 780 investments and technical assistance (TA) activities. 3 This has generated a phase-out of more than 330,000 ODP tons (as of end of 2017), avoiding an estimated 2 billion tons of CO2e (as of end of 2017). 4. The Bank and GoA were finalizing a 17-year-long successful partnership on CFC phase-out when the project was prepared. In mid-2011 the Bank accepted a GoA request to assist Argentina in the preparation of an HCFC phase- out project in the foam sector as a continuation of AR Reduction of Ozone Depleting Substances Project (Montreal Protocol) (P005920) focused on CFC phase-out. The MP baseline was agreed upon by the MLF Executive Committee (ExCom) and the GoA for establishing HCFC phase-out targets for 2013 (freeze at baseline level) and 2015 (10 percent below the baseline), calculating the 400.7 ODP tons average for 2009-2010 consumption of bulk HCFCs (see Table 2). Table 2. Estimated MP Obligations for HCFCs Phase-out in Argentina Allowed Level of Consumption of Annex C Substances under Montreal HCFC Consumption Limit Protocol Baseline (2009-2010 average) 400.7 2013–Freeze at the baseline level 400.7 2015–90% of the baseline 360.63 2020–65% of the baseline 260.46 2025–32.5% of the baseline 130.23 2030–2.5% of the baseline 10.02 2040–No consumption 0 Theory of Change (Results Chain) 5. The HCFC phase-out project is one of a series of projects that comprises Argentina’s long-term MP compliance strategy, which aligns with the overall MP approach for achieving the long-term global objective of protecting Earth’s ozone layer: a staged process in which initial projects targeted the most widespread and highest impact substances that could most readily and efficiently be phased out (such as CFCs and halons), with subsequent projects progressively phasing out less prevalent, lower-impact, or lower-priority substances (such as HCFCs, HFCs, and other substances). The project’s theory of change is presented graphically in Annex 4. Project Development Objectives (PDOs) 6. The Project Development Objective (PDO) and Global Environmental Objective is “to support the Recipient in phasing out controlled ozone-depleting substances in accordance with the Recipient's obligations under the Montreal Protocol.” 3The ExCom and the World Bank entered into an agreement effective on July 9, 1991, pursuant to which the ExCom agreed to provide funds into the Ozone Trust Fund to be administered by the World Bank as Trustee. Page 6 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Key Expected Outcomes and Outcome Indicators 7. The PDO level results indicators are: 1. Initial foam sector HCFC consumption reduction 2. Reduce CO2e emissions Components 8. The project focused on HCFC phase-out in the foam sector in two phases: 1) a 10 percent reduction in HCFC consumption over the period 2013-2015 (Component 1-4) and 2) a further reduction of 25 percent by 2020 (Component 4-5). The Phase I components were approved by the MLF Executive Committee (ExCom) at the time of appraisal, while Component 5 on the Foam Sector Plan (FSP) was deferred until preparation was authorized to begin by the ExCom in line with initiation of HPMP Phase II. The project included the following components: Component 1: HCFC Phase-out at Mabe Argentina S.A. (Approval: $.84m, Actual $.84m) 9. Component 1 provided financing to phase-out 167.8 metric tons (18.5 ODP tons) of consumption of HCFC-141b in the polyurethane rigid insulation foam production of domestic refrigerators at the Mabe Argentina S.A., the largest refrigeration appliance manufacturer in the country. The subproject included, inter alia: the installation of hydrocarbon (HC) storage and blending equipment; replacement and/or retrofitting of foaming equipment; installation of a safety control and gas monitoring system; polyurethane system development and qualification, including the corresponding trials, training and refrigerators testing, and a comprehensive safety audit. Component 2: CFC Replacement in Chillers (Approval: $.95m, Actual $.14m) 10. Component 2 was to support the replacement of at least 20 CFC chillers 4 in private enterprises and was designed to provide TA in diffusion, monitoring, and reporting on the replacement program of CFC chillers and energy efficiency (EE) gains. It continued a CFC replacement pilot included in the predecessor CFC project (P005920) that was still on-going during the preparation of the HCFC project. Due to global CFC phase-out achieved under the MP by 2010, CFC chillers were no longer manufactured or imported, but many chillers using CFCs remained functioning around the world and in Argentina. Component 2 addressed remnant CFC use for servicing of chillers and was not a part of the Argentine HPMP Phase I. Rather, a total of US$1M from the MLF-funded Global Chiller Replacement Program was approved by the MLF for implementation in Argentina. Out of the same, US$900,000 was assigned to provide 20 percent subsidies for purchase of new and cleaner chiller equipment; US$50,000 for related TA; and US$50,000 for overall project management during Phase I. Elimination of the residual use of CFCs in chillers in Argentina improves EE and reduces GHG emissions in the building sector. Its inclusion in the project allowed the project to reach a minimum size for the Bank to continue MP collaboration in Argentina. Component 3: Technical Assistance: Monitoring and Compliance Reporting on HCFC-22 Production Phase-out (Approval $.07m, Actual $.07m) 4Large water-cooled chillers are the "engines" of the air-conditioning systems for almost all large buildings. Prior to 1993, most chillers used CFC-11 and CFC-12, which since was banned because their breakdown products attack the ozone layer. Page 7 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) 11. Component 3 established a monitoring system to address national HCFC-22 production, import quotas, and stockpiles at annual level and upgraded the Monitoring Information System (MIS) housed with the GSAyDS. Frio Industrias Argentinas S. A. (FIASA) was and remains the only ODS producer in Argentina. Until 2007, the enterprise produced both CFCs and HCFC-22. CFC production was phased out under the Bank CFC operation, but the production of HCFC-22 continues. Given the inter-relationship between production and consumption of HCFCs and the implications that it has for Argentina's MP compliance, the monitoring system for national HCFC production was warranted and implemented to upgrade the MIS. This was done by establishing a monitoring system within the MIS, housed with the MoPL for verifying key data on HCFC production. Component 3 funded regular verification visits at FIASA’s production facility and allowed an on-going dialogue on its potential plans on an anticipated phase-out of its HCFC production. Component 4: Project Management (Approval $.05m, Actual $.05m) 12. Provision of financing to the PCU to coordinate and manage the project implementation. The PCU within the MoPL and under the Secretariat of Industry coordinated and managed implementation of the project components and their subprojects in accordance with national regulations, sector specific policies, and as stipulated in the Operational Manual (OM). Taken the GSAyDS received all the MLF resources for institutional strengthening under HPMP Phase I, the project supported the PCU’s operating costs with funding equivalent to 5 percent from Component 2 in line with relevant MLF regulations. The PCU team was primarily funded by national budget. Component 5: Foam Sector Plan for HCFC Phase-out (Approval $5.56m in July 2017, Actual $0m) 13. The Bank and PCU began the FSP and HPMP Phase II preparation during the project mid-term review (MTR) in August 2016 and completed it successfully when the ExCom approved it with funding of US$6.1M in July 2017 ($5.56m for the FSP as the main phase-out project under the Argentine HPMP Phase II). It was designed to target the four major HCFC consumers through individual subprojects, and around 160 small and medium enterprises were eligible for funding through umbrella projects designed with seven polyurethane system houses that provide products and services to foam enterprises. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets The PDO was not revised over the course of the project. Revised PDO Indicators The PDO indicators were not revised over the course of the project. Revised Components Component 2. Change in the subsidy regime of CFC-free chiller equipment 14. During the project MTR in August 2016, the Bank agreed upon changes in the subsidy regime for CFC chiller conversions the PCU had requested for reasons presented under III B. on Key Factors during Implementation. The original 20 percent of the cost of the new chiller equipment was increased to 33 percent, the maximum subsidy allowed under the Global Chiller Project. The maximum subsidy was reserved for energy efficient (EE) converter chillers in line with related incentive programs of the MoPL and to entice more participation by building owners with functioning CFC chillers. Page 8 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) The Bank also agreed that the PCU can proceed to amend the Sub-Grant Agreement of Fundación Favaloro, a recognized health institute in pursuit of public good, to increase the subsidy to 33 percent retroactively as per its written request. 15. Undisbursed Component 2 proceeds were transferred to UNIDO in November 2017, the lead MP Implementing Agency (IA) for Argentina and subsequently cancelled under the project through a Level II restructuring in June 2018. Component 5. Removed and implemented by another agency, UNIDO 16. Component 5 was removed by the June 2018 restructuring and was transferred to UNIDO in November 2017. Other Changes 17. In December 2015, the new GoA administration converted the PCU from a small and rather isolated team of consultants to an integral part of a National Directory of Sustainable Industrial Development within the MoPL. 18. In late 2016, the PCU requested and the Bank agreed with changing the biannual FIASA monitoring visits from work conducted by an individual external consultant to PCU staff. 19. In November 2017, GoA requested a change of the Implementation Agency from the World Bank to UNIDO as the macroeconomic situation and the MoPL standstill in project execution required direct execution by the IA. 20. Level II restructuring in June 2018: Beyond the changes in components, costs (cancellation of remaining financing from Component 2 and removal of Component 5 from the project design) and institutional arrangements (change of the MLF IA from the Bank to UNIDO), the restructuring included a change of the Grant closing date from April 30, 2021 to June 30, 2018, and consequently the implementation schedule and reallocation between disbursement categories. Rationale for Changes and Their Implication on the Original Theory of Change 21. Component 2: The higher subsidy percentage was expected to increase the low demand for the chiller subsidies coupled with the evolving situation with (i) scarcer CFC availability for servicing old CFC chillers and (ii) the 2016 increase in the electricity prices in Argentina that increased chiller owners’ interest in more EE equipment. This approach proved successful under direct execution by UNIDO and has resulted in 9 expressions of interest by December 2018. 22. Component 3: The use of PCU staff to conduct biannual monitoring visits at the FIASA industrial plant strengthened PCU’s capacity and promoted sustainability of the FIASA monitoring while it reduced the cost of the monitoring and decreased the PCU dependency on external consultants. 23. The change of the PCU through the December 2015 change of the GoA administration implied a significant shift in its implementation approach from a mere administrative/supervisory role regarding the beneficiary enterprises at the national level to a more strategic role in the global MP and wider chemicals agenda. The PCU was reorganized to form a part of the new National Directory of Sustainable Industrial Development and started to participate in MP meetings in 2016. It initiated collaboration with UNIDO and started to compare its processes of direct execution to those of the Bank. 24. The change of the Implementing Agency: The change of the IA has not impacted the theory of change as the project has kept its design. Only the mode of implementation has changed from Recipient Executed under Bank Page 9 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) implementation to IA executed under UNIDO. This has facilitated execution in the context of the fiscal and macroeconomic crisis faced by the country as described under the section on Risk to Development Outcomes. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating of PDO relevance: SUBSTANTIAL 25. The project was a primary mechanism for Argentina to achieve both its HCFC phase-out obligations under the MP as well as the phase-out commitments in Argentina’s own regulations. The implied technological changes have contributed to Argentina advancing on its climate change agenda, as expressed in its Nationally Determined Contributions towards the Paris Agreement. The project also contributed to the World Bank Country Partnership Strategy (CPS FY2015- 18) as it addressed reduction of environmental risks; CPS objective number 8. The environmental risks reduced are exposure to ozone depletion and climate change. However, as the Argentine CPS FY2015-18 was strictly limited to poverty reduction, the project was not directly listed in the CPS, and the PDO relevance rating is thus reduced to SUBSTANTIAL. B. ACHIEVEMENT OF PDOs (EFFICACY) Rating of efficacy: SUBSTANTIAL 26. The project achieved its PDO to support Argentina to meet its obligations under the Montreal Protocol. This is reflected in the first PDO indicator of HCFC reduction of 167.8 metric tons (MT) that was fully achieved. The second PDO indicator measures CO2e emissions reduction, which is not a MP obligation in a strict sense but represents MP-pursued climate co-benefits. CO2e emissions reduction was included as a PDO indicator due to Component 2 that had the most funding under the original project design, yet said reduction was not directly covered by the PDO as it is not a part of the MP and Argentina’s obligations. Thus, the second PDO indicator is considered secondary for not contributing to the PDO, but merely reflecting on the climate co-benefits of the operation, taken Decision XIX/6 of the MP Parties asks Parties to take climate impacts into account when phasing out HCFCs. The indicator was achieved at 63 percent and is expected to reach 83 percent if all 9 chillers included in the expressions of interest received by the PCU in December 2018 are implemented. The lower than expected result on the second PDO indicator reflects that Component 2 had lower than expected take-up of the subsidy for CFC chiller conversions by the private sector. The reasons relate to the climactic conditions, low energy prices, restrictive import regulations by the previous GoA administration and macroeconomic situation throughout project implementation period. These project design and implementation issues are reflected in the relevant sections under Quality at Entry and Implementation, M&E Performance and Bank Performance. 27. In rating the efficacy, the focus is placed on the achievement of the PDO that includes timely and successful preparation of the HPMP Phase II to meet the Argentine MP targets. The second PDO indicator has only indirect relation to the PDO in terms of Component 1, and no relation to it in terms of Component 2, which presented complementary action to the Argentine MP obligations. The first PDO indicator was achieved fully, and the second but not directly relevant PDO indicator at 63 percent and is expected to reach 83 percent. A split rating should have been applied because of the Page 10 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) cancellation and reduction in scope of the project. Given that this happened close to completion of the project, the split rating would not have yielded different results. Therefore, the efficacy is rated as SUBSTANTIAL. Assessment of Achievement of Each Objective/Outcome Primary Outcome: Initial foam sector HCFC consumption reduction by 167.8 metric tons 28. The first PDO indicator is the core indicator to measure the country compliance with its MP obligations under HPMP Phase I. The verified national HCFC consumption for up to 2017 (see Figure 2 in Annex 1) shows that Argentina is in compliance with the MP. By 2017, consumption was 32 percent below the baseline, exceeding the MP target. As described under the Theory of Change, the activities and related outputs most directly linked to achievement of this objective are activities under Component 1 at the Mabe enterprise. These are measured by intermediate indicator “HCFC- 141b consumption phase-out at Mabe Argentina S.A.” that was fully achieved. TA/capacity building activities 29. The PDO indicator is supported by an intermediate indicator “Compliance with the monitoring and control protocol on HCFC-22 production”, which was also fully met. This reflects activities under Component 3 that covered verified monitoring of the national HCFC-22 production from January 2015 to June 2018 through a report on retroactive monitoring of 2015, four quarterly monitoring reports covering 2016, and three semester reports from January 2017 to June 2018. FIASA complied with its respective HCFC-22 production quotas during the whole of the monitoring period. Secondary Outcome: Reduce CO2 emissions by 216,655 metric tons per year 30. The second PDO indicator does not measure a direct MP obligation of Argentina, yet in terms of Component 1 it relates with Decision XIX/6 of the MP Parties that asks Parties to take climate impacts into account when phasing out HCFCs. The indicator measures CO2e emissions avoided both through Component 1 on HCFC phase out (56 percent) and Component 2 on the subsidized CFC chiller replacements. The project activities and outputs directly related to this objective are HCFC phase out at Mabe and the chiller conversions. The low take-up of the chiller conversion subsidy was due to several macro-level factors, including the low electricity costs in Argentina. In mid-November 2018, the PCU and UNIDO launched a call for proposals for the Component 2 subsidy funding transferred to UNIDO in November 2017. The PCU is currently reviewing the nine proposals received, all for high EE converter chillers. 31. A total of 135,905 metric tons of C02 per year were avoided due to the project. Target for this PDO indicator was achieved at 63 percent. The associated direct climate benefit from conversion at Mabe S.A. represents 121,655 tCO2e per year after the respective HCFC phase-out completion that took place in April 2015. The remaining target relates with the planned chiller conversions to eliminate residual CFC consumption used as refrigerant in the servicing of older chillers. The project target was to subsidize the conversion of an estimated 20 chillers to CFC-free, more EE models, resulting in an associated reduction of app. 20 t of CFC-11. This would have represented 95,000 tCO2e per year upon completion only based on GWP of the refrigerant; without calculating associated EE gains. Just three CFC chillers were converted under the project due to various earlier described implementation challenges. The result reflects completion of two Sub-Grant Agreements on conversion of two CFC chillers with capacity of 340 TR each and the second on conversion of a CFC chiller with capacity of 400 TR. The respective tCO2e emission reduction was calculated simply by dividing the initial 95,000 tCO2e reduction target by 20 (the number of the targeted chillers) and multiplied by 3 (the number of converted chillers). Component 2 will be implemented as fully as private sector interest allows by the new IA UNIDO. 8 of the 9 new proposed chillers apply a highly energy efficient inverter technology and are titled to the maximum 33 percent subsidy, but EE of Page 11 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) the converted chillers was not included in the methodology of the calculation of the respective PDO indicator. If the 9 additional chillers are converted, the total achievement of CO2e reduction will reach 178,655 metric tons per year, at 83 percent of the target. Justification of Overall Efficacy Rating 32. The Substantial overall efficacy rating is justified by the fact that the project met its PDO as it delivered (i) its expected share to allow Argentina to meet its MP target by 2015 (HPMP Phase I) and (ii) prepared its expected share of the HPMP Phase II successfully and in time to allow Argentina to meet its MP target by 2022. The project met its objective on the first and principal indicator of HCFC reduction and will substantially achieve its target for the secondary indicator of CO2e emissions reduction. C. EFFICIENCY Assessment of Efficiency and Rating Rating of efficiency: SUBSTANTIAL 33. The project efficiency was assessed using cost-effectiveness and cost-benefit analysis and was found to be very cost-effective and have large economic benefits greatly outweighing the costs. First, the cost-effectiveness (CE) method compared the cost of per kg of HCFC phased out (US$/kg HCFC) with the project cost at appraisal, MLF thresholds and international benchmarks and found the project to be very cost-effective. Under the ExCom, CE is defined as the amount of MLF grant per unit weight of HCFC phased out in kg. With an actual total conversion costs of US$838,612, the project phased out 167.8 metric tons of HCFC-141b, resulting in a CE of US$5.0/kg of HCFC-141b under Component 1, which is lower than the average CE of US$6.96/kg for the project at appraisal. The ExCom does not set a standard CE for HCFC conversion, but still some international benchmarks are US$3.81/kg (China), US$6.99/kg (Indonesia), US$7.65/kg (Thailand), and US$6.05/kg (Jordan). As reflected in the table included in Annex 5, the CEs for individual enterprises in this project, including the projected CEs for Phase II, vary considerably even within a single sector in the same country ($6.091/kg to $10.96/kg). Second, given the other benefits of the project such as CO2e avoided, a cost-benefit analysis, presented in Annex 5, found that the flow of benefits of avoided CO2 far outweigh the cost of the project. In addition, if the efficiency analysis would be able to factor in also the hidden costs and benefits of environmental and social impacts from reduced exposure to ODS depletion and climate risks (for which viable data are missing), the efficiency of this project would be even higher. 34. With very high economic efficiency, despite modest administrative efficiency, the overall efficiency is rated as SUBSTANTIAL. The administrative efficiency is rated as MODEST. The ISRs rated implementation mainly as Moderately Satisfactory (MS) or Moderately Unsatisfactory (MU) as it was marked by recurrent delays both for internal and external factors. Component 2 on CFC chiller conversions suffered the worst implementation delays that strongly correlated with the macroeconomic situation at the national level. Given the high economic returns to this small grant, the overall efficiency is rated as SUBSTANTIAL. D. JUSTIFICATION OF OVERALL OUTCOME RATING Overall outcome rating: MODERATELY SATISFACTORY Page 12 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) 35. The overall outcome rating is based on Substantial relevance, Substantial efficacy, and Substantial efficiency. Due to the moderate shortcomings in the operation’s achievement of its objectives, the overall rating is MODERATELY SATISFACTORY. The project fully achieved its first and principal objective and partially achieved its second, complementary objective through a combination of HCFC phase-out, chiller conversions and TA. The results were measured and verified both in terms of ODS phase-out through which Argentina achieved compliance with its MP obligations, and CO2e emissions reduction as a critical co-benefit. On the other hand, the project remained substantially relevant and had substantial efficiency, which justifies the MS overall outcome rating. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 36. This project was not gender-tagged and gender issues specific to the project were not identified in the PAD. The gender-blind nature of the project was considered justified throughout the project lifetime. Institutional Strengthening 37. This project has been a key instrument for the GoA to more efficiently deliver on its commitments under the MP. The project was designed to secure the maximum funding under MLF rules to support the PCU in successful project execution through Component 2, 3 and 4. The project contributed to more efficient coordination amongst the OPROZ agencies. Component 3 strengthened the national monitoring system of HCFC by upgrading the Monitoring and Information System (MIS) housed with the GSAyDS. The PCU gained access to top-level technical and MP knowledge from the Bank team, including through a globally recognized foam sector consultant contracted by the Bank. 38. PCU’s engagement in the project and in the overall MP agenda strengthened as the project advanced, including the new PCU lead’s first participation in a Meeting of the Parties (MOP) to the MP in October 2016 in Kigali. Thereafter, the PCU participated in each MOP, including in July 2017 when the ExCom approved the Argentine HPMP Phase II. The PCU also assumed responsibility of controlling and verifying FIASA’s HCFC production through its own personnel, in which context the Bank team also conducted its first visit to the FIASA plant in San Luis. The visit served to gain understanding of the company’s perspectives and plans, and FIASA agreed upon providing the information needed to initiate exchange with the MLF ExCom on a potential new MP subproject with FIASA. Importantly, the PCU assumed an active and strong engagement in the preparation of the FSP and HPMP Phase II in general. 39. Argentina strengthened its interinstitutional work on ODS phase-out, which through the MP Kigali Amendment 5 in 2016 gained further importance in climate change mitigation. Regarding overall project management, the project contributed to GoA capacity in financial and procurement management, including disbursements, safeguards requirements, and MP aspects such as policies, financing guidelines, funding eligibility, and verification and reporting requirements. Mobilizing Private Sector Financing 40. Most of the conversion costs on the accompanying civil works were born by the beneficiary enterprises Mabe and the two chiller conversion beneficiaries. Only based on the direct co-financing of the new equipment, the three 5 The Kigali Amendment on the phase-down of HFCs, a powerful greenhouse gas, will enter into force on 1 January 2019, provided that at least twenty countries ratify it; or on the 90th day following the 20th ratification. Page 13 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) beneficiary enterprises provided a total of US$1,190,578 of counterpart funds (121 percent of the respective project funding) to complete their conversions. Poverty Reduction and Shared Prosperity 41. As all successful MP projects, the project contributed to creating enabling conditions that stimulate a transition to a greener economy. The project contributed to the global public goods by reducing environmental risks posed by depletion of the ozone layer and climate variability and change, and thus improved human well-being and social equity. 42. The project strengthened the small- and medium-size enterprises (SMEs) sector to access markets. SMEs face financing, technical, and human resource bottlenecks in terms of changing to cleaner ways of production. The project allowed/the FSP will allow the beneficiary SMEs to realize their potential in generating revenue and jobs. The phase- out investment allowed Mabe and will allow other beneficiaries e.g. to access the European export market, which comes with strong restrictions on ODS. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 43. Availability of funds was a major constraint during preparation. In 2010 GSAyDS, hosting the national ozone focal point and in collaboration with UNIDO, prepared the first and main HCFC phase-out investment project “Phasing out of HCFC in the Room and Unitary Air-Conditioning Equipment Manufacturing Sector” of 53.46 ODP tons and US$8.7M. It was in mid-2013 when the then MoI invited the Bank to support its part of the HPMP Phase I. At that stage, the additional Phase I phase-out target required and MLF funding available for Argentina were already limited. This limited the project’s share of the HPMP Phase I to a minimum. The Bank’s central ozone team facilitated the inclusion of Component 2 that allowed the GoA to subsidize CFC chiller conversions and to increase the overall engagement. 44. The project was overall well designed. The project’s PDO was realistically set. The PDO was at the right level of ambitiousness as without the project, Argentina would have lapsed on its MP obligations. The design was simple with the 3 main components centered on HCFC, CFC and capacity building. The HCFC phase-out was planned in two phases: Component 1 under Phase I for the largest foam sector manufacturer Mabe and Component 5 under Phase II for smaller enterprises. The secondary objective of achieving CO2e savings through conversion of chillers was less realistic due to the macroeconomic situation and individual enterprise demand. The results framework was not well aligned with the PDO as its second indicator on CO2e is not directly related to the PDO, as discussed in the M&E section. The plan for monitoring was also appropriate due to the strong capacity building component. B. KEY FACTORS DURING IMPLEMENTATION 45. The project effectiveness was delayed because of the long process for obtaining the necessary Presidential Decree. The Bank singed the Grant Agreement (GA) on July 30, 2013 and the process of getting the project effective first proceeded promptly thereafter. However, the Minister of Economy changed in late 2013, and in December 2013 the GoA requested the Bank to redirect the GA countersignature request to the new Minister. The Bank signed the revised GA on January 30, 2014, but it then took until December 19, 2014 to get it countersigned. The project became effective on January 30, 2015, just before the maximum allowed effectiveness delay of 18 months. The PCU gave a Page 14 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) close follow-up with the applicable GoA processing steps, supported by the Ministry of Finance, Chief of the Cabinet of Ministers, and the Bank. No specific reason(s) have been identified for the delay, yet it was neither exceptional amongst other similar grants or credit operations in Argentina. The enterprise Mabe was capable and committed enough to proceed with its technological conversion with its own resources, allowing the use of the retroactive financing (RF) that the Bank had included in the project design as a preventive measure in case of effectiveness delay. 46. Component 2 had a low take-up of the subsidy offered to the private sector for CFC chiller conversion because of specific climatic and macroeconomic conditions. Regarding the incomplete results of Component 2 on the CFC chiller conversions, the issue of a low subsidy offered for chiller conversions was particularly challenging as chiller conversions usually imply almost the same amount of investment needed for supporting works as the actual equipment purchase. Consequently, conversion of functioning chillers to new and more EE models with a subsidy of 20 percent of the cost of the new equipment was not a priority investment for enterprises and agencies that own functioning CFC chillers. This situation started to slowly change as CFC availability in its restricted market for servicing old CFC chillers is becoming scarcer and the increase in the price of electricity in Argentina since 2016 has increased chiller owners’ interest in more EE equipment. The Bank MTR mission analyzed Component 2 and identified two major reasons for low take-up at the country level: (i) the climatic conditions in Argentina do not require maximum performance of chillers, and many old CFC chillers still had a useful life of up to 10 years; and (ii) the manifold macroeconomic challenges faced by the country and extremely low energy prices until early 2016 did not favor investments in imported goods that are not essential to enterprises and agencies. 47. Higher level of subsidies was approved to increase take-up. It was to be applied to highly EE converter chillers that were eligible for the maximum ExCom allowed subsidy of 33 percent of the price of the new equipment. This was in line with other on-going MoPL programs to promote EE, and the revised subsidy offered PCU an opportunity to reactivate its earlier communication channels towards CFC chiller owners. Further, in line with the GoA’s emphasis on strengthened transparency of public functions, the MoPL put emphasis on establishing an internal resolution for operating Component 2. This was a positive development, yet administrative challenges related with the MoPL ability to execute the funds delayed the approval of the resolution until early November 2018. The launch of the revised subsidy program yielded 5 expressions of interest for a total of 9 chiller conversions in December 2018. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 48. The project results framework was simple and straightforward and deemed appropriate during the project implementation; it was designed to reflect the key project results and outcomes in response to the country obligations contracted to be delivered through the collaboration between the MoPL and Bank. Further, Component 2 provided the main bulk of funding under Phase I and required a respective intermediate result (number of converted CFC chillers) and PDO indicator (excepted reduction in CO2e emissions). However, the PDO was kept focused on the core objective of complying with the national MP obligations. Either the PDO should have been revised, or the CO2 PDO indicator downgraded to intermediary indicator to better align the indicators and PDO statement. Further, the Bank provided periodic progress reports to the MLF Secretariat prior to all the biannual ExCom meetings and as requested. At the national level, the PCU/MoPL contributed to the OPROZ coordination, and starting in 2015, Component 3 provided the Page 15 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) necessary monitoring and control on national HCFC production to feed into the national Management Information System (MIS) established under the GSAyDS. The MIS includes all data concerning ODS imports and uses in Argentina. M&E Implementation 49. The PCU operated and maintained the project-related data without issues. The semi-annual progress reports were to be submitted to the Bank by February 15 and August 15 each year during project implementation. Despite some delays, the reports provided a useful overview of the implementation progress and disbursement status, which informed the PCU and the Bank team of implementation issues and facilitated timely solutions. M&E Utilization 50. The M&E data was utilized at the international, national and project level. The data generated was used at the international level to report on MP compliance and at the national level to plan MP compliance. Component 3 strengthened the MP MIS at the national level through control of and reporting on the HCFC production in Argentina starting in early 2016 and covering 2015 retroactively. Among the last project activities, Component 3 delivered digitalization of the full MP files of the MoPL and GSAyDS and established a related database that the MoPL continues to develop for public use, and particularly for implementing the FSP. At the project level, the M&E system informed the implementation. The combined Bank and ExCom M&E requirements provided the project an operationally functional M&E system during implementation. During the mid-term review, the low results for Component 2 resulted in revision of the implementation plan. Justification of Overall Rating of Quality of M&E Rating of M&E quality: SUBSTANTIAL 51. The design and implementation of the project’s M&E system based on several different reports by and for the GoA, Bank and MLF allowed close monitoring of the project activities despite the simplicity of the project’s results framework. The indicators could have been better linked to Component 5 (the HPMP Phase II). This is illustrated as the status of Component 5 impacted strongly on the PDO ratings across the ISRs, while there was no related indicator. However, this can be considered as a moderate shortcoming in the M&E relevance, taken the M&E system proved functional to provide the necessary information to ensure timely follow-up on project activities and the project being on track to achieve its objectives. The main drawback was in the second PDO indicator that do not relate directly with the PDO formulation. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social Safeguards 52. Overall, as presented in detail in “The Montreal Protocol and the Green Economy” (2012), the project had positive impacts on the global environment as it reduced the use of ozone-depleting HCFCs with a GWP ranging from several hundred to several thousand times that of CO2. While HCFCs have an impact on the global environment, they have no adverse local impact as they are stable and non-toxic or otherwise dangerous chemicals. Hydrocarbon (HC) technology (Cyclopentane) was selected as the HCFC-free blowing agent for Mabe Argentina S.A. to replace HCFC-141b. Cyclopentane is classified as a volatile organic compound (VOC), but its use only results in a GWP of less than 25; about 3 percent of GWP of HCFC-141b. Therefore, there is no significant environmental impact Page 16 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) from Cyclopentane, yet safety requirements associated with its flammability present operational challenges particularly for smaller foam enterprises. Consequently, the project triggered OP/BP 4.01 on Environmental Assessment and was categorized as “B” for partial assessment. For the project Phase I with Mabe as the only foam enterprise to be converted, environmental and social risk was determined Low. No social safeguard was triggered as subproject investments and physical works across Phase I and II of the project were to be limited to equipment replacement in existing assembly lines and/or within the boundaries of existing industrial plants or commercial buildings. 53. An Environmental and Social Management Framework (ESMF) was prepared for the project and Mabe completed the included socio-environmental auto-evaluation and complied with the respective requirements in a satisfactory manner in terms of Argentine regulations and good international industry practice. Afros S.p.A, the provider of the HC equipment to Mabe, secured and verified its compliance with the applicable safety recommendations. Afros S.p.A carried out a safety audit before the start of the foam production using HC and issued a Report for Risks Assessment and Classification of the Zones, through which it certified Mabe’s compliance with "White Book TEC 2014/0138 rev 00" to insure secure operation of all the installations and manipulation of Cyclopentane. Under Component 2, the chiller conversions were executed in compliance with the necessary occupational and community health and safety measures and the applicable waste regulations. Despite satisfactory safeguards implementation under HPMP Phase I, the necessary update of the ESMF for the activation of the FSP added to the fiduciary challenges faced by the preparation of the AF for Phase II within the MoPL. Fiduciary 54. Procurement. Procurement arrangements established during project preparation were maintained during implementation, and the respective performance was found acceptable. The PCU had limited procurement experience implementing Bank-financed projects, but it didn’t imply major concern as the procurement activities carried out by the PCU were of low value and risk. The procurement plan was kept updated during the implementation period and included requests for quotations for the procurement of goods and services and the selection of individual consultants to support the PCU. In this context, the procurement risk was constantly Moderate and the rating for procurement performance Satisfactory. 55. Financial Management (FM). Overall, FM performance of the project ranged from Satisfactory to Moderately Satisfactory. Throughout implementation, the project showed adequate FM arrangements that in general complied with the applicable Bank requirements, and no critical accountability issues were identified. Between September 2016 and April 2018, the project faced an operational challenge with lack of sufficient signatories for the Designated Account due to internal administrative issues within the MoPL. External Auditors qualified a 2016 Statement of Expenditures (SOE) due to an amount justified twice to the Bank, a situation that was regularized by the PCU in 2017. As the project closing date was June 30, 2018, the final audit report covered the period from January 1, 2017 to June 30, 2018, as well as the four-month grace period until October 31, 2018. The Bank received the final audit report in mid-November and concluded its review with no observations. C. BANK PERFORMANCE Quality at Entry 56. The project was a small Ozone Trust Fund grant designed as a follow-up operation of AR CFC project (P005920), a 17-year MP umbrella operation implemented in 1997–2014. When assessing its worth and results, it is Page 17 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) useful to recognize the initial situation where the Bank agreed to continue serving as a second MP IA in Argentina: The Bank engaged with the project in mid-2011 prompted by a strong request by the then MoI for two reasons: 1) the completed preparation of “PRODIS”, a US$40 million Sustainable Industrial Development APL1 (P110612) that was ready to go to the Bank Board just before the international situation culminated in detriment for Argentina’s ability to borrow from the Bank. The negotiated APL entered into a limbo and got later dropped by the Bank but was kept in file by the GoA; and 2) Until the Argentina CPS FY15-18 was approved, grant operations approved by the Regional Vice President were the only operations the Bank was able to prepare for Argentina to maintain dialogue and collaboration. As for political reasons at the global level the FY15-18 CPS was strictly focused on addressing poverty, it did not allow inclusion of the project and less reconsideration of PRODIS. 57. From the onset, the project was designed as an umbrella MP operation that was to cover the HPMP Phase I and II with as little transaction cost between the phases as possible. As typical for MP operations, the Bank as the responsible IA received the preparatory funding and prepared the technical subproject designs with high-level technical consultants. The Bank team was able to fully benefit from the small community of top-quality and dedicated MP experts within the Bank both technically and in terms of MP policies and operational guidelines. At the country level, the project was designed drawing on the lessons learnt from the CFC operation, whereby the Bank gave emphasis on prompting strengthened interinstitutional collaboration between the OPROZ agencies to favor optimal EE, climate and competitiveness co-benefits. Argentina was to comply with its MP obligations while modernizing and cleaning up its industrial sector. 58. A key factor that impacted the original project design was that the GSAyDS and UNIDO had prepared a major HCFC phase-out investment project approved by the ExCom in 2010, while the MoPL/Bank HPMP Phase I activities were approved in April 2013. The GSAyDS/UNIDO HCFC operation covered the most phase-out needs and absorbed the major share of the Phase I funding available for Argentina. Consequently, preparation and implementation of the FSP was postponed to Phase II that was included in the final project design with Component 5 in expectation of later AF. This design proved to secure the MoPL a major share of the HPMP Phase II responsibility, and it allowed the Bank to keep the dialogue open on the respective AF when the GoA administration changed in December 2015. 59. As part of the preparatory work, a phase-out model was developed at the sector level considering the number and size of the HCFC consuming foam enterprises; their capacity to adopt specific alternative technologies at differing levels of maturity; the overall short-term impact on both the ozone layer and the global climate, measured by ODP and GWP respectively; and the degree to which the enterprises’ technological transformation would fit into overall industrial development strategies of the country. 60. Although the preparation time and the effectiveness period appear lengthy, the project was approved in time to align its activities with the global MP timeline for accelerated and progressive sequencing of HCFC phase-out. Inclusion of retroactive financing in the project design proved critical for the timely delivery of the Mabe phase-out before the project got the grant funding operational. Similarly, timely preparation of Phase II faced challenges along the change of the GoA administration in 2015, and the respective commitment between the GoA and the Bank during original project design proved critical for its timely preparation at the end. Quality of Supervision 61. For the duration of the project implementation, the Bank team provided the PCU with timely, consistent and the useful ODS policy and technical advice. The Bank carried out six formal supervision missions that were undertaken annually and were complemented with technical exchange by email in consultation with the Bank MP specialists and Page 18 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) technical visits when the DC-based TTL visited Argentina for other work. Overall, timely communication was maintained between the missions by audio/video conferences and email. The Bank ISRs were sometimes belated but recorded full and up to excessive details on the project status. In mid-2016, the TTL changed location to the Buenos Aires country office at an opportune moment just before the MTR mission and launching of the Phase II preparation. At the same time, the PCU lead changed and the sector dialogue with the MoPL broadened as the it requested the Bank to reconsider PRODIS to expand work on sustainable industrial development, a new priority area within the ministry. Closer client relation allowed the Bank to better understand the country context and on-ground situation and facilitated settlement of implementation issues. 62. The Bank was also able to provide OPROZ with high-level technical guidance and operational support. The Bank required each of its missions to include a coordination meeting with all the OPROZ agencies that participated for mutual update and information exchange. GSAyDS and the Ministry of Foreign Affairs and Worship consulted the Bank MP experts on new areas of work within the MP agenda, e.g. the HFC phase-down addressed under the Kigali Amendment. The exchange with the PCU became richer as it started to participate in the MP Meetings of the Parties and the Bank-organized annual Climate-Ozone Operational Linkages (CO3OL) workshops in Washington, DC. The latter aim at updating the Bank MP client countries in the MP policies and related technological advances and innovations to prompt the countries to harness their MLF and other related funding for maximum climate-ozone co-benefits. 63. Due to the macroeconomic situation and the need for direct execution, the Implementing Agency for the project was changed to UNIDO in November 2017. The PCU needed the Bank to execute the funds directly. However, direct execution to implement MP projects is not possible as it would not comply with the ExCom and Bank agreement on the Ozone Trust Fund administered by the Bank as Trustee. As per the ExCom Decision 80/31 in November 2017, the ExCom approved the GoA request to change the IA. Thereafter, the Bank supported the PCU to optimize the implementation of the remnant Component 3 funding. The transition arrangements were carefully handled by the Bank and the collaboration continued to restructure and complete the Phase I execution. 64. The change of the IA was necessary due to the Argentine macroeconomic crisis that has imposed sever restrictions in public spending even in case of international grants. UNIDO executes the MLF funds without participation of the Ministry of Finance and does not impact or require a national budget line. Implementation of the HPMP Phase II by UNIDO has proved to be important for satisfactory compliance with the national MP obligations while promoting modernization and increased competitiveness of the affected industries. Justification of Overall Rating of Bank Performance 65. The Bank’s overall performance is rated MODERATELY SATISFACTORY. The Bank gave a considerable effort first to prepare a viable operation, carrying out careful analysis of HCFC consumption in the foam sector with due consideration with the differing situation of the affected enterprises, and then provided dedicated, adaptive and effective implementation support to the PCU during project implementation. Considering the small size of the operation and the high transaction cost of similar trust fund operations that need to comply with the donor, Bank and national set of rules and administrative requirements, the Bank showed strong commitment with the project. It provided value for MoPL and OPROZ through its small but strong MP team while serving the GoA as a Cooperative MP IA in benefit of the global public goods and cleaner and more EE and competitive industrial development. Still, many lessons were learned to improve similar work, including the risks assumed with Component 5 during preparation. Page 19 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) V. LESSONS AND RECOMMENDATIONS 66. A sector-plan approach provides a clear and effective strategy for achieving full ODS phase-out rather than an enterprise-level approach. The project was based on an overall sector evaluation rather than on an enterprise-level basis. An individual enterprise approach would not give a clear picture on how the country could completely phase out the remaining ODS consumption. The sector plan approach developed under the project caused concerns as it needed to embrace up to the tiniest foam enterprise, but it provided the necessary overall picture and helped to determine the appropriate strategy on how to address the remaining consumption with a differentiated approach to major and SMEs. Further, as the principal alternative technology for ODS-free foam production based on HFOs remains subject to development and necessary scale-up by few companies at global level, addressing foam production at sector level facilitates the related dialogue the GoA within the wider MP community needs to conduct with the HFO providers. 67. The use of retroactive financing (RF) arrangements as part of a project design can prove critical to achieve timely results and resolve effectiveness delay. The main HCFC phase-out under Component 1 was carried out by one firm, Mabe. Its performance was exemplary throughout the project cycle as it committed to proactive action to safeguard the agreed-upon schedule for its phase-out for the Republic of Argentina to comply with its MP obligations by 2015. Mabe’s up-front investment with own resources was reimbursed through RF. This lesson can be applied to other projects also as RF can facilitate resolving of bureaucratic delays e.g. regarding effectiveness delay. 68. The financial analysis of subsidies aimed at cleaning industries should be done from the targeted enterprises’ view point. The chiller subsidy component achieved its goal only partially due to various external factors that lowered demand by the private sector. This implied the targets were not realistically set, while at the same time the country context constrained the efficacy of Component 2 where replacing a functioning CFC chiller does not result a priority investment even with the maximum donor-allowed subsidy. In similar cases and where more funding is at stake, more emphasis needs to focus on analyzing and resolving demand issues e.g. through complimentary action by other initiatives and developing fuller financial models of the conversion at the targeted enterprises. 69. Promotion of project teams that are integral parts of line ministries rather than separate units improves the Bank’s ability to add value and institutional strengthening. The Bank can use trust fund operations as means to maintain and further develop sector dialogue and provide TA in a country, but it is crucial that such work contributes to existing government structures instead of PCUs that depend on external financing. Small grant operations can serve as bridges when loan operations are prepared and put on hold. Identifying strong champions within the government and developing transparent working relation with them can bring about significant project achievements. The project implementation received a large boost not only when the PCU gained more prominence within the GoA, but also when the new Project Coordinator brought in a more proactive and international approach. Encouraging active and transparent client engagement facilitates resolving of issues and identifying of synergies and opportunities for value added. . Page 20 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: : Initial foam sector HCFC consumption reduction Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Initial foam sector HCFC Metric ton 0.00 167.80 167.80 167.80 consumption reduction 02-Dec-2013 31-Dec-2014 31-Dec-2014 08-Apr-2015 Comments (achievements against targets): Target achieved 100 percent. HCFC phase-out under Component 1 was successfully completed in April 2015. The result was achieved shortly after the original deadline of December 2014, despite the delay in the project effectiveness. This allowed Argentina to comply with its Montreal Protocol obligations. Data source: National Montreal Protocol Management Information System (MIS). Quality of data: High, verified by a technical visit. Main activities that contributed to the achievements: Component 1: purchase and installation of ODS-free equipment, destruction of critical parts of the old equipment and respective verification. Objective/Outcome: : Reduce CO2e emissions Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion CO2e emissions Tones/year 0.00 216655.00 216655.00 135905.00 02-Dec-2013 31-Dec-2018 31-Dec-2018 18-Dec-2017 Page 21 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Comments (achievements against targets): Target achieved at 63 percent. This indicator of GHG emissions is not an objective in a strict sense as it is not included in the PDO and is not related to Argentina meeting the Montreal Protocol obligations. The target is not fully achieved because of the reduction in scope under Component 2. Component 1 contributes 121,655 tCO2e per year to this target and Component 2 was expected to contribute the remaining 95,000 tCO2e (44 percent of the target) by replacing 20 chillers. Only 3 chillers were replaced as noted in the intermediate indicators. The CO2e emission reduction was calculated by dividing the target 95,000 tCO2e by 20 chillers and multiplying by 3 (the number of actual converted chillers). The target is based only on GWP of the refrigerant, without calculating associated energy efficiency gains, thus the likely CO2 savings are higher. The PCU with the new Implementing Agency UNIDO has received 9 expressions of interest in December 2018 to replace CFC chillers with highly efficient chillers. If 9 additional chillers are converted, this will bring the total achievement of CO2 to 178,655 metric tons per year at 83 percent of the target by December 2019. Data source: GWP of refrigerant; project M&E. Quality of data: High, verified through technical visits. Main activities that contributed to the achievements: Component 1: GWP of the HCFC avoided through introducing ODS-free equipment; Component 2: Replaced and destroyed CFC chillers through providing subsidies for purchase of CFC-free new chillers. A.2 Intermediate Results Indicators Component: HCFC Phase-out at Mabe Argentina S.A. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion HCFC-141b consumption Metric ton 0.00 167.80 167.80 phase-out at Mabe Argentina S.A. 02-Dec-2013 08-Apr-2015 08-Apr-2015 Comments (achievements against targets): Target achieved 100 percent. HCFC phase-out under Component 1 was successfully completed in April 2015. Data source: National Montreal Protocol Management Information System. Quality of data: High, verified by a technical visit. Main activities that contributed to the achievements: purchase and installation of ODS-free equipment, destruction of critical parts of the old equipment and respective verification. Page 22 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Component: CFC Replacement in Chillers Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Replaced and destroyed CFC- Number 0.00 20.00 3.00 chillers 02-Dec-2013 18-Dec-2017 31-Dec-2018 Comments (achievements against targets): Target achieved at 15 percent. Three out of targeted 20 chillers were replaced and destroyed. Two Sub-Grant Agreements that covered three CFC chiller conversions (2 x 350 tons of refrigeration and 400 TR) were completed. The Bank MTR mission identified two major reasons for low take-up at the country level: (i) the climatic conditions in Argentina do not require maximum performance of chillers, and many old CFC chillers still had a useful life of up to 10 years; and (ii) the manifold macroeconomic challenges faced by the country and extremely low energy prices until early 2016 did not favor investments in imported goods that are not essential to enterprises and agencies. The PIU and the new implementing agency UNIDO has received 9 further expressions of interest for CFC chiller conversion in December 2017. If 9 additional chillers are converted, this will bring the total achievement of this intermediate indicator to 12 chillers or 60 percent. Data source: Project M&E. Quality of data: High, verified through technical visits. Main activities that contributed to the achievements: Component 2: Replaced and destroyed CFC chillers through providing subsidy for purchase of CFC-free new chillers. Component: Technical Assistance Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Compliance with the Yes/No N Y Y Y monitoring and control protocol on HCFC-22 02-Dec-2013 18-Dec-2017 30-Jun-2018 31-Dec-2015 production Page 23 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Comments (achievements against targets): Target achieved 100 percent. Component 3 delivered a report on retroactive monitoring of the FIASA HCFC-22 production during 2015, four quarterly monitoring reports covering 2016, and three semester reports from January 2017 to June 2018. FIASA complied with its HCFC-22 production quotas during the entire monitoring period. Data source: Project M&E. Quality of data: High, verified through technical visits. Main activities that contributed to the achievements: Component 3: Monitoring visits to the FIASA plant and elaboration and distribution of the respective reports. Page 24 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) B. KEY OUTPUTS BY COMPONENT Primary Outcome Initial foam sector HCFC consumption reduction Outcome Indicators 1. Initial foam sector HCFC consumption reduction (Metric ton, Custom) 1. HCFC-141b consumption phase-out at Mabe Argentina S.A. (Metric ton, Intermediate Results Indicators Custom) Component 1 1.1 Purchase of a new, ODS-free equipment meeting MP criteria for production of the polyurethane rigid insulation foam for domestic refrigerators including, inter alia: * the installation of hydrocarbon storage and blending equipment; Key Outputs by Component * replacement and/or retrofitting of foaming equipment; (linked to the achievement of the primary outcome) * installation of a safety control and gas monitoring system; * polyurethane system development and qualification, including the corresponding trials, training and refrigerators testing; and * a comprehensive safety audit. 1.2 A technical verification visit and report. 1.3 Reimbursement to Mabe completed. Secondary Outcome Reduce CO2e emissions reduction Outcome Indicators 1. CO2e emissions (tones/year, Custom) 1. HCFC-141b consumption phase-out at Mabe Argentina S.A. (Metric ton, Intermediate Results Indicators Custom) 2. Replaced and destroyed CFC-chillers (Number, Custom) Component 1: See 1.1, 1.2 and 1.3 above. Key Outputs by Component Component 2 (linked to the achievement of the secondary outcome) 2.1 Subsidy for purchase of 3 CFC-free new chillers 2.2 CFC captured of 3 CFC chillers and the chillers destroyed Page 25 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Figure 2: Argentina HCFC Consumption Page 26 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Tuuli Johanna Bernardini Task Team Leader Emilia Battaglini Senior Environmental Specialist Ana B. Iraheta Language Program Assistant Viraj Vithoontien Senior Environmental Specialist Thanavat Junchaya Senior Environmental Engineer Victor Manuel Ordonez Conde Senior Finance Officer Jose Vicente Zevallos Senior Social Development Specialist Claudia Nin Team Assistant Ana Maria Grofsmacht Procurement Specialist Daniel Chalupowicz Financial Management Specialist Marcelo Hector Acerbi Senior Environmental Specialist Juan Tao Counsel Julius Martin Thaler Counsel Dominique Isabelle Kayser Operations Officer Maria Pia Cravero Junior Counsel Juan Pedro Cano Junior Professional Associate Supervision/ICR Tuuli Johanna Bernardini Task Team Leader Maria Elizabeth Grandio Procurement Specialist Paula Agostina Di Crocco Financial Management Specialist Thanavat Junchaya Senior Environmental Engineer Renata Pantoja Financial Analyst Santiago Scialabba Social Development Specialist Graciela Dora Broda Team Assistant Page 27 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Maria Pia Cravero Counsel Sofia De Abreu Ferreira Senior Counsel Pablo Francisco Herrera Environmental Specialist Daniela Fernanda Gayraud Aguayo Team Assistant Anna Gueorguieva ICR Author B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY12 49,292 FY13 50,011 FY14 2,475 Total 111,778 Supervision/ICR FY14 .525 2,344.12 FY15 4.100 20,614.74 FY16 10.557 54,056.74 FY17 13.198 108,660.60 FY18 8.920 57,687.52 Total 37.30 243,363.72 Page 28 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 3. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Component 1: HCFC Phase- .84 .84 100 out at Mabe Argentina S.A. Component 2: CFC .95 .14 15 Replacement in Chillers Component 3: Technical .08 .07 86 Assistance Component 4: Project .05 .05 100 Management Component 5: Foam Sector Plan for HCFC Phase-out 0 0 0 (Phase II) Total 1.92 1.10 57 Page 29 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 4: Theory of Change for Phase I and II HCFC Phase-out in Argentina ● At the global level, mitigate ozone depletion and climate change. Long-term outcomes ● At the national level, meet Argentina’s international treaty obligations while strengthening industrial competitiveness. Outcomes PDO/ Support the Recipient in phasing out controlled ozone-depleting substances in accordance with the Recipient's obligations under the Montreal Protocol. HCFC-141b consumption in the foam sector reduced; Phase I at Mabe and Phase II at the More ozone-friendly and energy efficient Short-term outcomes sector level chillers used - New ODS-free equipment - CFC chillers replaced and - MP files fully digitized purchased, verified through a - A MOP database Outputs destroyed technical visit and reimbursed - Purchase of CFC-free new established at Mabe chillers subsidized - Foam Sector Plan prepared HCFC Phase-out in the Foam Sector Component 2: CFC Replacement in Chillers Component 3: Technical Assistance o Component 1 (HPMP Phase I): o Replacement of at least 20 CFC Support to phase out HCFC at chillers in private enterprises. o Monitoring system for Mabe Argentina S.A., the Technical assistance in diffusion, national HCFC Activities o largest MLF eligible plant in monitoring, and reporting on the production. the country. replacement program of CFC chillers o Project management. o Component 5 (HPMP Phase and energy efficiency gains. II): Foam Sector Plan for complete HCFC Phase-out. CRITICAL ASSUMPTION: Staged CRITICAL ASSUMPTION: implementation and different Private sector responds approaches to larger enterprises and positively to financial incentive SMEs in the foam sector for HCFC (subsidy) for conversion of CFC phase-out is needed chillers. Page 30 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 5. EFFICIENCY ANALYSIS 1. Global-level analyses conducted by UNEP [‘The Montreal Protocol and the Green Economy’ (2012)] credits the MP with having created enabling conditions that stimulated a transition to a Green Economy, resulting in improved human well-being and social equity, as well as reduced environmental risks. Specifically, technological advances and design innovations promoted under the PM have reduced costs, produced cleaner and more reliable products and created better working environments. The report asserts that the transfer of knowledge and technology in support of ozone protection has helped many developing countries better compete in international markets. From a social perspective, the transition to non-ODS technologies, products and services has resulted, on balance, in a shift in jobs, supported by higher levels of training, versus jobs lost. In terms of human health, the MP is estimated to have generated significant benefits, namely reductions in cancers and cataracts, that have been valued at more than 11 times the direct investment costs of phasing-out ODS. It is therefore expected that the project impacts will be positive and that the cumulative impacts of the reduced use of ODS in tandem with the increased use of chemicals with lower climate impact will be positive for both the Argentine and global societies. PAD Analysis 2. The PAD did not carry out a financial or economic analysis. Due to the phased approach of the HCFC phase out in the foam sector, the analysis was planned as part of Phase II of the Argentina HPMP. A comprehensive financial impact assessment of the cost of HCFC- 141b phase-out to the Argentine foam industry was not possible at appraisal because of lack of detailed reliable baseline information from the enterprises in the sector. Comprehensive sector-level financial analysis, including MABE, was planned to be conducted for Phase II of the project, however, due to its cancellation, it was not carried out. ICR Analysis 3. Efficiency is often defined in terms of measuring the outputs, qualitative and quantitative, in relation to the inputs. As input-output analysis is better suited for quantification of monetary flow transactions between sectors in an economy, by which we understand better how the change in one sector would affect the other sectors. To capture the overall impact of the project on the economy of Argentina, an economic analysis undertaken would assess the supply and demand of all associated sectors of HCFC-141b and its alternatives, including foam, refrigeration and air-conditioning, servicing, as well as government regulation and consumer behavior. 4. Economic efficiency, calculated as economic rate of return (NPV) using Cost-Benefit Analysis (CBA), is often used to determine efficiency against alternative investment opportunities. In case of sectoral projects for which CBA is not feasible, evaluation of efficiency can benefit from assessing the quality of different intervention options and a combination of them and complementing the estimates made at design with data on actual costs and benefits at the time of evaluation 6. The CBA for this project had to be evaluated only with the shadow price of GHG emissions avoided but lacking data on other economic, environmental, social and health impact. The estimates suggest very high economic rate of return (ERR) and net present value (NPV) due to the avoided CO2, using the low value of the social price of carbon. 6 IEG. (2017, Februrary 28). Rethinking Evaluation - Efficiency, Efficiency, Efficiency. Retrieved from Independent Evaluation Group: https://ieg.worldbankgroup.org/blog/rethinking-evaluation-efficiency Page 31 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) 5. Given that the project contributed to the reduction of nearly 135,905 CO2e tons of GHG per year, the presented CE only reflects one measure of efficiency (conversion costs) without trying to capture the external environmental and social benefits of both ozone layer protection and climate change mitigation. In addition, if the efficiency analysis would be able to factor in also the hidden costs and benefits of environmental and social impacts from reduced exposure to ODS depletion and climate risks (for which viable data are missing), the efficiency of this project would be even higher. 6. In the Bank’s “2017 Updated Guidance Note on Shadow Price of Carbon in Economic Analysis”, which establishes a price range for use in valuation of carbon emissions in economic analysis of investment projects, the range for 2018 is from US$38 to US$77 per ton CO2e. At this price, the annual value of the GHG reductions from the project at completion would be US$5.2M to US$10.4M. By contrast, the investment cost of GHG reductions achieved in the Argentina HCFC project was only US$7.79/ton CO2e (US$1.01M/135,905.00 tons of CO2e), or about 21 percent of the low end and 10 percent of the high end of the shadow price range. If we were to use the low value of the shadow price of CO2 and calculate the benefits accruing from avoiding CO2, the ENPV over 20 years with a social discount rate of 6 percent is US$58.9M and the EIRR is 141 percent. NPV US$ 58,886,168.95 IRR 141% 7. In the context of ODS projects, efficiency can be defined in terms of measuring the economic outputs from converting ODS to low (zero) ODP and low GWP alternatives. Efficiency analysis can also investigate whether and how the project adopted the most efficient process to achieve the desired results, by comparing it to alternative approaches. In addition, it should also be factored into the efficiency analysis the hidden costs and benefits of environmental and social impacts from reduced exposure to ODS depletion and climate risks. Given that the project modality used a multi-year, performance-based funding model, under which disbursement of funds was made against verifiable sustained reduction of ODS phase-out targets in each sector, project efficiency was assessed by comparing the cost of per kg ODP phased out (US$/kg ODP), with the cost of project at approval and with the MLF’s thresholds. 8. This method of analysis is consistent with how efficiency is assessed based on the cost-effectiveness (CE) of phase-out activities. Under the ExCom, CE is defined as the amount of MLF grant per unit weight of HCFC phased out in kg. With an actual total conversion costs of US$838,612, the project phased out 167.8 metric tons of HCFC- 41b, resulting in a CE of US$5.0/kg of HCFC-141b under Component 1, which is lower than the average CE of US$6.96/kg for the project at approval by the MLF. 9. The ExCom does not set a standard CE for HCFC conversion. The CE reflected in HPMP Agreements and MLF-financed projects varies considerably between projects due to difference in the circumstances in the countries, the scale of the facilities being converted, specific HCFC being phased out, sectors addressed, technology used, and type of foam or refrigeration. The CE at appraisal (for grant-financed share only) for some other active projects that are phasing out HCFC-141b and/or HCFC-22 or both, are US$3.81/kg (China), US$6.99/kg (Indonesia), US$7.65/kg (Thailand), and US$6.05/kg (Jordan). As reflected in Table 1 below showing the CEs for individual enterprises in this project including the projected CEs for Phase II, the CE also varies considerably even within a single sector in the same country (US$6.091/kg to US$10.96/kg). Ultimately, the actual CE was slightly lower than was agreed as the basis for the MLF grant. Page 32 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Enterprise Date of Application HCFC-141b HCFC-142b HCFC-22 Baseline Action ICC ($) IOC ($) Total ($) Local Approved ($) CE Establishment (MT) (MT) (MT) Equipment ownership ($/kg) (%) STAGE I FOAM PROJECT Mabe 1947 PU foam for 167.8 2 HP Replacement 1,622,500 2,717 1,625,217 51.6% 838,612 5.00 domestic dispenser, 66 refrigerator & 33 kg/min, Canon STAGE II FOAM SECTOR PLAN Friostar 1996 Continuous panel 38.92 1 HP 4- Retrofit 336,050 0 336,050 100.00% 336,050 8.63 component dispenser, 60 kg/min, SAIP Argenpur 2001 Block PU foam, 21.61 371,800 0 371,800 100.00% 211,524 9.79 spray foam and PIP 1 LP dispenser, 18kg/min, OMS Impianti; 1 LP dispenser, 30kg/min, Tecnifoam; 1 spray foam machine, 7kg/min, Gusmer System House Projects Alkanos 96.0 123,935 875,712 999,647 999,647 10.41 BASF 108.0 80,390 834,565 914,955 914,955 8.47 Dow Multiple applications 45.4 32,530 413,610 446,140 446,140 9.84 Ecopur by downstream 46.6 127,870 424,937 552,807 510,763 10.96 Huntsman users 92.5 118,530 844,010 962,540 962,540 10.40 Poliresinas 22.0 104,865 173,210 278,075 241,438 10.96 Química del Caucho 56.5 73,100 515,244 588,344 588,344 10.41 XPS Foam Celpack 1987 XPS board 26.77 8.92 1 extruder, 180-220 kg/hr, LMP Impianti 348,767 6.09 Perfiles Revestidos 1997 XPS board 21.60 2 extruders, 250 & 400 kg/hr, JGXPS & CH Chang Page 33 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 6. Summary of the BORROWER ICR The Project Coordination Unit (PCU) within the Ministry of Production and Labor and the Chief of the Cabinet of Ministers reviewed the draft ICR. The PCU agreed with the draft and the later proposed minor adjustments in the description of the country situation in the main text and updates in the current names of the referred public entities in Annex 5. All these adjustments were incorporated in the final ICR. The PCU ICR presented below was succinct and descriptive in nature. The Bank team acknowledges the PCU’s availability to contribute to the ICR preparation. REPÚBLICA ARGENTINA, OTF 14897 Proyecto de Reducción de Hidroclorofluorocarbonos (HCFC) bajo el Protocolo de Montreal Informe Final ARREGLOS DEL MARCO REGULATORIO E INSTITUCIONAL El Protocolo de Montreal relativo a las sustancias que agotan la capa de ozono (PM) es un tratado ambiental internacional multilateral adoptado en 1987 que se basa en el reconocimiento a nivel internacional de la necesidad de adoptar medidas firmes para proteger la capa de ozono de la Tierra. El Protocolo fijó objetivos con plazos definidos para reducir la producción y el consumo de sustancias que agotan la capa de ozono (SAO). En cumplimiento de sus compromisos con la protección de medio ambiente mundial, la República Argentina ha ratificado el PM y todas sus enmiendas, y es Parte en la Convención Marco de las Naciones Unidas sobre el Cambio Climático (CMNUCC) y su Protocolo de Kioto. Durante la XIX Reunión de las Partes en el PM de 2007, la Argentina fue proponente de la reducción acelerada de hidroclorofluorocarbonos (HCFC), las sustancias de transición introducidas para reemplazar el uso de clorofluorocarbonos (CFC) en determinadas aplicaciones. La reducción de HCFC es una excelente oportunidad de sinergias entre la protección de la capa de ozono y del clima en virtud de la Decisión XIX/6 de las Partes en el PM, que pidió que se tomen en consideración los impactos climáticos cuando se reduzcan los HCFC. La República Argentina ratificó el Protocolo de Montreal (PM) relativo a las Sustancias que Agotan la Capa de Ozono (SAO´s) el 18 de septiembre de 1990. En 1994 la Argentina elaboró el Programa País (PP) en el cual establece su compromiso y propone un marco institucional para el logro de esos objetivos. El PP es un plan trianual donde el país deja asentadas sus políticas a futuro en cada sector y enumera las acciones que implementará en cada uno para dar cumplimiento a los compromisos que contraerá. El PP es presentado al PM y, una vez aprobado, es para el país un compromiso al cual se obliga. La República Argentina ha promulgado un marco legal e institucional amplio en apoyo de la protección de la capa de ozono que asigna responsabilidades y obligaciones para la implementación de medidas para reducir las SAO, inclusive la conversión de sectores industriales que producen, manejan y utilizan SAO. En el año 1996, a los fines de facilitar la coordinación y efectividad del Plan de Acción del Gobierno para el cumplimiento del PP, se creó mediante el Decreto 265/96 la Oficina Programa Ozono (OPROZ). La (OPROZ) proporciona la estructura institucional para las operaciones del PM en la Argentina. Está compuesta por representantes de los siguientes organismos nacionales: la Secretaría de Gobierno de Ambiente y Desarrollo Page 34 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Sustentable (SAyDS), que es el centro de enlace y el organismo de coordinación a nivel nacional; el Ministerio de Producción y Trabajo, donde se encuentra la Dirección Nacional de Desarrollo Sostenible de la Industria, que lleva adelante los proyectos de reconversión industrial, y el Ministerio de Relaciones Exteriores, que dirige las tareas relacionadas fuera del país. Adicionalmente, participa en el trabajo de la OPROZ la Secretaría de Gobierno de Agroindustria en las cuestiones relacionadas con el metilbromuro. La OPROZ tiene la facultad de contar con la asistencia de un cuerpo asesor, llamado “Grupo Consultivo” (GRUCO), conformado por representantes de organismos públicos y privados, empresas vinculadas a la temática a tratar, ONGs interesadas, especialistas, etc., que se invitan a opinar sobre temas específicos vinculados con la temática del ozono. GRUCO funciona ad-honorem y no tiene carácter permanente; se reúne con la frecuencia que la temática exigiera y se disuelve una vez agotado el tema. En abril de 2012, el Comité Ejecutivo (ExCom) del Fondo Multilateral para la Implementación del Protocolo de Montreal (FML) aprobó la fase 1 del Plan de Gestión de la Reducción de HCFC (PGRH) en la Argentina. El país encaró la primera fase de la reducción de HCFC comenzando con la congelación del consumo de referencia durante el año 2013, y una reducción del 10% del nivel de congelación durante el año 2015. El 19 de diciembre de 2014 se suscribió el Convenio de Donación de los fondos provenientes del MLF, OTF Nº 14897, entre la República Argentina y el Banco Internacional de Reconstrucción y Fomento (BIRF; Banco Mundial, Banco), actuando este último como agente fiduciario, por un monto inicial de U$S 1.914.612 (Dólares estadounidenses un millón novecientos catorce mil seiscientos doce) para financiar el costo del Proyecto de Reducción de Hidroclorofluorocarbonos (HCFC) (Proyecto). El objetivo de desarrollo del Proyecto fue brindar apoyo a la República Argentina para la reducción de sustancias controladas que agotan la capa de ozono en conformidad con las obligaciones del país en virtud del Protocolo de Montreal. El Proyecto contribuyó a alcanzar los objetivos del Plan País, presentado ante el PM por el Punto Focal/OPROZ. Dicho Convenio se ejecutó a través de la Secretaria de Industria (SI), dado que se trataba de subproyectos vinculados a la problemática y reconversión industrial. Los HCFC son sustancias químicas utilizadas principalmente como refrigerantes en equipos de refrigeración y aire acondicionado y como agentes espumantes para fabricar espumas aislantes. Los HCFC fueron introducidos como sustancias de transición para reemplazar el amplio uso de CFC que fueron reducidos internacionalmente al 1º de enero de 2010 bajo el PM. Aunque son significativamente menos potentes que los CFC, los HCFC también son SAO y, por ende, son controlados por el PM y son objeto de eliminación eventual por todas sus Partes. En el año 2007, las Partes en el Protocolo aceleraron el cronograma de la reducción del consumo y la producción de HCFC tanto para los países desarrollados como para los países en desarrollo. Un factor crucial para el ajuste del Protocolo es que los HCFC no sólo son SAO sino también gases de efecto invernadero con un potencial de calentamiento global (PCG), que es de varios cientos a varios miles de veces el del dióxido de carbono (CO2). Además, las tecnologías alternativas de los HCFC pueden ser más energéticamente eficientes, dando como resultado emisiones de CO2 más reducidas. En el año 2016, el Protocolo de Montreal dio un paso más aprobando la enmienda de Kigali, que añade al listado de sustancias a destruir los HFC, gases que fueron reemplazos a los HCFC y que tienen un muy bajo nivel de agotamiento de la capa de ozono, pero tienen un enorme potencial de calentamiento global. MANUAL OPERATIVO (MO): El MO es el instrumento indispensable destinado a orientar a los ejecutores del Proyecto. Fue redactado y puesto en vigencia coincidiendo temporalmente con el inicio de las actividades del Organismo Ejecutor. Define el reglamento, las metodologías y los procedimientos para ingresar y ejecutar los subproyectos, sobre Page 35 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) la base de criterios unificados para todas las empresas participantes que deseen obtener el financiamiento disponible a través del PM, para cubrir los costos elegibles en el marco de cada subproyecto que integre el Proyecto. Establece las normas técnicas y los procedimientos administrativos a ser seguidos por el Organismo Ejecutor y por las empresas participantes. MISIONES DEL BANCO MUNDIAL: El Banco realizaba entre una y dos veces al año Misiones de Supervisión del Proyecto, lideradas por el Gerente de Proyecto e integradas por otros miembros (personal o consultores técnicos, ambiental, adquisiciones, financiera y legal), según el propósito específico de cada Misión. Las misiones eran coordinadas con el Organismo Ejecutor en colaboración con los organismos que participan (Ministerio de Hacienda, Jefatura de Gabinete de Ministros, SGAyDS y Cancillería). Durante los días en que se llevaba a cabo la misma, se seguía la agenda armada y por lo general se realizaban reuniones con las representantes de las empresas beneficiarias y se coordinaban algunas visitas a las mismas. Los resultados de cada Misión se reflejaban en una Ayuda Memoria (AM), dejando constancia de los acuerdos logrados y pasos a seguir principales entre las partes. ASISTENCIA DEL BANCO A LA UNIDAD EJECUTORA: La asistencia del Banco se canalizó principalmente por las Misiones que concurrieron al país. De esta manera normalmente dos veces al año quedaron documentados y oficializados los hechos más importantes ocurridos en los subproyectos y la opinión del Banco sobre los mismos, opinión que era tanto a modo de respaldo a lo actuado por el Organismo Ejecutor como a modo de instrucciones o directivas a respetar. Durante el desarrollo del Proyecto, el Organismo Ejecutor tuvo como principio básico, según estipulado en el MO, solicitar del Banco su No-objeción previa a la implementación de modalidades de trabajo. Ello nunca fue un obstáculo que demorara la implementación de alguna tarea. AUDITORÍAS DE SEGUIMIENTO Y CONTROL: El Organismo Ejecutor recibió anualmente una auditoría externa de los Estados Financieros y múltiples auditorías de la Unidad de Auditoría Interna del Ministerio, como así también la auditoría financiera interna del Banco. Antes del 30 de junio de cada año, los resultados de las auditorías anuales externas fueron enviados al Banco, y presentados a las siguientes autoridades nacionales: la Dirección Nacional de Proyectos con Organismos Internacionales de Crédito (DNPOIC) y la Contaduría de la Nación. Para el último ejercicio se tomó como excepcional una auditoría externa que abarque todo el año 2017 y hasta el 30 de junio de 2018. En el transcurso del Proyecto se realizaron los estados financieros intermedios (IFRs, por sus siglas en inglés) con cierre al 30 de junio y 30 de diciembre de cada año, y los mismos fueron presentados satisfactoriamente al Banco. EJECUCIÓN DE PROYECTOS El Proyecto apoyó la reducción de HCFC en el sector industrial. La intención fue apoyar al Gobierno de Argentina en sus esfuerzos globales por cumplir con sus obligaciones bajo el Protocolo de Montreal mediante un enfoque de dos fases a fin de alcanzar: 1) una reducción del 10% en el consumo de HCFC durante el período 2013-2015 y 2) una reducción adicional del 25% para el año 2020. Los componentes de la primera fase fueron aprobados por el ExCom en abril 2012 y se implementaron a partir de la efectividad de la Donación OTF Nº 14897 el 30 de enero de 2015 como presentado a continuación. El componente 5, correspondiente al Plan Sectorial de Espumas, se aprobó en la 79° reunión del ExCom, formando parte de la fase dos del HPMP. Fase I: Componentes aprobados del Proyecto Componente 1: Reducción de HCFC en Mabe Argentina S.A. (FML USD 838.612) Page 36 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Provisión de financiamiento para reducir 167,8 toneladas métricas (18,5 toneladas de PAO) de consumo de HCFC-141b en la producción de espumas rígidas de poliuretano destinadas como aislamiento de refrigeradores de uso doméstico en la empresa Mabe Argentina S.A. que incluyó, entre otros: la instalación de equipamiento para el almacenamiento y la mezcla de hidrocarburos, el reemplazo y/o el reacondicionamiento de equipamiento para la fabricación de espuma, la instalación de un sistema de control de seguridad y monitoreo de gas, el desarrollo y la calificación de un sistema de poliuretano, incluidos los ensayos, la capacitación y la prueba de refrigeradores que correspondan, y una auditoría completa de seguridad. Componente 2: Reemplazo de CFC en enfriadores (FML USD 950.000) Prestación de apoyo para el reemplazo de como mínimo 20 enfriadores con CFC en empresas privadas. Provisión de asistencia técnica para la difusión, el control y la preparación de informes sobre el programa de reemplazo de enfriadores con CFC y los beneficios en cuanto a eficiencia energética. Componente 3: Asistencia Técnica: Control e informes de cumplimiento relativos a la reducción de la producción de HCFC-22 (FML USD 76.000) Creación de un sistema de control que atienda la producción anual de HCFC-22, las cuotas de importación y las existencias, y la mejora del Sistema de Información de Control (SIC) alojado en la SGAyDS. Componente 4: Gestión del Proyecto (FML USD 50.000 para la Fase I) Provisión de financiamiento a la UCP para coordinar y gestionar la implementación del Proyecto. Componente 5: Plan del Sector Espumas para la reducción de HCFC COMPONENTE 1. Reducción de uso de HCFC en Mabe ARGENTINA S.A. El proyecto aprobado por el PM para reconvertir la tecnología de la firma Mabe obligaba al país a ejecutarlo obligatoriamente antes de finalizar el 2015 porque el consumo de HCFC de la empresa era muy importante (167,8 ton/a), tan importante que eliminar ese consumo para diciembre de 2014 era necesaria para que Argentina pudiera cumplir el compromiso de reducción a esa fecha. Tan es así que es el primer proyecto en el que se señala explícitamente en la carátula lo siguiente: "IMPACT OF THE PROJECT ON COUNTRY’S MONTREAL PROTOCOL OBLIGATIONS: This project eliminates 18.5 ODP tons (167.8 tons of HCFCs) which is essential for Argentina to comply with the control measures of the Montreal Protocol for 2013 and 2015." Para cumplir en tiempo y forma el compromiso el proyecto debía ser ejecutado durante el año 2014. La finalización del período de vigencia de la OTF 22013 a esa fecha, y por lo tanto el respaldo legal de las acciones a ejecutar por la UEPRO, no permitían seguir los pasos formales comunes a todo proyecto a ser ejecutado (firma de un Convenio, presentación de documentación legal, Plan de Trabajo, Cronograma de Desembolsos, etc.), lo cual llevaba a tener que buscar una solución de compromiso. Con la anuencia de las autoridades nacionales y la participación del IBRD, la ex UEPRO acordó con las autoridades de la empresa Mabe (que al momento de la negociación estaban por ejecutar un ambicioso plan de ampliación de su línea de producción de heladeras en su planta de San Luis) que incorporarían este proceso de reconversión tecnológica a plan de trabajo a ejecutar, soportando el costo aportando fondos propios necesarios y que los fondos del PM le serían Page 37 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) abonados con carácter de retroactividad. Como parte de la mencionada negociación se acordó asimismo que la empresa Mabe mantendría los contactos necesarios con la UEPRO y se avenía a seguir las instrucciones que recibiera de ésta a fin de cumplimentar todas las exigencias formales que hubiera debido cumplimentar si hubiera formalizado el CONVENIO de SUBDONACIÓN. Como parte de ese compromiso, la UEPRO, la MISIÓN de SUPERVISIÓN del IBRD y dos profesionales de la empresa (el Ing. Daniel Lasagno - Gerente de Planta- y Daniel Caviudo- Gerente del Departamento de Ingeniería), mantuvimos una reunión con la Jefe del Departamento de Adquisiciones del IBRD en Argentina - Lic Anna Gorfschmatch- en la que se detallaron todos los pasos a dar en la gestión de adquisición, los límites permitidos por las Normas del Banco, la secuencia de los pasos a dar, las formalidades a cumplir, etc. Entre los puntos específicamente puntualizados en esa oportunidad estuvo la modalidad a aplicar en el llamado y allí la representante del IBRD indicó claramente que, dado los montos previstos (menos de U$S 1 M) se podía utilizar la modalidad de CONCURSO. Por lo tanto, la empresa Mabe inició la ejecución del proyecto basado en un buen asesoramiento en los aspectos formales. Tuvo además el soporte de su casa matriz en México la cual había ya ejecutado su propio proyecto de reconversión y asistido al mismo proceso en una de sus filiales en Sudamérica. Por lo tanto, de allí tomó como base todas la Especificaciones Técnicas del equipamiento, entre otras cuestiones. Periódicamente, Mabe fue poniendo en conocimiento de la UEPRO los pasos que se iban dando. A su vez la UEPRO iba poniendo en conocimiento de estos avances al IBRD en cada Misión de Supervisión que realizaba al país. El punto 7 del Ayuda Memoria de la Misión realizada entre el 17 y el 18 de mayo de 2014, deja constancia de ello. Mabe - siguiendo la misma mecánica que habían realizado los integrantes del holding antes señalados- optó por llamar a Concurso por la provisión de todos los componentes que fueran equipamiento nuevo. Cuando todo el proceso de gestión de las adquisiciones finalizó, y tal como se le había impuesto en los acuerdos mencionados al inicio, Mabe le envió a la UEPRO el Legajo de Adquisiciones - es decir copia de todos los documentos, notas, presentaciones, actas, etc., - en dos copias anilladas. Una de las carpetas se incorporó al expediente de la UEPRO, fue analizada y se le prestó conformidad; la otra fue enviada al IBRD en la CABA por nota del 3/9/2014 dirigida a la Analista de Adquisiciones del Departamento de Adquisiciones. No hubo otras adquisiciones de equipos fuera de los comprendidos en el Concurso mencionado ut-supra. Sólo hubo contrataciones vinculadas con montajes, instalaciones, instrumentación, conexionado, pruebas, obras civiles, etc. Cabe destacar que Mabe fue cumpliendo, en el transcurso de las obras, con demandas secundarias establecidas por el IBRD para la ejecución de proyectos financiados por el PM tales como: ● la presentación de la Ficha de Evaluación Socio Ambiental; ● el Marco de Gestión Ambiental y Social; ● la Constancia del Destino final del equipamiento reemplazado; ● la Certificación de la aptitud del equipamiento para trabajar con ciclopentano; ● los Certificados de las Habilitaciones provinciales; ● la certificación de los cursos de capacitación al personal, La empresa Mabe dejó de utilizar los HCFC en su producción el 31/12/2014. El 7 de julio de 2015 se firmó el Convenio Page 38 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) de Subdonación. Las fechas antes señaladas indican claramente que el proyecto fue ejecutado conforme a las necesidades del país permitiéndole cumplir su compromiso internacional y en el transcurso de los trabajos se fueron cumpliendo todos los pasos formales y de control que se establecen para un Convenio formalmente comprometido. Es necesario destacar que el Proyecto aprobado para la empresa Mabe incluye un listado de equipos a comprar y sus posibles valores y asimismo valoriza el posible costo total de la obra, llegando a la cifra de U$S 1.950.443, pero no establece qué parte debe ser pagada con los fondos del proyecto y cuáles son a cargo de Mabe. Por ello, para cada desembolso solicitado, la UEPRO debió analizar la razonabilidad de la inclusión de los renglones en el listado que acompañaba cada solicitud. El criterio central fue siempre priorizar el desembolso de gastos en equipos o instrumental o instalaciones de seguridad y prevención (se trabaja con un gas explosivo de cierto riesgo). El proyecto se dio por finalizado en abril de 2016 fecha del último desembolso de fondos. Una vez erogados los fondos finales se procedió a confeccionar el correspondiente Project Completion Report (PCR) presentado el 03/05/2017. COMPONENTE 2. Reemplazo de clorofluocarbonos (CFC) en enfriadores En el periodo se firmaron dos Sub-Convenios de Donación, uno por 2 equipos de 350 toneladas de refrigeración (TR) con la Fundación Favaloro, y otro por un equipo de 400 TR con el Consorcio de Propietarios del Edificio Florida 2 en el centro de la Ciudad Autónoma de Buenos Aires. 1. La Fundación Favaloro- Hospital Universitario y de Investigación Médica- (FF), recibió los dos equipos nuevos, hizo retirar el CFC de uno de los equipos a reemplazar y los entregó a una empresa responsable y los hizo retirar de sus instalaciones, destruyó el equipo viejo, procedió a hacer montar los equipos nuevos y los puso en operación, habiendo ya satisfecho las pruebas de funcionamiento continuo. Total desembolsado: U$S 97.360. Por demoras en la entrega de los equipos por parte de Carrier (justificada por la empresa Carrier en las dificultades en conseguir bodega en barcos que cubrieran el tramo origen-destino, según le fue informado al Coordinador de la UEPRO por el mismo representante de Carrier), la FF se vio impedida de avanzar en la instalación del segundo equipo para no correr riesgos de efectuar el recambio en pleno verano dejando las Salas de Cirugía y de Terapia Intensiva sin el resguardo necesario. El reemplazo del segundo equipo fue postergado hasta el primer cuatrimestre del 2017 cuando las condiciones climáticas lo permitieron. La UEPRO estuvo presente durante el acto de destrucción del equipo. El nuevo equipamiento incluye el instrumental de control que automáticamente distribuye las cargas no sólo entre los dos equipos nuevos sino también con un equipo más pequeño que disponen en la Sala de Máquinas como back up ante posibles emergencias, pero pasará a trabajar como equipo de aporte de sobre demanda de cargas; la FF estima con ello que podrá obtener hasta un 40% de ahorro en energía consumida, valor estimado pues no cuentan con mediciones sectoriales. El Gobierno Argentino y BM acordaron elevar el subsidio de 20% del valor del nuevo equipo al máximo permitido por Page 39 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) MLF de 33%, según lo plasmado en el punto 7 de la AM de la RMT. 2. Consorcio Florida 2. Se concretó el Convenio de Subdonación de U$S 44.200,- en fecha 12 de agosto de 2016. Total desembolsado: U$S 44.200. El Consorcio presentó la gestión de compra en curso que tenía al momento de la presentación, el que fue revisado y conformado por la UEPRO pues cumplía con la mecánica exigida por los montos involucrados; el equipo fue recibido en el edificio del consorcio; se extrajo el CFC del equipo y se lo entregó a una empresa responsable, la cual los hizo retirar del edificio; se procedió a la destrucción del equipo viejo, a montar el equipo nuevo y se lo puso en operación, habiendo satisfecho las pruebas de funcionamiento continuo. De todas estas acciones existen las correspondientes presentaciones formales del Consorcio (el análisis de la UEPRO de dicha documentación, el Informe del Asesor Técnico prestando su conformidad) en 3 volúmenes de carpetas del archivo de la UEPRO. La Dirección de Desarrollo Sostenible de la Industria Nacional (DNDSIN) estuvo presente durante el acto de destrucción del equipo. COMPONENTE 3. Asistencia Técnica: Monitoreo e Informes de cumplimiento relativos a la producción de HCFC-22 Al mes siguiente al de finalización del semestre calendario se procede a efectuar el monitoreo y control de la producción de HCFC-22 de la empresa FIASA. Para ello, concurren a las instalaciones de la planta de Villa Mercedes- San Luis la Asesora Contable- Administrativa y el Asesor Técnico y proceden a corroborar toda la documentación de planta según se detalla a continuación: - “Partes Diarios de Producción” y “Resúmenes de Producción Mensuales” referidos a los movimientos de existencias de HF y Cloroformo y a la producción HCFC-22. - Ficha Movimiento de Stock por Artículo / Depósito. - Remitos. - Facturas de Ventas de “Productos ODS”. - Facturas de Ventas de Materias Primas. - Despachos de Aduana y Facturas de proveedores por compras de “Productos ODS”. - Despachos de Aduana y Facturas de proveedores por compras de Materias Primas. - Libros Contables: IVA Ventas, IVA Compras, Diario, Inventario y Balance. Asimismo, se procede a realizar una revisión de las instalaciones físicas a fin de verificar eventuales modificaciones. Los resultados de los controles quedan registrados en el correspondiente “Informe del Monitoreo” del que se extraen cifras sobre movimientos de existencia de materias primas y productos, cantidades de HCFC-22 producidas en el semestre y otras, datos que son informados por nota al entonces Ministerio de Ambiente y a la Cancillería. Por otro lado, en el marco de este componente, se evaluó junto con el Banco Mundial la posibilidad de utilizar parte de los fondos para elaborar una plataforma que contenga toda la historia del proyecto, así como también de los proyectos anteriores en el marco del Protocolo de Montreal, digitalizada y accesible para su consulta. Finalmente se realizó la convocatoria para elaborar una PLATAFORMA DE MONITOREO Y DIGITALIZACIÓN de 100.000 hojas. A la misma se presentaron tres cotizaciones de un Profesional con experiencia en elaboración de Plataformas Digitales y desarrollo de programación. Luego de realizado el proceso de selección según los marcos establecidos, se procedió a contratar al profesional y llevar a cabo la tarea que consistió en: 1) Digitalizar 100.000 hojas y 2) Armado de la Plataforma de Monitoreo que deberá contener: Información General (Menú / Home): OPROZ (¿Quién lo compone?; ¿Cómo funciona?; GRUCO; Normativa); Búsqueda de proyectos; Monitoreo (Consumos; HCFC-22; HFC-23; Bromuro de Page 40 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) metilo; Sistema de licencias); Eficiencia Energética; Mitigación de Cambio Climático; Noticias; Calendario de reducción; Normativa del Protocolo (protocolo y enmiendas sobre todo). Criterios de búsqueda de proyectos: Tipo de gas (Ej. CFC, HCFC); Gas (Ej. HCFC-22); CUIT de la empresa; Nombre de la empresa; Localidad; Provincia; Sector (Ej. Heladeras). Esta búsqueda reporta un listado de proyectos identificados por el nombre de la empresa y al presionar en el nombre de la empresa, abre la página de perfil de proyecto que tiene la información siguiente: Gas; Tipo de Gas; Empresa; CUIT; Provincia; Localidad; Monto del proyecto; Aporte local; Estado del proyecto; Proyecto (PDF descargable); Convenio (PDF descargable) (visibilidad: privada); Otra documentación (PDF descargable) (visibilidad: privada). Páginas a desarrollar HCFC-22: Informes del monitoreo: Arroja una lista de links con el título del informe correspondiente y a partir del cual se puede descargar el mismo. Visibilidad: privada. Estadísticas de Producción: Arroja una descripción y una tabla de producción por año, ej. 200.000tn. Visibilidad: Pública. HFC-23: Informes de generación: Arroja una descripción y una tabla de generación por año, ej. 200.000tn. Visibilidad: pública. Tecnología de destrucción: Descripción de las tecnologías actuales en Argentina. Visibilidad: Pública. Bromuro de Metilo: Informes de consumo: Arroja una descripción y una tabla de consumo por año, ej. 200.000tn. Visibilidad: pública. Uso: Descripción del uso del bromuro de metilo en Argentina y su necesidad. Visibilidad: pública. Sistema de licencias: Arroja un listado de descargables con las correspondientes asignaciones de licencias por año. Visibilidad: Pública. Consumos: Informes de consumo: Arroja una descripción y una tabla de consumo por año, ej. 200.000tn. Visibilidad: pública. Reporte desagregado: Reporte desagregado por año de los datos reportados, del sistema de licencias y de aduana. Visibilidad: Privada. Mitigación de Cambio Climático: Descripción del impacto en la mitigación del cambio climático realizada por la reconversión argentina. Eficiencia energética: Descripción de los ahorros en materia de eficiencia energética de la reconversión argentina. Páginas de carga de datos Proyectos: Formulario de carga de los siguientes datos. Visibilidad: Privado. Gas; Tipo de Gas; Empresa; CUIT; Provincia; Localidad; Monto del proyecto; Aporte local; Estado del proyecto; Proyecto (carga de PDF); Convenio (carga de PDF); Otra documentación (carga de PDF). HFCF-22: Formulario de carga de los siguientes datos. Visibilidad: Privado. Período: Trimestral / Semestral; Número del período: 1º, 2º, 3º o 4º; Reporte: Carga de PDF Consumos nacionales: Formulario de carga de los siguientes datos. Visibilidad: Privado. Año; Tipo de reporte: Aduana / Reporte Nacional / Sistema de licencias; Reporte: Carga de PDF. Producción de HCFC-22 / Generación de HFC-23 / Consumo de Bromuro de Metilo / Consumo de gases: Formulario con tira de casillas por año. Visibilidad: Privado. Sistema de licencias: Formulario de carga de los siguientes datos. Visibilidad: Privado. Año; Período: Asignación / Reasignación; Reporte: Carga de PDF. Tecnologías de destrucción / Uso del bromuro de metilo / Mitigación de CC / Generales: Carga de página simple. Visibilidad: Privado. Page 41 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) La plataforma de digitalización fue realizada correctamente según los Términos de Referencia acordados con resultados satisfactorios. Se realizó la digitalización de toda la documentación correspondiente a la cartera del Protocolo de Montreal y se volcaron a la web tal como estaba estipulado. La página web puede ser consultada por el público general, quienes pueden acceder a la información detallada en los TDR y por usuarios que, logueados, pueden acceder a toda la información subida. La web, a su vez, contiene una sección para el administrador desde la cual se puede modificar, agregar o quitar información fácilmente. COMPONENTE 5. Plan Sectorial de Espumas para la reducción de HCFC Habiendo recibido de parte del IBRD la notificación de que estaban dadas las condiciones para dar los pasos necesarios para iniciar la Fase II del HPMP y preparar la propuesta de Proyecto de Reducción de Consumo de HCFCs en el Sector Espumas, la misión de RMT se enfocó en dar los siguientes pasos: o Se hicieron reuniones con cada una de las siguientes System Houses (SH): BASF; DOW CHEMICAL; HUNSTMAN; QUÍMICA DEL CAUCHO; ALKANOS (asociada con UANUA); ECOPUR (representante de SKF); CHEMOURS (representante de Dupont); y POLIRESINAS SAN LUIS. o A todas ellas se les puso al tanto del compromiso adquirido por el país y se discutieron posibles modalidades de trabajo, particularidades en cuanto a las maneras que utilizan cada una de ellas para atender sus mercados, alcances y grado de detalles que se les requería a las SH, respuestas que se esperaba de ellas, tiempos disponibles y otros detalles del mismo orden. Se encontró en todas las SH muy buena predisposición para participar activamente tanto en términos del aporte de datos como de sugerir mecánicas o variantes para hacer más efectiva su participación. o Varias SH consultadas manifestaron haber establecido contactos con posibles proveedores de sustancias alternativas a los HCFCs y, hasta en al menos un caso, haber iniciado ensayos de prueba. o Entre los días 16 y 19 de agosto de 2016, en el marco de la Misión de Medio Término del IBRD, participó el Consultor Experto Miguel Quintero, con el cual se desarrolló la siguiente agenda: § Una reunión de trabajo con la OPROZ para tratar la preparación de la Fase II del HPMP, la parte del Sector Espumas como el conjunto de la Fase II; § La realización de un Evento Público en la entonces Secretaría de Industria organizado por la DNDSIN en el cual el Consultor Experto Miguel Quintero hizo una exposición detallada sobre “Opciones Técnicas para Reemplazo de HCFC- 141b en Espumas de Poliuretano”. Al evento concurrieron más de 50 representantes de empresas del sector espumas, de las SH y de Cámaras; la misma tuvo una duración de 4 horas entre la exposición en sí y los tiempos insumidos en aclarar las inquietudes de los presentes. § La realización de reuniones independientes en las oficinas del IBRD, con las SH (DOW, QUÍMICA DEL CAUCHO y HUNTSMAN). § Una visita a las instalaciones de otras dos SH, BASF y ALKANOS (en una planta recién inaugurada). Ambas firmas hacen sus propios formulados. § Visita a la empresa CELPACK Como resultado de los pasos antes señalados, se pudieron esbozar los puntos principales de la mecánica que se Page 42 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) emplearía para recolectar los datos básicos que se requieren para preparar la propuesta de proyecto presentado al Comité Ejecutivo del FML (ExCom). Se fue recibiendo la información por parte de las diferentes SH, información que fue remitida al Experto Miguel Quinteros a medida que se la disponía, lo cual permitió ir preparando el proyecto presentado. Del 26 al 30 de septiembre de 2016 se realizó una segunda misión con la presencia del Consultor Experto Miguel Quintero en la que se trabajó en detalle con cada casa de sistemas la mecánica de trabajo de los proyectos trabajos, se indicó la información que debían enviar y se elaboraron listados de empresas que formarían parte del proyecto. A su vez, se realizaron reuniones individuales con las empresas Friostar, Argenpur, Rheem, Comenco y Stefanelli. El trabajo de la UEPRO fue guiado y seguido de cerca por el Banco en todas las misiones realizadas y durante todo el proceso de recolección de información y armado de proyectos, siendo esta última una tarea llevada a cabo por el Banco Mundial. Durante la 79° reunión del Comité Ejecutivo del Fondo Multilateral se llevó adelante la negociación de la etapa II del HPMP de Argentina, el cual incluyó el proyecto de reconversión del sector de espumas de poliuretano y XPS, elaborado durante el primer semestre de 2017. Para el desarrollo del proyecto se relevaron más de 200 empresas registradas en el sistema de licencias de importación de HCFC, a las cuales se les invitó a participar. Se elaboraron 7 proyectos paraguas y 4 proyectos individuales nucleando en total 143 empresas. Durante la negociación se logró la aceptación de una de las empresas rechazadas, BRIKET, se elevó el costo incremental ofrecido en un primer momento de USD 8,60 a USD 9,12 y el máximo de USD 5 para las empresas de más de 20 tn. Se logró aumentar el aporte a la unidad ejecutora para la gestión del proyecto del 5 al 8%. Se defendió la situación de la empresa CELPACK que dada la antigüedad de su máquina actual (ya amortizada) sólo era elegible para un porcentaje del valor del nuevo equipo por resoluciones del Comité Ejecutivo. Finalmente, consiguiendo el apoyo de la Secretaría del Fondo Multilateral, el Comité Ejecutivo aprobó el proyecto por un monto de 6.050.168 millones de dólares. Page 43 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) ANNEX 7. SUPPORTING DOCUMENTS (IF ANY) Argentina Country Partnership Strategy 2015-2018, the World Bank: http://documents.worldbank.org/curated/en/846861468210572315/Argentina-Country-partnership-strategy- for-the-period-of-FY2015-18 Argentina HCFC Phase-out Management Plan (HPMP) Phase I and II Montreal Protocol: https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVII-2- a&chapter=27&lang=en Second Phase of the Evaluation of Chiller Projects with Co-Funding Modalities: Mission Report – Field Visit to Argentina, 31 July – 4 August 2017, Ranojoy Basu Ray The Montreal Protocol and the Green Economy (2012): https://www.unenvironment.org/resources/report/montreal-protocol-and-green-economy-assessing- contributions-and-co-benefits Page 44 of 46 The World Bank Montreal Protocol Hydrochlorofluorocarbons (HCFC) Phase-out Project (P129397) Page 45 of 46