Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) China HCFC Phase-Out Project (Stage I) (P115561) EAST ASIA AND PACIFIC | China | Environment & Natural Resources Global Practice | Montreal Protocol | Specific Investment Loan | FY 2013 | Seq No: 7 | ARCHIVED on 20-Jun-2016 | ISR23985 | Implementing Agencies: FOREIGN ECONOMIC COOPERATION OFFICE (FECO) Key Dates Key Project Dates Bank Approval Date:22-Nov-2012 Effectiveness Date:04-Jan-2013 Planned Mid Term Review Date:31-Dec-2015 Actual Mid-Term Review Date:12-Oct-2015 Original Closing Date:31-Dec-2017 Revised Closing Date:31-Dec-2017 Global Environmental Objectives Global Environmental Objective (from Project Appraisal Document) The project development objective is to reduce HCFC production and HCFC-141b consumption in the polyurethane (PU) foam sector in order to contribute to the Government of China's endeavor to comply with its Montreal Protocol phase-out obligations for HCFCs by 2015,as well as to reduce emissions of GHG from the production and PU foam sectors. Has the Global Environmental Objective been changed since Board Approval of the Project Objective? No Components Name Investment in HCFC Production Reduction:(Cost $85.00 M) Technical Assistance and Policy Support:(Cost $11.10 M) Investment in HCFC 141-B Consumption Reduction in the Polyurethane (PU) Foam Sector:(Cost $63.00 M) Project Management:(Cost $8.40 M) Preparation of HCFC Phaseout Activities Post 2015 Overall Ratings Name Previous Rating Current Rating Progress towards achievement of GEO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Moderate  Moderate 6/20/2016 Public Disclosure Copy Page 1 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) Implementation Status and Key Decisions Project implementation is progressing well. China is in compliance with the maximum allowable limits set for 2013 and 2014 for both production and consumption of HCFCs, and is expected to have met the allowable limits for 2015 as well (independent verification is underway). Reduction in greenhouse gas emissions has already exceeded targets set for the production sector and is roughly on schedule in the consumption sector. Funding for conversion and phase-out subprojects is fully committed. To date, 11 conversion subprojects in the foam sector are completed, 18 have carried out conversions and are awaiting final environmental and fire safety approval before resuming production and being counted as formally completed, and 31 are still underway. Although the number of enterprises implementing subprojects in the PU foam sector is lower than expected, the average conversion amount is greater and the total HCFC phase-out is expected to be higher than originally planned. Technical assistance activities supporting China's overall HCFC Phase-out Management Plan are slightly behind schedule and will be the focus of renewed implementation effort going forward. This delay has not affected the progress of other key investments or the likely achievement of the objectives. 6/20/2016 Public Disclosure Copy Page 2 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) 6/20/2016 Public Disclosure Copy Page 3 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Low  Low Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Low  Low Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Moderate  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Substantial  Substantial Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Moderate  Moderate Results Global Environmental Objective Indicators PHINDGEOTBL  Consumption of HCFC141B within Maximum Allowable Limits in 2013 and 2015(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5,393 ODP tons 5155 ODP tons 4450 ODP tons 4,450 ODP tons Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 01-Jan-2016 Comments As per the preliminary information, the consumption of HCFC-141b in the PU Foam Sector was 4,450 ODP tons in 2015. An independent 6/20/2016 Public Disclosure Copy Page 4 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) verification of both 2015 production and consumption was launched in May 2016. The final confirmation is expected in August 2016. PHINDGEOTBL  Production of HCFC 141B, HCFC 142B and HCFC 22 within maximum allowable limits in 2013 and 2015(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 29,122 ODP tons 27180.96 ODP tons 21,685 ODP tons 26,210 ODP tons Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 01-Jan-2016 Comments The preliminary data indicates that the 2015 production of all HCFCs in China was 21,685 ODP tons. This represents an accelerated phase- out of more than 4,000 ODP tons against the target. An independent verification for both 2015 production and consumption was launched in May 2016. The final confirmation is expected in August 2016. PHINDGEOTBL  Reduction of GHG Emission from the PU Foam Sector(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6.5 million tCO2e 7.5 million tCO2e 11 million tCO2e n/a (tonnes of CO2 (tonnes of CO2 (tonnes of CO2 equivalent) equivalent) equivalent) Date -- 29-Nov-2015 06-Jun-2016 31-Dec-2016 Comments The reduction of GHG emission of 7.5 million tCO2 equivalent is the result of the direct replacement of 9,682 MT of HCFC-141b with cyclo- pentane and water technologies. The current reduction amount puts the project on track to meet its end-of-project target. 6/20/2016 Public Disclosure Copy Page 5 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) PHINDGEOTBL  Reduction of GHG from the Production Sector(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 67 million tCO2 63 million tCO2e 67 million tCO2 (tonnes n/a (tonnes of CO2 (tonnes of CO2 of CO2 equivalent) equivalent) equivalent) Date -- 29-Nov-2015 06-Jun-2016 31-Dec-2016 Comments The reduction of GHG emission from the production sector of 67 million tCO2 equivalent is the level achieved in 2014. The figure will be updated when the verification report of 2015 production is available in August 2016 when actual production of each HCFC is available. Overall Comments Intermediate Results Indicators PHINDIRITBL  Number of enterprises covered by contracts (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 60.00 60.00 100.00 Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 31-Dec-2017 Comments The number of enterprises covered by contracts remains unchanged from the previous ISR as the total fund available for this Component has been fully committed. Although the number of enterprises will be lower than the initial target, since the average conversion amount is greater this will not limit the project's achievement of its HCFC reduction targets. PHINDIRITBL  Number of phaseout contracts signed with HCFC producer (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.00 12.00 15.00 Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 31-Dec-2017 Comments The number of phase-out contracts signed with HCFC producers remains unchanged from the previous ISR. With the 12 contracts, China will be able to meet their production phase-out target. China requested an amendment to the grant agreement in May 2016. One of the objectives is to reallocated funds of $3 million from Component 3 of the project to support additional contracts with HCFC producers. Bidding for the new contracts is expected to take place by end of the calendar year 2016. 6/20/2016 Public Disclosure Copy Page 6 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) PHINDIRITBL  Implementation of key policies and regulations (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target For the production For the production sector, quotas have sector, quotas have been established for been established for each of the 28 each of the 28 Non-HCFC enterprises. enterprises. Foam product Value n/a safety/standard Regulation quotas for Regulation quotas for s 2013 and 2015 have 2013 and 2015 have been issued for the been issued for the consumption and consumption and production sectors. production sectors. Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 30-Dec-2017 Comments The result indicators for key policies and regulations consist of three elements: 1. Production quota system - This has already be put in place; 2. Ban the use of HCFC-141b in the three targeted sub-sectors - Recommendations for the proposed ban submitted to MEP. Public consultation on the proposed ban will be held in the second half of the calendar year 2016 and will be put in place in early 2017; 3. Non-HCFC foam standards - Standards will be endorsed by end of the calendar year 2016. PHINDIRITBL  Compliance with project reporting requirements (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 31-Dec-2017 6/20/2016 Public Disclosure Copy Page 7 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) PHINDIRITBL  Project Progress reports prepared (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 12-Nov-2012 29-Nov-2015 06-Jun-2016 31-Dec-2017 Comments Semi-annual progress reports were timely submitted to the Bank. Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P115561 TF-13143 Effective USD 168.30 168.30 0.00 140.39 27.91 83% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P115561 TF-13143 Effective 28-Nov-2012 28-Nov-2012 04-Jan-2013 31-Dec-2017 31-Dec-2017 Cumulative Disbursements 6/20/2016 Public Disclosure Copy Page 8 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report China HCFC Phase-Out Project (Stage I) (P115561) Restructuring History Level 2 Approved on 04-Sep-2013 ,Level 2 Approved on 17-Apr-2015 Related Project(s) P160651-China HCFC Stage I (Additional Financing) 6/20/2016 Public Disclosure Copy Page 9 of 9