Document of The World Bank Report No: ICR00002945 IMPLEMENTATION COMPLETION AND RESULTS REPORT (TF-21926) ON A OZONE PROJECTS TRUST FUND GRANT IN THE AMOUNT OF US$45.0 MILLION TO THE KINGDOM OF THAILAND FOR A MONTREAL PROTOCOL OZONE DEPLETING SUBSTANCES PHASE-OUT MULTI-COMPONENT PROJECT June 24, 2014 Southeast Asia Sustainable Development Department Southeast Asia Country Management Unit East Asia and Pacific Region CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2013) Currency Unit = Baht (THB) US$ 1.00 = THB 32.75 FISCAL YEAR October 1 – September 30 ABBREVIATIONS AND ACRONYMS ATC Authorized Training Center AWP Annual Work Program BWP Biennial Work Program CAS Country Assistance Strategy CE Cost Effectiveness CFC Chlorofluorocarbon CO2 Carbon Dioxide CP (Montreal Protocol) Country Program CTC Carbon Tetrachloride DIW Department of Industrial Works DLT Department of Land Transport DOA Department of Agriculture DSD Department of Skill Development EA Environmental Assessment ERR Economic Rate of Return ExCom Executive Committee of the Montreal Protocol FA Financial Agent FDA Food and Drug Administration FM Financial Management FRR Financial Rate of Return GA Grant Agreement GC Group Coordinator GEO Global Environment Objective GSB Government Savings Bank GWP Global Warming Potential HCFC Hydrochlorofluorocarbon HPMP HCFC Phase-out Management Plan IA Implementing Agency ICR Implementation Completion and Results Report IFCT Industrial Finance Corporation of Thailand IPM Integrated Pest Management IS Institutional Strengthening ISR Implementation Status and Results Report M&E Monitoring and Evaluation MAC Mobile Air-Conditioning MB Methyl Bromide MIS Management Information System MLF Multilateral Fund of the Montreal Protocol MOA Memorandum of Agreement MOD Memorandum and Recommendation of the Director MOF Ministry of Finance MP Montreal Protocol MT Metric Ton MTR Mid-Term Review NCFCP National CFC Phase-out Plan NMBPP National Methyl Bromide Phase-out Plan NOU National Ozone Unit NPV Net Present Value OARD Office of Agricultural Research and Development ODP Ozone Depleting Potential ODS Ozone Depleting Substance OORG Ozone Operations Resource Group OPG Operation Policy Guidelines OTF (World Bank) Ozone Projects Trust Fund OVEC Office of Vocation Education Commission PAD Project Appraisal Document PCR Project Completion Report PDO Project Development Objective PMP Pest Management Plan PMU Project Management Unit QAG Quality Assurance Group (of the Bank) QALP Quality Assessment of Lending Portfolio QEA Quality at Entry QPS Quarantine and Pre-Shipment QSA Quality at Supervision R&R Recovery and Recycling RTG Royal Thai Government SCBA Self-Contained Breathing Apparatus SME Small and Medium Enterprise TA Technical Assistance TCA 1,1,1-trichloroethane THTI Thailand Textile Institute TMB Thai Military Bank UNDP United Nations Development Programme UNEP United Nations Environment Programme Vice President: Axel van Trotsenburg, EAPVP Country Director: Ulrich Zachau, EACTF Sector Manager: Julia M. Fraser, EASTS Project Team Leader: Waraporn Hirunwatsiri, EASTS ICR Team Leader: Thanavat Junchaya, CCGIA KINGDOM OF THAILAND MONTREAL PROTOCOL OZONE DEPLETING SUBSTANCES PHASE-OUT MULTI-COMPONENT PROJECT CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Global Environment Objectives and Design ............................................ 1 2. Key Factors Affecting Implementation and Outcomes ....................................................... 6 3. Assessment of Outcomes ................................................................................................... 15 4. Assessment of Risk to Development Outcome ................................................................. 21 5. Assessment of Bank and Borrower Performance .............................................................. 21 6. Lessons Learned ................................................................................................................ 25 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ................... 26 Annex 1. Project Costs and Financing ..................................................................................... 28 Annex 2. Outputs by Component.............................................................................................. 29 Annex 3. Economic and Financial Analysis ............................................................................. 48 Annex 4. Bank Lending and Implementation Support/Supervision Processes ......................... 50 Annex 5. Beneficiary Survey Results ....................................................................................... 53 Annex 6. Stakeholder Workshop Report and Results ............................................................... 55 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ................................. 56 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ................................... 65 Annex 9. List of Supporting Documents................................................................................... 66 MAP A. Basic Information TH OZONE Country: Thailand Project Name: DEPLETING SUBS Project ID: P004649 L/C/TF Number(s): TF-21926 ICR Date: 06/19/2014 ICR Type: Core ICR GOVT OF Lending Instrument: SIL Borrower: THAILAND Original Total USD 40.00M Disbursed Amount: USD 35.53M Commitment: Revised Amount: USD 45.00M Environmental Category: B Global Focal Area: O Implementing Agencies: Ministry of Industry, Department of Industrial Works Ministry of Agriculture and Cooperatives, Department of Agriculture Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 11/05/1991 Effectiveness: 06/07/1995 12/31/1997 01/05/2000 12/27/2002 Appraisal: 11/08/1993 Restructuring(s): 12/26/2003 10/04/2005 03/13/2009 11/18/2010 20/09/2006 Approval: 08/02/1994 Mid-term Review: 01/28/2013 Closing: 12/31/1999 12/31/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Global Environment Outcome Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No Satisfactory at any time (Yes/No): (QEA): Problem Project at any Quality of No Satisfactory time (Yes/No): Supervision (QSA): GEO rating before Satisfactory Closing/Inactive status D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 19 Other industry 100 81 Theme Code (as % of total Bank financing) Environmental policies and institutions 19 Pollution management and environmental health 100 81 E. Bank Staff Positions At ICR At Approval Vice President: Axel van Trotsenburg Callisto E. Madavo Country Director: Ulrich Zachau Callisto E. Madavo Sector Manager: Julia M. Fraser Vineet Nayyar Project Team Leader: Waraporn Hirunwatsiri Nadereh Chamlou ICR Team Leader: Thanavat Junchaya ICR Primary Author: Thanavat Junchaya F. Results Framework Analysis Global Environment Objectives (GEO) and Key Indicators(as approved) The overall objective of the Project was to assist the Recipient in carrying out its Country Program so as to phase-out the use of ozone depleting substance (ODS) within its territory through, inter alia: (a) the introduction of appropriate technology measures; (b) the institutional strengthening of responsible governmental entities; and (c) the implementation of specific cost- effective priority investments to reduce consumption of ozone depleting substances. This project was an integral part of international activities which have been undertaken since 1987 to reverse the damage to the Ozone layer. It is anticipated that this process will take sixty to seventy years to complete. However, there is reason to assume that the global development objective will be met, even though it is in the very distant future. Revised Global Environment Objectives (as approved by original approving authority) and Key Indicators and reasons/justifications The revised GEO of the Project was to assist the Recipient in carrying out its Country Program so as to phase-out ODS consumption within its territory. The reason for revision of the GEO was the project implementation modality shifted from sub- project-by-sub-project to sector plan. (a) GEO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Reduction of CFCs, halons, TCA and carbon tetrachloride consumption (ODP Indicator 1 : tons). Value (quantitative or 0 3,000-4,000 7,524.3 7,524.3 Qualitative) Date achieved 12/31/1994 12/31/1997 01/01/2010 01/01/2010 100% achieved as per revised GEO and remained zero from 2010 onwards. The Comments project’s target was revised to completely phaseout consumption of CFCs, (incl. % halons, TCA and carbon tetrachloride by January 1, 2010 through the grant achievement) amendment in 2002. Indicator 2 : Reduction of methyl bromide for non-QPS consumption (ODP tons). Value (quantitative or 0 n/a 241.8 241.8 Qualitative) Date achieved 12/31/2002 12/31/2002 01/01/2013 01/01/2013 Comments 100% achieved as per revised GEO and remained zero from 2013 onwards. The (incl. % RTG phased out the consumption of methyl bromide for non-QPS application by achievement) January 1, 2013, two years ahead of the Montreal Protocol phase out schedule). (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Pre-NCFCP: Number of sub-projects and ODS phased out in ODP Tons 44-55 sub-projects 52 sub-projects with ODS with ODS phase- Value phaseout of 3,000- out of 2,377.68 (quantitative or 7,524.3 4,000 ODP tons ODP tons from pre- Qualitative) from pre-NCFCP NCFCP sub- sub-projects. projects. Date achieved 12/31/1994 12/31/1997 09/30/2010 Comments The actual phaseout was 79% and 59% of the original lower and upper targets, (incl. % respectively. However, full phaseout was achieved under the implementation of achievement) NCFCP through import quota control. NCFCP: Compliance with yearly maximum allowable consumption in agreement Indicator 2 : between Thailand and the Executive Committee Compliance with maximum The RTG could allowable fully meet all Value 3,108 ODP tons of CFCs, consumptions for reduction schedules (quantitative or TCA and carbon CFCs, TCA and during 2002-2010 Qualitative) tetrachloride in 2002. carbon under this tetrachloride Agreement. during 2002-2010. Date achieved 12/31/2002 01/01/2010 01/01/2010 Comments (incl. % Fully comply (please refer to GEO indicator 1) achievement) Indicator 3 : NCFCP: Import Control Policy Import control has been Value Import control The Hazardous put in place under (quantitative or policy put in place Substances Act has Hazardous Substance Act Qualitative) and operational. been enforced. since 1995. Date achieved 12/31/2002 12/31/2002 12/31/2002 Comments (incl. % Fully achieved. The import control policy has been implemented until now. achievement) Indicator 4 : NCFCP: Ban the use of CFCs in the manufacturing sector Ban on the use of CFCs and TCA in Ban the use of Value all manufacturing CFCs in all (quantitative or None sectors has been manufacturing Qualitative) established and sectors. enforced since 2005. Date achieved 12/31/2002 12/31/2005 09/30/2005 Comments Fully achieved and exceeded the target because TCA was added in the regulation (incl. % under a list of banned chemicals. achievement) Indicator 5 : NCFCP: Announcement of Import Quota Import quota for Value Import quota from CFCs during (quantitative or None 2002-2010 has been 2002-2010 is Qualitative) announced. announced. Date achieved 12/31/2002 12/31/2003 12/31/2003 Comments (incl. % Achieved on time. achievement) NCFCP: Strengthening capacity of the programme management unit of the sector Indicator 6 : plan of NCFCP Operation of the Project Management Unit (PMU) to plan, The PMU was fully Value implement and operational through (quantitative or None monitor the the life of the Qualitative) implementation of project. NMBPP until the project closing date. Date achieved 12/31/2002 12/31/2010 12/31/2013 Comments (incl. % Achieved. achievement) IS: Strengthening capacity of the Department of Industrial Works to perform the Indicator 7 : role of the National Ozone Unit (NOU) The IS project supported for the Continue the operation of NOU implementation of to fulfill obligations Value The NOU operated with the IS project to under the Montreal (quantitative or support from the IS perform the role of Protocol, i.e. Qualitative) project. NOU until the reporting project closing requirements, date. attending international conferences. Date achieved 12/31/2002 12/31/2010 12/31/2013 Comments Fully achieved. The project assisted Thailand to receive five renewals of the IS (incl. % project. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. GEO IP Disbursements Archived (USD millions) 1 09/16/1994 Satisfactory Satisfactory 0.00 2 02/07/1996 Satisfactory Satisfactory 4.00 3 09/13/1996 Satisfactory Satisfactory 4.20 4 06/30/2000 Satisfactory Satisfactory 17.98 5 12/25/2000 Satisfactory Satisfactory 19.08 6 06/13/2001 Satisfactory Satisfactory 19.51 7 12/20/2001 Satisfactory Satisfactory 20.27 8 06/28/2002 Satisfactory Satisfactory 20.48 9 12/30/2002 Satisfactory Satisfactory 21.14 10 06/20/2003 Satisfactory Satisfactory 21.54 11 11/26/2003 Satisfactory Satisfactory 21.61 12 12/15/2003 Satisfactory Satisfactory 21.61 13 04/16/2004 Satisfactory Satisfactory 20.84 14 12/22/2004 Satisfactory Satisfactory 21.70 15 06/06/2005 Satisfactory Satisfactory 22.82 16 12/27/2005 Satisfactory Satisfactory 24.42 17 05/30/2006 Satisfactory Satisfactory 25.77 18 06/27/2007 Satisfactory Satisfactory 29.07 19 06/30/2008 Satisfactory Satisfactory 31.82 20 04/25/2009 Satisfactory Moderately Satisfactory 32.54 21 06/29/2010 Satisfactory Moderately Satisfactory 34.73 22 06/26/2011 Satisfactory Moderately Satisfactory 35.16 23 04/16/2012 Satisfactory Moderately Satisfactory 35.39 24 04/25/2013 Satisfactory Moderately Satisfactory 35.73 25 12/30/2013 Satisfactory Moderately Satisfactory 35.94 H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made GEO Change GEO IP in USD millions Extend closing date 2 years to 12/31/1997 S S 10.35 allow more time for implementation of subprojects Extend closing date 4 years to 01/05/2000 S S 17.23 allow more time for implementation of subprojects 12/27/2002 S S 21.14 Extend closing date 6.5 years to ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made GEO Change GEO IP in USD millions accommodate implementation of NCFCP, revise GEO; and increase the grant ceiling to US$45 million. Channel grant funds for Part B 12/26/2003 S S 19.73 of the project directly to DIW Extend closing date 3 years to 10/04/2005 S S 23.59 accommodate implementation of NMBPP Extend closing date 6 months 03/13/2009 S S 32.36 and reallocate grant funds, revise disbursement percentages Extend closing date 3 years for 11/18/2010 S MS 34.69 implementation of remaining NCFCP activities I. Disbursement Profile 1. Project Context, Global Environment Objectives and Design 1.1 Context at Appraisal The Montreal Protocol The Montreal Protocol on Substances that Deplete the Ozone Layer (MP) was adopted in 1987 in response to growing global recognition that concerted international action was required to protect the earth’s ozone layer, a stratospheric level filter that shields the earth and protects human and ecosystem health from the sun’s dangerous ultraviolet radiation. The Royal Thai Government (RTG) acceded to the Montreal Protocol on July 7, 1989 and has since ratified the Protocol’s four subsequent amendments. Thailand was classified as a country operating under Article 5(1) of the MP and became eligible for technical and financial assistance from the Multilateral Fund for the Implementation of the Montreal Protocol (MLF). Thailand neither produced nor exported any of the ozone depleting substances (ODS) controlled under the MP. Total demand for all controlled chemicals was met through imports. Due to Thailand’s fast economic growth, its ODS consumption increased by 23% p.a. between 1986 and 1990. In 1991, Thailand consumed 15,600 tons of ODS, equivalent to an Ozone Depleting Potential (ODP) of 10,040 tons. The MP established time-bound targets to reduce the production and consumption of various ODS including: (i) chlorofluorocarbons (CFCs) used in refrigeration, aerosol, solvents, and foam applications; (ii) halons used in fire protection; (iii) carbon tetrachloride (CTC) used as a cleaning agent; (iv) methyl chloroform (1,1,1-trichloroethane or TCA) used as an industrial solvent; and (v) methyl bromide used in fumigation. The reduction and phase-out targets of ODS consumption1 addressed under this project are summarized in Table 1. Table 1: MP Phase-out Obligations of ODS Consumption Addressed under this Project % Reduction from Baseline Chemicals Baseline 1999 2002 2003 2005 2007 2010 2015 CFCs 1995-1997 Freeze 50% 85% 100% Halons 1995-1997 Freeze 50% 100% Carbon Tetrachloride 1998-2000 85% 100% Methyl Chloroform 1998-2000 Freeze 30% 70% 100% Methyl Bromide 1995-1998 Freeze 20% 100% In order to receive financial assistance from the MLF, the Department of Industrial Works (DIW), the country’s focal point on MP, prepared a Country Program (CP) with Bank assistance. Approved by the Multilateral Fund Executive Committee (ExCom) in November 1993, the CP outlined policies and actions to enable Thailand to maintain compliance with the MP phase-out targets, provided that sufficient funds to support incremental costs and the technologies required to achieve a sustainable transition to alternatives were made available. 1 Montreal Protocol definition: consumption = import – export + production 1 Rationale for World Bank Support to Thailand’s ODS Phase-out Objectives The World Bank is one of the three implementing agencies2 that were initially requested by the Parties to the MP to serve as an implementing agency to channel financial and technical support from the Multilateral Fund (MLF) of the MP to Parties operating under Article 5, paragraph 1, of the MP. One of the key strategic components of the Country Programme was conversion of ODS technology to ozone-friendly technology in the relevant sectors. A number of investment sub- projects were approved by the ExCom to Thailand to be implemented through agencies such as the Bank. The Bank’s focus on economic development, while ensuring environmental sustainability, placed it in a good position to support ODS phase-out, where sustained and sustainable industrial expansion would need to include environmental considerations. The Project was consistent with Thailand Country Assistance Strategy (CAS, Report No. 13458-TH dated August 9, 1994), in particular, the fourth pillar on “Improvement in environmental and natural resource management”. The CAS specifically mentioned that an ODS phase-out project was under preparation to support this pillar. Moreover, the project was in line with the 7th National Economic and Social Development Plan (NESDP) 1992-1996. The NESDP aimed to address the global climate change impacts attributed to increasing deforestation and CFC consumption used in the industrial sectors. Therefore, this project was designed to assist Thailand to support the implementation of the 7th NESDP. 1.2 Original Global Environment Objectives (GEO) and Key Indicators (as approved) The project objective as stated in the Memorandum and Recommendation of the Director (MOD) was “to support the Government program to phase out ODS by (a) establishing an efficient mechanism for executing ODS phase out projects through local institutions, and (b) implementing an initial group of cost effective priority subprojects.” The indicators identified by the MOD were the number of completed sub-projects (45-55) and expected ODS consumption reduction of 3,000-4,000 ODP tons. The overall objective of the Project (as expressed in Schedule 2 of the 1994 Grant Agreement) was to assist the Recipient in carrying out its Country Program so as to phase-out the use of ozone depleting substance (ODS) within its territory through, inter alia: (a) the introduction of appropriate technology measures; (b) the institutional strengthening of responsible governmental entities; and (c) the implementation of specific cost-effective priority investments to reduce consumption of ozone depleting substances. For the purpose of the ICR, the GEO of the Grant Agreement (GA) will be used to assess the achievement of the Project. 2 United Nations Development Programme (UNDP), United Nations Environmental Programme (UNEP) and the World Bank were the first three agencies requested by the Parties to the MP to serve as implementing agencies of the MLF. United Nations Industrial Development Organization (UNIDO) was included as another implementing agency at the Fourth Meeting of the Parties in 1992. 2 1.3 Revised GEO (as approved by original approving authority) and Key Indicators, and reasons/justification The revised GEO of the Project was to assist the Recipient in carrying out its Country Program so as to phase-out ODS consumption within its territory. The GEO was revised as part of the 2002 project restructuring to reflect a shift in the project implementation modality from sub-project-by-sub-project to a sector plan. (National CFC Phase out project - NCFCP) 1.4 Main Beneficiaries The beneficiaries of the Project, as originally conceived, were local enterprises introducing ODS- friendly technologies. The Department of Industrial Works (DIW) and the Project’s financial agent, Industrial Finance Corporation of Thailand (IFCT), were in charge of implementing the Project. DIW and IFCT would benefit from capacity building related to large-scale project management. National ODS-using enterprises would receive financing to cover incremental costs of conversion from ODS to ODS-friendly technologies. The bulk of eligible enterprises included manufacturers of foam, household and commercial refrigeration equipment, and mixed technology circuit card assemblies used in electronics applications. Following the inclusion of the multi-year National CFC Phase-out Plan (NCFCP) in 2002 and National Methyl Bromide Phase-out Plan (NMBPP) in 2005: i. Additional small and medium-size enterprises (SMEs) in the aerosol, foam, and solvent (garment and textile, and manufacturing) sectors benefitted from training and subsidies provided for technological conversion; ii. Owners of storage facilities and commercial fumigators benefitted from training, subsidies for modification of existing facilities, and received fumigation and pest management equipment; iii. The Department of Land Transport (DLT), Department of Skill Development (DSD), Office of Agricultural Research and Development (OARD), Customs Department, Office of Vocational Education Commission (OVEC) and other local training institutes benefitted from training of trainers and received training equipment; iv. Other national government agencies including Thailand Textile Institute (THTI), Allergy and Immunology Society of Thailand, Food and Drug Administration (FDA), and various government units, benefitted from institutional strengthening and inter-institutional coordination, which allowed them to contribute to the sustainable phase-out of ODS in Thailand; v. Capacity-building for the Department of Agriculture (DOA), the focal point of NMBPP, and the Government Savings Bank (GSB), the Project’s second financial agent, was financed by the Project; and vi. Institutional strengthening benefitted the DIW’s National Ozone Unit to fulfill Thailand’s obligations under the Montreal Protocol to collect, monitor and report data on ODS import and export. Finally, as beneficiary enterprises produced primarily consumer goods, consumers benefitted from higher quality products. 1.5 Original Components (as approved) 3 The original Project had only one part (as expressed in Schedule 2 of the GA) which was the provision of sub-grant agreements for carrying out the implementation of sub-projects. As deduced from the GEO, the subprojects would include activities to introduce appropriate technology measures; carry out institutional strengthening of responsible governmental entities; and implement specific cost-effective priority investments to reduce consumption of ODS. Annex I of the MOD provided list of sub-projects with 12 already pre-appraised, two under preparation, and another 12 that had been identified. An additional 40 sub-projects were added to the Project during the period 1994-2001. These sub-projects will be referred to as “pre-NCFCP” sub- projects. 1.6 Revised Components During the project preparation, the number of identified sub-projects was below the expected number of sub-projects to be financed under the GA (45-55 sub-projects). Therefore, the original GA was designed as an umbrella grant agreement, under which any additional sub-projects approved by the ExCom after signing of the GA could be financed from the GA. The adoption of an umbrella approach was conceived to facilitate the processing and management of multiple sub- projects under a single GA. The original ceiling of the GA was US$40 million. The GA was amended to accommodate implementation of the NCFCP and the Institutional Strengthening (IS) project in 2002, and the NMBPP in 2005. The grant ceiling was increased from US$40 million to US$45 million. While the original Project focused only on the provision of sub-grant agreements to support large manufacturing enterprises to convert from ODS to ODS- friendly technologies, the NCFCP and NMBPP had a significantly larger scope as both employed a comprehensive approach to phase out the remaining use of ODSs within a specific target date. NCFCP was the first national plan approved by the ExCom for which funding spanned multiple years. Funds were released in tranches upon independent verification of the country’s achievement of the agreed targets. o National CFC Phase-out Plan (NCFCP). The ExCom approved the NCFCP in December 2001 with a funding envelope of US$14.7 million for phasing out the remaining consumption of CFCs, carbon tetrachloride and TCA (1,1,1-trichloroethane) by January 1, 2010. The remaining consumption of these ODSs were used by hundreds or even thousands of small and medium-size enterprises and service shops. Because each enterprise or service shop is entitled to a much smaller assistance from the MLF as its consumption of ODS was very small, costs of processing small sub-grants incurred by financial agents outpaced the fee income provided by the Project. Hence, a new implementation approach was needed to reduce transaction costs. In 2010, Article 5 Parties including Thailand were, for the first time, subject to a control measure of the MP. Therefore, timely completion of phase-out activities was required in order to contribute to Thailand’s effort to meet the obligations of the MP. To ensure timely completion of activities, policy and regulatory incentives became increasingly important. The Project, therefore, introduced a combination of policy and regulatory measures, public awareness and training, and capacity building and technical assistance, as an integral part of the NCFCP. o National Methyl Bromide Phase-out Plan (NMBPP). The ExCom approved a funding envelope of US$2.9 million for supporting the implementation of NMBPP in December 2004. The NMBPP contained a number of investments, technical assistance, and capacity building activities designed to eliminate the consumption of Methyl Bromide (MB) by 2013, two years ahead of its required phase-out date under the Protocol. 4 o Institutional Strengthening (IS) Project. Thailand had received funding from the MLF to support the operation of the National Ozone Unit (NOU) to implement the MP under MLF program called the “Institutional Strengthening Project” since 1992. The NOU was established in 1992 within DIW. The United Nations Development Programme (UNDP) was the implementing agency (IA) of the IS at that time until the approval of the ExCom at its 35th Meeting; then the IS project was transferred from UNDP to the Bank upon the request of DIW. A list of activities under NCFCP and NMBPP and brief descriptions are provided in Annex 2. To accommodate the implementation of NCFCP and NMBPP activities, two additional components were added to the project as expressed in Schedule 2 of the amended GA of 2002 and 2005 respectively. Therefore, the three components included: Part A: Sub-grants: The implementation of NCFCP and NMBPP involved a wide range of enterprises, with different implementation capacities, and sub-project implementation took these different capacities into account. Part A of the project was amended to accommodate the implementation of NCFCP and NMBPP. Micro enterprises that did not have the capacity to implement the sub-project themselves were bundled into a group of sub-projects assisted by a group coordinator (GC). The GC is a private firm, who was selected by DIW and DOA in accordance with the World Bank’s Guidelines on Selection and Employment of Consultant to coordinate with these micro enterprises during the sub-project implementation. Part B: Strengthening of the Program Management Unit (PMU) of the Sector Plans: This component was added for NCFCP in the 2002 amendment and NMBPP in the 2005 amendment to strengthen the implementation capacity of the PMU in DIW and DOA through the provision of equipment, consultants’ services and training. This allowed the PMUs to prepare, plan, implement, monitor and enforce regulations. This component also covered capacity building of selected government agencies involved in the implementation of NCFCP and NMBPP. Part C: Institutional Strengthening: The component was added in the 2002 amendment to strengthen capacity of the NOU to fulfill the obligations of Thailand including monitoring of ODS consumption and submission of its ODS consumption to the Ozone Secretariat as per Article 7 of the MP. 1.7 Other Significant Changes The table below summarizes the various amendments made to the GA during implementation. Amendment date Closing Date Extensions Additional Justification From To Dec 31, 1997 Dec 31, 1997 Dec 31, 1999 Allow for the implementation of new sub-projects Jan 5, 2000 Dec 31, 1999 Dec 31, 2003 Allow for the implementation of new sub-projects Dec 27, 2002 Dec 31, 2003 Jun 30, 2010 Accommodate implementation of NCFCP and IS from 2002-2010. Part B and Part C of the project, to be implemented by DIW, added to the Grant Agreement. Grant ceiling was increased 5 to US$45 million. GSB added as Financial Intermediary for part A of the project. Dec 26, 2003 - - Channel grant funds for Part B of the project directly to DIW. Oct 4, 2005 Jun 30, 2010 Dec 31, 2013 Accommodate implementation of NMBPP from 2005-2013 (applicable only to NMBPP activities). DOA was added as an implementing agency for Part B of the project. Mar 13, 2009 Jun 30, 2010 Dec 31, 2010 Reallocate grant funds, revise percentage of expenditures to be financed and extend disbursements to all project activities (other than NMBPP) Nov 18, 2010 Dec 31, 2010 Dec 31, 2013 Extend disbursements for project activities to accommodate remaining activities under the NCFCP in order to ensure sustainability of ODS phase-out. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Soundness of Background Analysis. One of the goals outlined in the MOD was to establish an efficient mechanism for executing ODS phase-out projects through local institutions. To do this, the project looked into lessons learned from the Bank’s first experiences with MP operations in other countries wherein serious delays occurred when investment projects were implemented through a government department or ministry. Therefore, a dedicated financial agent, IFCT, was given responsibility to implement the investment component in order to avoid the problem of weak government project management capacity. DIW retained overall responsibility for supervising implementation and ensuring that ODS projects were consistent with the CP. This worked well as it provided a system of checks and balances. Very rigorous technical analysis of the proposed sub-projects was conducted for CFC activities (and for methyl bromide in 2004). Financial analysis was also required for each sub-project and the analysis was done on a basis of incremental costs of converting away from each type of ODS in a particular industrial sector as agreed by the ExCom. The analysis and choice of technology were reviewed by Ozone Operations Resource Group (OORG), Bank’s independent experts, prior to submission of the subprojects to the ExCom for approval. Economic analysis was not conducted because the project involved a global public good and it was not possible to quantitatively capture health benefits from improved ozone layer conditions. Assessment of the Project Design. The design at appraisal was simple, involving a clear objective and one project component. Although at the time of appraisal in 1994 there was no mandate for a results framework or even a logframe, the results to be achieved by the project were well defined with no scope for manipulation by project proponents. The achievement was measured at the enterprise level. According to the original design, each beneficiary enterprise would sign sub-grant agreement with the financial intermediary individually. The adoption of an umbrella approach was conceived to facilitate the processing and management of multiple sub- 6 projects under a single GA. Project implementation arrangements took into account the analysis of institutional capacity and a comprehensive survey on ODS use under the Country Programme. Initially, the project design fit very well because it intended to phase out ODS from large enterprises, which was a low hanging fruit. However, the design of the sub-grant agreement at the initial design did not specify the closing date of the sub-grant agreement. As a result, there was no obligation for beneficiary enterprises to complete the sub-project by a specific date, which then caused delay of some sub-projects. However, by the late 1990s when large enterprises had already phased out ODS usage, the same modality did not work with smaller enterprises, and the project design was changed by employing a national/sectoral phase-out approach. Beside investment activity, technical assistance and capacity building were added to the project to support the phaseout effort at the national level. The achievement was measured at the national level. Lessons learned from the initial design were taken into account in the new design by adopting first-come-first-serve basis and the regulatory measures, which provided strong incentives for beneficiary enterprises to complete their sub-project by specific date. The project also used the Government Savings Bank (GSB) which specialized in dealing with small projects to be the financial intermediary of Part A of NCFCP and NMBPP according to a request from DIW. Adequacy of Government Commitment. Thailand’s commitment to the project was demonstrated by ratification of the MP and acceptance of the ODS control schedule therein. Assessment of Risks. This project pre-dated the risk matrix now included in Project Appraisal Documents (PAD), but reviews of annual work programs (AWPs) and annual verification reports provided a mechanism to identify and mitigate issues as they arose. The MOD identified institutional weakness of implementing agencies as one of the risks that could slow down project execution. This was addressed under the IS Project approved by ExCom in March 1993 and implemented by UNDP. There were technical and commercial risks related to the introduction of technologies which were new to Thailand at the time. These risks were minimized by providing TA to participating enterprises and by the use of technologies which had been internationally tested and commercialized. Quality at Entry: Overall quality of design is considered satisfactory with several aspects highly satisfactory. The Project benefits from strong international consensus on the need to control and phase-out the use of ozone depleting chemicals. The consensus was built on a solid base of scientific analysis. The subprojects benefitted from extensive technical analysis and independently review by OORG. The use of transparently defined cost-effectiveness criteria and results-based disbursement are highly satisfactory aspects. In 2010, the Quality Assurance Group (QAG) of the Bank undertook an assessment of this project as part of Quality Assessment of Lending Portfolio (QALP2). The QAG rated overall quality of design as “Satisfactory” with strategic relevance and approach and realism of project design and risks rated highly satisfactory. 2.2 Implementation In total, Project implementation took almost twenty years (August 1994-December 2013) and resulted in the successful completion of 52 pre-NCFCP sub-projects and two national ODS phase-out plans. This section summarizes the key factors in implementing the four groups of activities: pre-NCFCP sub-projects, NCFCP, NMBPP, and IS of the NOU. A. Pre-NCFCP sub-projects 7 Implementation: There were 56 pre-NCFCP sub-projects approved under the GA. Fifty-two sub-projects were fully implemented, while the remaining four were cancelled because the enterprises decided to terminate their sub-projects. Three of the total 52 sub-projects were approved as either terminal umbrella or demonstration sub-projects, which aimed to gather a group of remaining enterprises in the commercial refrigeration and halon sectors to convert to alternative technology. The Project, therefore, covered financing of conversion at 350 enterprises from 52 completed sub-projects. Keys for implementation success: Accomplishments of pre-NCFCP sub-projects were attributed to the simple implementation procedures and strong cooperation among relevant agencies (DIW, IFCT, beneficiaries and the Bank). Implementation success can also be attributed to innovations between DIW, IFCT and the Bank as follows: a) Introduction of the Voucher System: Two sub-projects assisted about 50 service shops in the mobile air-conditioning (MAC) servicing sector and 231 small and medium size enterprises (SME) in the commercial refrigeration. An innovative approach known as the “voucher scheme” was introduced by the Bank to handle large numbers of enterprises in a sub-project since it was not practical to have a sub-grant agreement with each enterprise. The voucher system allowed beneficiary enterprises to purchase the required equipment from any suppliers accredited or prequalified by DIW. The voucher scheme was subsequently used as the model for implementing sub-projects involving a large number of SMEs in NCFCP, NMBPP and in other countries. b) Regulation to support ODS phase-out: The pre-NCFCP sub-projects enabled the RTG to enact regulations to ban the use of CFCs after the completion of sub-projects in the sector: o Thailand was the first developing country that promulgated regulations to prohibit the use of CFCs in the manufacture of domestic refrigerators and to prohibit import of CFC-based domestic refrigerators in 1997, which was only one year after the completed phase-out in developed countries. o Moreover, the regulations included a ban on the use of CFCs in the manufacturers of commercial refrigerators and prohibited the import of CFC- based commercial refrigerators in 2004. These regulations played a vital role in sustaining the phase-out of CFCs in the manufacturing and servicing sector. Factors affecting implementation. Main issues and factors affecting implementation of pre- NCFCP sub-projects were implementation delay due to different reasons. First, the financial intermediary was unfamiliar with the World Bank guidelines in term of enterprise procurement. Second, eligibility criteria of the ExCom were not cleared at the beginning. The MP anchor team had to come up with manual/instruction on how to determine funding eligibility in accordance with the ExCom criteria. Moreover, the East Asia economic crisis between 1997 and 1999 caused a tightening of credits which made it considerably more difficult for enterprises to secure funds to purchase equipment before claims for reimbursement could be made to IFCT. Given that sub-grant agreement did not indicate closing date of the sub-grant agreement, some enterprises decided to delay the procurement of equipment until economic situations improved. The project also encountered specific situations., For commercial refrigerator terminal umbrella sub-project, it was difficult to obtain supporting documentation from SMEs to confirm their ODS consumption as most of them did not have systematic filing. It took a year for these enterprises to 8 acquire supporting documents to prove their eligibility for funding. The lack of experience in procurement using ICB under commercial refrigerator terminal umbrella project also resulted in delays. This sub-project involved procurement of foam injection machines for 24 commercial refrigeration manufacturers. The GC for this sub-project took almost one year to prepare bidding documents and execute three rounds of ICB before the procurement process was completed. For halon management program and halon recovery, recycling and banking sub-project, there was a significant delay in deciding to change the design from physical halon banking to electronic banking. After sub-project approval in 2000, it took time for DIW to decide that a study on halon inventory was needed to determine whether Thailand would need the physical halon banking or electronic halon banking. The study was completed in 2004 and, based on the study, DIW finally decided to implement the electronic halon banking rather than the approved physical halon banking as the quantity of halons installed in the country could not justify the large investment associated with establishment of a physical halon bank. Therefore, DIW revised and submitted the sub-project proposal to the ExCom in 2005 to obtain the ExCom approval on the revised implementation modality. The implementation of revised modality was completed in 2010. These delays led to several extensions of the project closing date. In addition to implementation delays, the subproject approach in the initial design was capable of phasing-out a defined amount of ODS consumption. Its limitation was that in tandem, other ODS- using companies could increase their ODS consumption given the lack of a more structured sectoral and national approach for phasing out ODS in a sustainable manner. As a result, overall ODS consumption at the national level prior to 2000 remained un-controlled. The sub-project modality at the initial stage did not allow for, nor ensure, sustained aggregate reductions of ODS that was necessary to achieve the Protocol’s phase-out targets in a timely manner. The restructuring of the project in 2002 addressed the above remained un-controlled ODS by adopting the national approach. B. National CFC Phase Out Project (NCFCP) Implementation: After the 2002 amendment, the Project Management Unit of DIW (DIW-PMU) was established. Its responsibilities were to implement sub-grants (part A) and to conduct capacity building (Part B) under the NCFCP until January 2007 when these responsibilities were transferred to the NOU. At the end of the project, about 263 enterprises in the manufacturing sector were supported by the project. Servicing technicians from approximately 5,784 Mobile Air Conditioning (MAC) and refrigeration servicing workshops, which exceeded the original target of 4,050 servicing workshops, were trained and certified. Keys for implementation success: In addition to strong cooperation among the relevant agencies, accomplishments of NCFCP implementation can be attributed to the following: a) The Project was consistent with the evolving operational mechanism of the MLF, wherein funding approval was shifted from a project-by-project approach to a performance-based national phase-out approach aligned with the MP’s control measures for CFCs and other ODSs. Importantly, responsibility for sub-project level management, include determination of ODS phase-out, technical merit and cost-effectiveness, shifted to the national implementing agencies to facilitate the government to set up funding criteria to all remaining enterprises and establish regulatory measure to phase out ODS in each sector. b) High Capacity of the DIW-PMU. The set-up of the PMU as an independent unit with competent professionals and reporting directly to Director General enabled the PMU to 9 respond more effectively and efficiently, reduced procedural delays and accelerated implementation. c) Transparent and seamless implementation procedures: Implementation procedures of individual and group sub-projects in the Operation Policy Guidelines (OPG) were transparent and in accordance with Bank guidelines. With regard to group sub-projects for which the voucher scheme was used, the implementation procedure was seamless. The use of GC reduced the burden of DIW and the financial intermediary in coordinating with the beneficiaries, that were very small enterprises and scattering across Thailand. Moreover, DIW-PMU distributed lists of beneficiaries and contact information to all accredited suppliers after vouchers were issued. This allowed equal opportunity for all accredited suppliers to access the enterprises and follow commercial practices. d) Flexibility: NCFCP was multi-year agreement project with long implementation time span. During this time span, industry situations could change from the situation prevailing at the time the project was originally designed. Flexibility to add/remove activities to suit the change in situation was critical. The RTG was given the flexibility of adding or removing activities without seeking the ExCom approval as long as the proposed activity contributed toward achievement of the NCFCP and consistent with the ExCom funding guidelines. e) Voucher scheme: The voucher scheme was proven as an effective and transparent tool to facilitate procurement of equipment for thousands of beneficiaries scattering across the country. The voucher scheme allowed equal opportunity for accredited suppliers to sell equipment to the beneficiaries based on commercial practices. Following the launch of the voucher scheme, the price of equipment declined 30%, which supported project efficiency and sustainability because servicing workshops were able to acquire equipment at more affordable prices. Factors affecting implementation: a) Disbanding of the DIW-PMU. The MTR recommended changing the institutional structure of DIW-PMU from being an independent unit reporting directly to the Director General of DIW to integrating the PMU into the existing NOU, by citing the lack of effective communications, lack of knowledge transfer, and the need for integrated program management and sustaining the implementation capacity in the NOU. This change was also in line with the NCFCP plan to transfer the tasks remaining after 2006 to the NOU. DIW decided to integrate the PMU into the NOU in 2007. The QAG assessment agreed that the shift from a PMU to the NOU offered greater prospects for long-term sustainability. However, the disbanding of the PMU affected the overall implementation of the NCFCP as the experienced PMU staff left, and the new staff – while well educated – were young and relatively inexperienced and faced a steep learning curve in implementing the remaining tasks. b) Distribution of R&R machines: Difficulties in distributing recovery and recycling (R&R) machines to MAC servicing workshops were attributed to two factors. The first factor was contaminated refrigerant in the servicing sector during 2005-2008. During this period, several alternatives to CFC-12 (in addition to HFC-134a) and sub-standard blends were introduced in the domestic market. When charging different types of refrigerants or sub-standard blends into the MAC system, the MAC system would become contaminated. The contaminated refrigerants undermined the promotion of R&R machines because they damaged cleaned refrigerant in the cylinder, which would become unusable. The second factor affecting the R&R subsidy program was high counterpart funding requirement for acquisition of the equipment. The project provided subsidy of 10 about 55% of the equipment cost, while the rest would be borne by MAC servicing workshop. Risks of collecting contaminated and unusable refrigerants and the large amount of out-of-pocket contribution made investment in R&R machine financially unattractive. C. National Methyl Bromide Phase Out Project (NMBPP) Implementation: The Project Management Unit of the Department of Agriculture (DOA-PMU) handled implementation of sub-grants (part A) and Strengthening of the PMU of the Sector Plans (Part B) under the NMBPP until December 2013. By the closing date, the project had supported about 115 enterprises to employ the code of good practice for phosphine fumigation and integrated pest management (IPM) through investment sub-projects. DOA-PMU implemented the NMBPP components and achieved methyl bromide reduction as planned. Keys for implementation success: In addition to transparent and seamless implementation procedures, flexibility, use of the voucher scheme described under the NCFCP, accomplishments of the NMBPP were also attributed to the following: a) Strong cooperation among concerned parties: There was strong cooperation among DOA-PMU, GSB and the beneficiaries during sub-project preparation and implementation. Moreover, the Bank played a vital role in advising DOA-PMU and GSB to overcome the issues faced during implementation. For instance, the Bank suggested DOA-PMU to provide faced gas mask for insecticide as part of the equipment to be provided to small enterprises. b) Modification of implementation modality: DOA-PMU modified the original project proposal to reclassify beneficiaries based on updated information regarding methyl bromide use patterns. This allowed the RTG to provide appropriate assistance to suit all beneficiaries’ actual needs. c) Training provided to beneficiaries: Training for the beneficiary enterprises on the code of good practice for fumigation and fumigation equipment has strengthened their in-house fumigation teams to fumigate more effectively and safely. As a result, unnecessary re- fumigation was eliminated and efficiency increased. Involvement of the right stakeholders and this win-win approach secured strong buy-in from stakeholders and resulted in successful implementation. Factors affecting implementation: There were no serious operational issues that affected the achievement of the objective of NMBPP. However, there were implementation difficulties and delays, which affected the beneficiaries enrolling in the project and which delayed completion of some sub-projects. These factors are summarized below: a) Enterprise participation in NMBPP: Some enterprises were not able to provide documentation to demonstrate their eligibility due to inadequate record-keeping. Moreover, the limited amount of grant funds was not attractive enough for many of them to participate in the NMBPP considering the amount of supporting documentations required. Unlike the industrial sector, in which ODSs were used in the main business processes, fumigation was a tiny part of their business, and the enterprises did not realize the importance of following good practices for fumigation. b) Revision of implementation modality: To reflect the actual needs for phasing out methyl bromide, DOA-PMU proposed to change implementation modality for providing assistance to beneficiary enterprises in mid 2008. However, the proposed change could not be done prior 11 to ExCom’s approval. To secure ExCom’s approval on the new implementation modality resulted in delays in implementation of some sub-projects until April 2009. c) Need for Pest Management Plan (PMP): After the ExCom approved the revised implementation modality, project implementation could not proceed until a Pest Management Plan (PMP) acceptable to the Bank was prepared given that the NMBPP involved the use of fumigants and pesticides. The DOA-prepared a PMP which was approved by the Bank in November 2010. d) Flooding crisis in 2011: In the last quarter of 2011, severe flooding in the north and central part of Thailand brought project implementation under the NMBPP to a halt as most of the beneficiaries were in the affected areas. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design. This project predated the Bank’s results framework or even log frame requirements. However, the project was subjected to the MP’s sophisticated system of baselines, targets and M&E. In addition, disbursements were performance-based, with clear M&E standards, definitions, responsibilities, a timetable and independent annual verification. If targets were not met, there was no additional disbursement from the MLF. Implementation. M&E was carried out as follows: o Progress reporting: Progress reports were prepared by DIW and DOA and submitted to the MLF Secretariat through the Bank. Sub-projects with significant implementation delays were specifically required by the MLF secretariat to be reported in a separate template. o Annual work programs (AWP) and biennial work programs (BWP): Implementation of the NCFCP and NMBPP was monitored and recorded through AWPs and BWPs, respectively, which were submitted to the ExCom along with consumption verification reports. The AWPs and BWPs outlined the accomplishments and outcomes of activities undertaken in the previous year and the planned actions for the next year. AWPs and BWPs provided mechanisms for DIW and DOA to review and adjust their strategies and work plans during the implementation on a regular basis. Some activities that had thought to be needed at the preparation stage were removed from the project as they were no longer relevant due to changing circumstances. The resources freed up from removal of outdated activities were made available to support key activities that had not been anticipated during the preparation. These enabled executing agencies to utilize the resources provided by the MLF in the most cost effective manner. For example, provision of refrigerant leak identifiers for private inspection stations was removed because many of them had invested in the equipment on their own. The resources freed up from this activity were used to provide training equipment and train-the-trainer activities of all vocational schools in Thailand. This led to a change in their curriculum which is a sustainable approach as all new technicians will be aware of the ozone layer protection issue. o Consumption verification report: Consumption of ODSs to be phased out under the NCFCP was audited and verification reports were prepared by an independent auditor on an annual basis. The verification reports were used to confirm Thailand’s compliance with the reduction targets as agreed with the ExCom. In addition, verification reports also included potential weaknesses identified within the period audited and recommendations to improve the existing system to ensure compliance with the GA. 12 Utilization. The Bank, through its supervision missions and all reports submitted by the Borrower, monitored and evaluated implementation progress to identify any potential issues that could undermine achievement of the GEO. Based on these experiences, the Bank provided recommendations and advice to address these issues or make adjustments as necessary. 2.4 Safeguard and Fiduciary Compliance 2.4.1 Safeguards Under the Bank’s safeguards policy which was in place in 1994, the Project was rated as a Category “C”. Hence, no specific safeguard actions were applied to the original project components. Nevertheless, Bank environmental specialists formed part of the core supervision team. The Bank monitored the Project’s environmental aspects and ensured that relevant health and safety issues were addressed during the design and implementation of each sub-project. The Bank also ensured that all discarded ODS equipment was properly destroyed. The destruction of baseline ODS equipment was certified by DIW under the witness of the financial intermediary. With the addition of NMBPP to phase out methyl bromide, the Bank prepared an Integrated Safeguard Datasheet in 2010 and reclassified the Project safeguard rating as category “B”. As methyl bromide and its alternative are pesticides and were used for managing pests that could affect agriculture or public health, Bank OP 4.09 on Pest Management was triggered as was Bank OP/BP 4.01 on Environmental Assessment (EA). A Pest Management Plan (PMP) was prepared by the Recipient to use as an EA instrument in ensuring that the phase-out of MB consumption would be accomplished in a sustainable manner. The PMP was disclosed in country and at the Infoshop on November 24, 2010. During the 2013 Mid-Term Review mission of NMBPP, the Bank reviewed the objectives and targets set in the PMP and ascertained that project activities were complying satisfactorily with the provisions of OP 4.09 and BP 4.01 Annex C. Pesticides (fumigants) used in the project as an alternative to methyl bromide complied with both the national pesticide legislation and selection criteria in OP 4.09 and their use was fully justified under an IPM approach. The measures taken to reduce risks to the environment and human health were adequate and consistent with the education, skills and equipment of users. All fumigant applications were performed by fumigators who were duly trained and certified by DOA, taking all the necessary precautions in compliance with national legislation. Overall, compliance with safeguards policies was satisfactory. 2.4.2 Fiduciary The 1994 GA designed that all procurement would follow Bank procurement guidelines according to the thresholds for International Competitive Bidding (ICB) and other procurement methods. Procurement would be carried out by IFCT to avoid the weak procurement capacity in the government agencies. After amendment of the Grant Agreement (GA) to accommodate implementation of NCFCP and NMBPP, procurement for Part B and Part C of the project was assigned to DIW and DOA. There was no risk assessment or risk mapping with mitigation measures, and there was no requirement for a procurement plan. However, the project allowed direct procurement through a voucher system and pre-selection of suppliers. These procedures are considered efficient and economical to meet sub-project requirements. Overall compliance with procurement policy was satisfactory. 13 Financial management (FM) arrangements at entry were simple and a full FM assessment was not required. The Bank formulated standard arrangements for reporting, external auditing, disbursement including special account and statements of expenditures. These arrangements appeared to be appropriate at that time. During implementation, post procurement and expenditure reviews were carried out on a regular basis by the Bank’s procurement and FM specialists. External audits were conducted on an annual basis throughout the Project period and the audit opinions were unqualified (clean) as the management letters did not reveal any major accountability or internal control issues. The audited financial reports were submitted on time for DOA-PMU. The Bank assisted DIW, DOA, IFCT, Thai Military Bank (TMB), and GSB in training new staff unfamiliar with Bank requirements. Issues raised by the expenditure and post reviews were clarified and efficiently resolved. DIW and DOA regularly attended the Financial Agent Workshops (FA) organized by the Bank’s Environment Department and Ozone Operations Resource Group (OORG) meeting, which was organized annually in Washington DC. Regional workshops were also organized biennially by the Bank to review procedural and project issues, to update staff on ExCom decisions, and to exchange lessons learned among participating countries. The outcomes of the workshops were useful for DIW, DOA and financial intermediaries in the planning, implementation and monitoring of the project in accordance with updated policy/decision and to ensure fiduciary compliance of the project. 2.5 Post-completion Operation/Next Phase Manufacturing sector: A follow-on project is not required to tackle the ODS addressed by the Project as CFCs, TCA and carbon tetrachloride have been completely phased out. All conversion sub-projects successfully adopted alternative technology as approved by the ExCom. Baseline equipment has been rendered unusable and certified by DIW. Given (i) the destruction of baseline equipment, (ii) the ban against importing CFCs, TCA, and carbon tetrachloride, and (iii) the ban on the use of CFCs and TCA in manufacturing since 2005, it is unlikely that the beneficiary enterprises would revert to CFCs. Servicing sector: A next phase project is not required here either. Although the servicing sector is allowed to use CFCs beyond 2010, their high price and limited availability had forced owners of CFC-based equipment to retrofit or retire their existing equipment. Given the life time of CFC- based equipment is around 10-15 years, it is anticipated that most of the CFC-based equipment should have been retired already. Country level: The regulatory frameworks to control the import and use of ODSs in Thailand are still being enforced. Moreover, the project built institutional capacity of DIW and strengthened cooperation among key stakeholders through the IS component. Work initiated under the Project did lay the groundwork for the RTG to address the phase-out of hydro chlorofluorocarbons (HCFCs). Preparation for work in this new sector began within the context of this Project. Experiences and lessons gained during more than 19 years of implementation of this project will be applied to the implementation of the Stage I HCFC Phase-out Project (approved April 7, 2014) between 2014 and 2018. This is the first in a series of projects whose overarching objective is to contribute to Thailand’s efforts to reduce its HCFC consumption in accordance with the Montreal Protocol phase-out schedule, leading to a complete phase-out by 2040. 14 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Rating: High Relevance The project addressed an issue of high global importance and helped Thailand meet its obligations under the Montreal Protocol to phase out consumption of ODS. The Project was one of the first global public goods operations addressing environmental issues, and in some respects it established a valuable precedent with continuing relevance. The project retained its relevance throughout its life. It was specifically mentioned in the Country Assistance Strategy (CAS) of August 1994, June 1998, and January 2003. The project is also mentioned in the Interim Strategy Note (FY10-12) and is linked to “Cluster III – Infrastructure and Climate Change” under the Second Prong “Improving Competitiveness and Inclusive and Sustainable Development”. Furthermore, approval of the follow-on project, the HCFC Phase-out Project (Stage I), on April 7, 2014, demonstrates the continued high relevance of HCFC phase-out for Thailand. The Project design was considered state of the art in 1994. The original approach worked well early in the project when large enterprises were the main beneficiaries. Subsequently the model of project-by-project financing became inefficient and entailed high transaction costs. As a result, the Bank modified the design towards an evolving program model using a national/sectoral approach. This model provided flexibility for Thailand to add new chemicals to be phased out, allowing the project to remain highly relevant throughout its long history. 3.2 Achievement of Global Environmental Objectives Rating: Satisfactory The achievement of the project fully complied with the revised GEO in 2002. The project successfully assisted Thailand in phasing out its ODS consumption from 7,524 ODP tons in 1994 to zero by 2010, allowing Thailand to fulfill its MP obligations through three successive stages as elaborated below. This was particularly important from a global perspective as Thailand represented one of the ten largest consumers of ODS at the time of Project launch. As shown in section 3.3, the cost effectiveness of the project was lower than the cost-effectiveness threshold established by the ExCom. Stage 1: Pre-NCFCP. The project aimed to assist 44-55 sub-projects to phaseout ODS. The ExCom approved 56 sub-projects by 2001, but four of them were terminated by the beneficiary enterprises, thus reducing the number of subprojects implemented to 52 sub-projects. The pre- NCFCP sub-projects directly eliminated consumption of about 2,378 ODP tons of ODSs, or 79% of the goal of eliminating at least 3,000 tons. Sectoral breakdown is shown below: Outcomes for Pre-NCFCP: Sector Output Final Cost Appropriate Outcome (No. investment (US$M) Technologies (ODP tons subprojects Introduced phased out) implemented) Foam 20 2.47 HCFC-141b, water- 434.85 blown formulation 15 Refrigeration 20 11.82 HFC-134a and HCFC- 1,129.41 141b Solvents 10 4.62 Wet media blasting, 96.02 aqueous cleaning system and solvent- base cleaning process Halon 2 0.56 Dry chemical powder, 717.40 CO2 Totals 52 19.47 2,377.68 The above activities enabled RTG to enact supporting regulations to ban the use of CFC in the manufacturing of domestic refrigerators in 1997 after the completion of the subprojects. The pre- NCFCP subprojects were cost-effective in reducing consumption of ODS. The originally estimated cost for reaching a 3,000 ton reduction was US$23.77 million, compared to the final cost of $19.29 million. More information on cost efficiency is available in Section 3.3. Stage 2: NCFCP. The introduction of the NCFCP in 2001 allowed RTG to accelerate the phaseout of the remaining consumption of ODS ahead of the Montreal Protocol schedule. The agreement between the ExCom and RTG required the country to meet annual performance targets in exchange for the release of US$14.7 million pre-approved in principle by ExCom through nine tranches of funds. The performance targets achieved complied with consumption as agreed with the ExCom on an annual basis (see more detail in Figure 1 of Annex 2). Thailand also met its additional performance targets agreed with the ExCom as follows: (i) ODS import control policy operational by 2002, (ii) import quotas for CFCs (2002-2010) announced, criteria and procedures for financial support for investment projects by 2003 established, (iii) MAC inspection program announced, and (iv) the use of CFCs in the manufacturing sector by 2005 banned, and MAC inspection requirement operational by 2005. The combination of investment activities for conversion sub-projects, technical assistance, capacity building, implementation of quota system and regulatory measures assisted Thailand to phase out consumption of ODS. In total, about 3,066 ODP tons of CFCs, 34 ODP tons of 1,1,1-trichloroethane and 7.52 ODP tons carbon tetrachloride were phased out as planned, Thailand was able to completely phase out consumption of these chemicals by 2010. Stage 3: NMBPP. The ExCom approved US$2.9 million in December 2004 to eliminate the consumption of methyl bromide by 2013, two years ahead of its required phase-out date under the MP. One hundred and fifteen enterprises successfully adopted phosphine and integrated pest management (IPM) to replace methyl bromide. The licensing system and management information system was put in place to control import and use of methyl bromide. A laboratory insect resistance control unit was established by the project to monitor tendency of insect resistance to phosphine. This will assist the sustainable phaseout of methyl bromide. Eight training centers were established and equipped with training equipment to provide training to concerned stakeholders under the project. DOA established accreditation scheme to provide incentive to obtaining psytosanitary certification to accredited enterprises without fumigation. The project contributed to not only the reduction of methyl bromide for non-quarantine and pre- shipment (non-QPS) application – consumption controlled under the MP-but also the reduction of methyl bromide use for QPS applications, which is still exempted under the MP. As of December 2013, consumption of methyl bromide for non-QPS application was zero. From 2002, about 241.8 ODP tonnes of methyl bromide for non-QPS application were phased out from the implementation of NMBPP through the combination of investment sub-projects to phaseout methyl bromide consumption and sustain the use of phosphine, strengthening import and use of 16 methyl bromide, incentive to avoid the use of fumigants, capacity building and public awareness. Despite the rising trend of methyl bromide use for QPS application during 2005-2007, NMBPP were able to reverse the trend of methyl bromide use for QPS application in the long term. Given that the project strengthened capacity of private sector to employ alternative approach and the government to control import and use of methyl bromide, a number of shipments were fumigated with phosphine technology although methyl bromide was still allowed (QPS). Therefore, the use of methyl bromide for QPS applications gradually declined from 335 ODP tonnes in 2007 to 192.1 ODP tonnes in 2012. The annual trend of methyl bromide used for QPS and non-QPS application is shown in figure 2 of Annex 2. Institutional Strengthening. The IS component strengthened the capacity of the NOU to monitor consumption of all ODSs to meet the MP reduction schedule through the licensing and quota system. As a result, Article 7 data and Country Programme Implementation Progress were timely reported to the Ozone Secretariat and the MLF Secretariat on an annual basis as requested. Reporting of Article 7 data is one of the most important obligations of the MP. Reduction of ODS. Table 2 compares the reduction schedule according to the MP, the maximum allowable consumption for Thailand from the implementation of NCFCP and NMBPP as agreed with the ExCom (ahead of the MP schedule) and actual consumption. Table 2 highlights the impact of the Project’s contributions to the sustainable, accelerated phase-out of Thailand’s ODS consumption. 17 Table 2: Thailand ODS Allowed, Targets and Actual Consumption 1993 – 2012 (ODP tonnes) Annex Baseline 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 A-I: CFCs Allowed 6,082 6,082 6,082 6,082 6,082 6,082 6,082 6,082 3,041 3,041 912 912 912 0 0 0 NCFCP 6,082 3,066 2,777 2,291 1,364 1,121 912 704 496 0 Actual 8,053 6,865 8,248 5,550 4,448 3,783 3,611 3,568 3,375 2,177 1,857 1,358 1,260 454 386 190 141 0 0 0 A-II: Halons Allowed 272 272 272 136 136 136 136 136 0 0 0 NCFCP 272 Actual 502 293 368 154 154 500 500 500 0 0 0 11 0 0 0 0 0 0 0 B-II: Carbon Tetrachloride Allowed 1.2 1.2 1.2 1.2 1.2 0 0 0 NCFCP 7.5 7.5 7.5 7.5 1.1 1.1 1.1 1.1 1.1 0 0 0 Actual 7.7 0 14.3 6.6 13.2 8.8 6.6 7.2 7.2 0 0 0 0 0 0 0 0 0 0 0 B-III: Methyl Chloroform Allowed 55 55 39 39 39 39 39 17 17 17 NCFCP 55 34 34 34 4.5 4.5 4.5 4.5 4.5 0 0 0 Actual 469 295 224 114 104 85 46 34 34 3 2 0 0 0 0 0 0 0 0 0 E-I: Methyl Bromide Allowed 183 183 183 146 146 146 146 146 146 146 146 NMBPP 183 183 146 146 146 146 73 73 37 18 Actual 194 131 206 201 172 205 291 242 178 181 146 141 122 107 44 60 21 17 Note: i. Allowed: according to Montreal Protocol obligations ii. NCFCP: according to target per the NCFCP Agreement between Thailand and ExCom iii. NMBPP: according to target per the NMBPP Agreement between Thailand and ExCom iv. Actual: as reported under Article 7 of the Montreal Protocol 18 3.3 Efficiency Consistent with the project approval regime exercised by the ExCom, efficiency is assessed based on the cost effectiveness (CE) of phase-out achieved. CE is defined as the amount of MLF grant per unit weight of ODS phased-out in ODP kg. The cost effectiveness of the Project’s pre- NCFCP sub-projects compared to CE thresholds established by the MLF for the various sectors was similarly favorable, as outlined in Table 3 below. Table 3: Comparison of CE Sub-project Thresholds Approved and Achieved Sector Sub-sector ExCom Actual Actual (US$/ODP kg) Approval Achieved (US$/ODP kg) (US$/ODP kg) Pre-NCFCP Foam General 9.53 Flexible polyurethane (PU) 6.23 Integral skin 16.86 6.38 5.68 Polystyrene/polyethylene 8.22 Rigid PU foam 7.83 Halon General 1.48 2.27 0.78 Refrigeration Commercial 15.21 11.17 10.47 Domestic 13.76 Solvent CFC-113 19.73 50.64 48.11 TCA 38.50 Total Pre-NCFCP n/a 10.45 8.19 NCFCP n/a 5.16 4.21 NMBPP n/a 11.70 6.73 Total Project n/a 7.70 6.45 Table 3 compares CE sub-project threshold established by the ExCom, approved by the ExCom for the project and achieved from the project. The unit cost of phasing out ODS achieved compares very favorably with the actual approved cost and the CE thresholds established by the ExCom across all sectors of the project. The only exception was the solvent sector though it is important to note that six out of 10 solvent sub-projects were approved prior to the establishment of the CE thresholds in 1995. The average actual CE of project was US$6.45 per ODP kg, while the average approved CE of the project was US$7.70 per ODP kg. In other words, the Project achieved better CE than required by the MLF. For the pre-NCFCP sub-projects, the actual achieved unit cost of phasing out ODS of 52 sub- projects across all sectors was US$8.19 per ODP kg, which compares favorably to other ODS projects within the Bank’s East Asia and the Pacific portfolio namely Phase 1 of the Philippines (US$12.29 per ODP kg) and Malaysia (US$10.11 per ODP kg) ODS Phaseout Project. For NCFCP, the actual achieved unit cost of phasing out CFCs, TCA and carbon tetrachloride across all sectors was US$4.21 per ODP kg, which compares favorably with the CE of Phase 2 of the Philippines (US$4.28 per ODP kg) and Indonesia (US$4.41 per ODP kg) NCFCP. For NMBPP, Thailand was able to accelerate the phaseout of methyl bromide consumption two years ahead of the Montreal Protocol phaseout target. 19 3.4 Justification of Overall Outcome Rating Rating: Satisfactory The overall outcome rating for the project is satisfactory as evidenced by the following: a) High relevance of project’s objectives, design and implementation at start-up and remained so throughout its entire life; b) The Project helped ensure Thailand’s compliance with the MP’s ODS compliance regime as evidenced by the country’s data reporting under Article 7 of the MP; c) The project supported Thailand to promulgate regulations to prohibit the use of CFCs in the manufacture of domestic refrigerators and prohibit the import of CFC-based domestic refrigerators in 1997, which was only one year after the completed phase-out of CFCs in developed countries. Regulatory measures to prevent the back conversion to CFCs was recognized by the ExCom as an effective tool to supplement the investment activities; d) Thailand’s NCFCP was one of the first to adopt a national phase-out management plan modality under the MLF and this formed the basis upon which the MLF is now supporting the phase-out of consumption of HCFCs in Article 5 Parties; and e) Actual cost of phase-out in US$ per kg for pre-NCFCP, NCFCP and NMBPP was lower than the respective level approved by the ExCom (per Table 3 above). 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development Not applicable. (b) Institutional Change/Strengthening The Project has strengthened the capacity of DIW, DOA, concerned government agencies and financial intermediaries to develop, implement and monitor the turn-key strategies, which integrated regulatory, technical assistance, and investment measures. The Project has strengthened cooperation among concerned agencies to enforce ODS-related regulations. Finally, the RTG was able to apply concepts and approaches for delivering technical and financial assistance to thousands of beneficiaries scattering across the country. This institutional strengthening can be applied to not only future MP related activities, but also other activities of a similar nature. (c) Other Unintended Outcomes and Impacts (positive or negative, if any) The phase-out of ODS achieved under the Project contributed to significant indirect global environmental benefits as ODSs are greenhouse gases with global warming potential (GWP) thousands times stronger than carbon dioxide (CO2). The CO2 equivalent impact of the phase-out achieved under the Project is calculated to be 36 million tons, equivalent to taking 7 million cars off the road permanently. Moreover, the Project provided indirect global benefits by reducing the negative health effects associated with the depletion of ODS including skin cancers, immune system deficiencies, eye cataracts in human beings and animals, as well as damage to agriculture crops and marine organisms. Thailand was one of the first two countries that agreed with the Bank’s proposal to adopt the national phase-out approach. At that time, there were neither guidelines nor policies to provide assistance for the national phase-out approach. Given that NCFCP was a turnkey project for which the grant fund was approved to the country upon fulfilling obligations as agreed with the ExCom, other developing countries subsequently followed the national phase-out approach to 20 phase-out remaining consumption of ODS. Innovation by the Bank in adopting the national phase-out approach influenced subsequent operations of the MLF including the recent policy on financial assistance for HCFC Phase-out Management Plan (HPMP). 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops There was no beneficiary survey carried out for the NCFCP. The beneficiary satisfaction survey was undertaken in early 2013 as part of the mid-term review (MTR) for the NMBPP. Most of the beneficiaries were satisfied with the sub-project design and implementation. Moreover, their satisfaction with operation of the Management Information System (MIS) was high (please see more detail in Annex 5). 4. Assessment of Risk to Development Outcome Rating: Negligible The risk to development outcomes is rated negligible for the following reasons: a) With the global production phase-out of CFCs, halons, CTC, and TCA, the global supply of these substances was eliminated. b) Each of the sub-projects implemented resulted in the conversion away from ODS to alternative substances permanently, and the dismantling of old ODS-using equipment was verified. c) DIW and the Customs Department enforced the ban on imports of CFCs, halons, CTC, and TCA. d) RTG enacted regulations to ban the use of CFCs and TCA in all manufacturing sectors starting from September 2005. e) In the service sector, there will continue to be demand for servicing the remaining CFC- based equipment. However, the high price and limited availability of CFCs would force owners to retrofit or retire their existing equipment early. CFC demand will remain for a few years and could be met through stockpiles and the use of recovery and recycling machines. f) Although after the successful phaseout of CFC, halons, TCA, carbon tetrachloride and methyl bromide, RTG is still committed to comply with the remaining obligations under the MP, namely HCFCs. Under the MLF, Thailand received financial assistance from the MLF to implement HCFC Phaseout Management Plan Stage I through the Bank. HCFC phase-out project was approved by the Bank on April 7, 2014. 5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 5.1 Bank (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory The Project was prepared in conformity with operation of the MLF at the formative stage, when implementation was based on the merit of each individual sub-project. 21 As the project was approved at RVP level, only MOD was prepared as opposed to a project appraisal document. The task team had to innovate in developing a project to support the MP and produced a good result. They received sound peer review advice and management support. Bank management also created an expert cadre which was helpful in supporting the design and implementation of the MP operations. The skill mix of the team was appropriate; time and resources were also appropriate, especially considering that the project became the model for other MP operation. In addition, the amount of about US$178,000 was spent during project preparation. This level of project preparation budget was very reasonable. (b) Quality of Supervision (Including of fiduciary and safeguards policies) Rating: Satisfactory Supervision efforts: The QAG panel considered Bank supervision provided highly satisfactory attention to development effectiveness given excellent skill mix, continuity3 and technical support from the Montreal Protocol unit in the former Environment anchor since 1994. The task team focused consistently on the phase-out of the ODS chemicals, aided by simple but well-defined M&E indicators which gave a clear picture of progress and issues. The umbrella grant agreement employed by the Project provided flexibility for the Bank to add new activities and chemicals when they are needed by the MP. In the past fifteen years, four TTLs and the fiduciary team of this project were based in the Bangkok office. This has facilitated consultations and problem- solving in a timely manner. Over the 19-year implementation period, the Bank provided DIW and all other Project counterparts with ODS policy and technical advice through regular supervision missions as well as site-specific technical visits. Supervision missions were undertaken on average twice a year. Site visits, which provided a first-hand understanding of on-ground implementation experiences, were conducted as required and reported upon in annexes to the Project’s Aide Memoires. The supervision missions were used to follow implementation progress, discuss problems encountered, and to develop actions to resolve pending issues. Throughout implementation, the Bank team worked closely with DIW, DOA, IFCT, TMB and GSB in delivering outputs such as submission of the AWP, biennial work programs (BWP), verification reporting and compliance with the performance indicators agreed with the ExCom. The Bank team also monitored compliance with the Bank’s fiduciary requirements, reviewed procurement and disbursement procedures and audit reports. The mission aide memoires were detailed and covered much ground on procurement management, including recommendations on actions required to improve the pace of implementation. However, mission aide memoires and ISRs were regularly completed, providing a consistently satisfactory view of the implementation status of the Projects’ individual sub-projects, NCFCP and NMBPP. The mid-term review (MTR) of the pre-NCFCP and NCFCP was conducted in September 2006. However, due to the strong opinion of the MTR author that may negatively impact the client relation, the MTR report was not endorsed by the Bank management. For NMBPP, the MTR that was planned in 2011 was postponed due to the devastating 2011 flood event. However, a MTR 3 There were five TTLs over the 19 year period of implementation. There was one team member who worked for this project since 1996, who ensured smooth transitions from one task team leader to the next. 22 was conducted in early 2013 for the sustainability of methyl bromide. As the use for QPS applications are exempted under the Montreal Protocol, the MTR for NMBPP suggested recommendations for Thailand to strengthen necessary measures to improve the control of methyl bromide for QPS applications after 2013. The supervision effort by the Bank contributed to the following: a) RTG was able to comply with the MP obligations and also more aggressive reduction schedules as agreed with the ExCom under the NCFCP and NMBPP. b) Pending implementation issues could be settled in a timely manner due to timely and adequate supervision and coordination with DIW and other stakeholders except for a one year gap during late 2009-2010. c) The Bank provided support to DIW and DOA to formulate policy frameworks and implementation plans. The Bank negotiated with the MLF secretariat and ExCom to facilitate the approval of AWPs resulting in the timely release of funding tranches from the ExCom to Thailand which were critical to the timely implementation of NCFCP and NMBPP. d) Strong working relations between RTG and the Bank led to very effective cooperation in the implementation of the project. Given the strong working relations between RTG and the Bank and the Bank’s comparative advantage in supporting large-scale, complex projects, the capacity of its ODS technical and policy team, and the opportunity to link environmental efforts more closely with development objectives, the Bank became the sole implementing agency for ODS phase-out in Thailand starting 2001. Notwithstanding the efforts above, there were some shortcomings in the Bank’s supervision, some of which might have contributed to implementation delays in the NCFCP and NMBPP. Firstly, the investment activities under NMBPP were delayed 18 months while the PMP was being prepared by DOA and approved by the Bank. Implementation of the NMBPP could have advanced faster if the Bank had informed DOA of the PMP requirement immediately after ExCom approval. Generally, the Bank’s safeguards work could have been more rigorous, with more emphasis on worker health and safety, and tighter reporting on safeguards supervision. Secondly, the Bank should have revisited FM implementation aspects when new FM requirements used in 2005 and two of the implementing agencies were also fiduciary agents to channel grant funds to beneficiaries. Thirdly, there was a lack of communication from the Bank during late 2009-2010. This affected project implementation as some activities were not able to proceed without the Bank’s prior review and no-objection. This shortcoming was resolved with the appointment of a new Task Team Leader in Bangkok. Given these shortcomings, the quality of supervision is rated as satisfactory. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The overall Bank performance is rated as satisfactory because the performance in ensuring quality at entry is rated as satisfactory and the quality of supervision is rated as satisfactory. In line with ICR guidelines, this rating is considered applicable to the overall Bank performance in the development and implementation of the project. 5.2 Borrower (a) Government Performance Rating: Satisfactory 23 The government performance is rated as satisfactory because the Government demonstrated its full commitments toward the project. o RTG fulfilled its commitments to achieve the GEO of phasing out consumption of ODSs. The government was able to accelerate the phase-out of CFC, halon, TCA, CTC and methyl bromide consumption faster than prescribed under MP obligations; o Through DIW, RTG effectively controlled the import and export of ODS through a licensing and quota system, which provided incentives for the phase-out of ODS and also for sustaining the phase-out; o DIW also enacted regulations to ban the use of CFCs in the manufacturing of domestic refrigerators in 1997 and commercial refrigeration appliances in 2004, and later with the ban on the use of CFCs and TCA in all manufacturing processes to support the sustainable phase-out of ODS in 2005; o Thailand was the first developing country that promulgated regulations to prohibit the use of CFCs in the manufacture of domestic refrigerators and prohibit the import of CFC- based domestic refrigerators in 1997, which was only one year after the completed phase- out of CFCs in developed countries; and o Thailand was one of the first two countries that decided to implement the national/sectoral phase-out approach to phase out the remaining consumption of ODS in small and medium size enterprises. The national/sectoral approach was later employed as a norm for the operation of the Multilateral Fund. DIW, DOA and other government agencies cooperated and established practical and comprehensive implementation policies to implement the MP and phase-out ODS so that most activities could be implemented and accomplished as planned. The Ministry of Commerce enacted regulations to prohibit the import of CFC based refrigeration appliances. The Food and Drug Administration issued an announcement to withdraw registration of CFC-MDI which effectively resulted in the ban on imports of CFC metered dose inhalers. The Cabinet also approved an amendment of the Ministerial Decree of the Transportation Act to include an inspection of refrigerant in the MAC systems as part of the annual vehicle inspection. (b) Implementing Agency or Agencies Performance Rating: Satisfactory Performance of DIW as the leading implementing agency for the Project was mixed. It was highly satisfactory during the initial stages of implementation from 1994-2006 but then dropped to moderately satisfactory afterwards due to the implementation delay. The implementation of the remaining tasks after 2007 faced considerable implementation delays. Frequent changes of the Division Chief position who oversaw the NOU exacerbated the situation as the new chief typically arrived with little knowledge of ODS issues which created a constant learning curve and caused implementation delays. While rotation of staff is normal, having five chiefs within 18 months was excessive. DOA’s performance in implementing NMBPP is considered satisfactory. There were start-up delays but implementation was on schedule afterwards. The DIW-PMU and DOA-PMU maintained adequate records and documentation as required. The financial management system of the project was found moderately satisfactory for DIW-PMU and satisfactory for DOA-PMU. External audits were conducted annually by independent auditors 24 and the audit opinions were unqualified (clean). The management letters did not reveal any major accountability or internal control issues. Audit reports were submitted timely for DOA-PMU. Overall performance of procurement implementation was moderately satisfactory. There were excessive delays in procuring refrigerant identifiers for DLT and DSD which might have undermined DIW’s working relationship with the two long time partners. In spite of delays, refrigerant identifiers were later delivered to both agencies as agreed. The performances of IFCT, TMB and GSB as financial agents for the investment components are rated satisfactory. The sub- project appraisal reports and the Project Completion Reports (PCRs) were prepared in conformity with OPG requirements and the ExCom format respectively. Documentation and filing system were systematically maintained. The performances of DIW varied over the life of the Project and also varied across the implementing agencies: DIW, DOA, IFCT, TMB and GSB. The implementing agencies were able to successfully implement activities in the most complicate servicing sector to deal with thousand of servicing workshops using their limited resources. However, there were some shortcomings in the procurement or other operational issues, but solutions were found and implemented. This section is therefore rated as satisfactory. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The overall borrower performance is rated as satisfactory as the performance of both the Government and implementing agencies are rated as satisfactory as mentioned previously 6. Lessons Learned Lessons learned from project preparation and implementations are as follows: Effectiveness of integrated approaches: Technical and financial assistance from the MLF alone would not have been enough to achieve the project’s objectives. Commitment from the government and related stakeholders to the phase-out obligations was critical to ensure compliance with all obligations in a smooth and sustainable manner. Integration of regulatory frameworks, capacity building and technical and financial assistance should be considered as the optimal approach. Effectiveness of PMU: PMU was established to be responsible for the operation of the multi- year project namely NCFCP and NMBPP. Due to a number of activities to be carried out under the multi-year project, PMU should be staffed with competent and skilled personnel to ensure effective implementation and delivery of the multi-year project in the future such as HCFC Phaseout Project. This was demonstrated by outstanding performance of DIW-PMU during the early stages of implementation and by DOA-PMU. Transition plan: The disbanding of the DIW-PMU in January 2007, while in line with the NCFCP plan and budget, led to severe disruptions as the NOU did not have the capacity and experience to implement the remaining tasks. In hindsight, the Bank could have required DIW to have an adequate transitional plan in place before disbanding the PMU and transferring its functions to the understaffed NOU. This would have also ensured the stability of the NOU 25 division chief given there were five changes within 18 months before agreeing to the institutional structure change. Complication of phasing out ODS in servicing sector: Implementation in the service sectors was more complicated than in the manufacturing sector. Beneficiaries were small service workshops, who normally did not want to expose themselves to government oversight and did not have systematic record-keeping and filing. To deal more successfully with small enterprises, incentive should be provided to these workshops to urge them to participate in the program. It is important to establish simple eligibility criteria (as long as they are not against the relevant guidelines and rules) in providing incentive to these servicing workshops. Monitoring and evaluation. Although the project predated even the old logframe, a tight, well- focused Project Development Objective (PDO) and clear baselines, annual verification and accountability to MP greatly facilitated the monitoring of project progress toward achieving its objectives. However, the Bank should have updated the Results Framework continuously in the ISR for both Bank management and client. Advantages of allowing successful, well-focused operations to continue. This operation lasted almost 19 years from start to finish, but it demonstrates that older projects can be successful by rolling through different aspects of ODS phase-out sequentially. Not having to prepare a new PAD each time a new ODS was introduced for phase-out meant that the team was not distracted by administrative tasks. However, the Bank’s reporting mechanisms (ISR reporting framework) is not well designed to accommodate projects such as this. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The Project was a useful program for Thailand to meet obligations under the Montreal Protocol. It enabled all concerned parties and the public to realize the importance of ODS phase-out and the negative environmental impact from the use of ODSs. The NCFCP provided technical and financial assistance to ODS-consuming enterprises to convert to alternative technologies effectively, strengthened the relationship between the government and private sectors and facilitated the preparation and implementation of HCFC Phase-out Management Plan (HPMP). During the implementation of the Project, there was the lack of sufficient coordination and miscommunication between DIW and Bank during some periods, which delayed the project implementation. The difference in culture might influence the working culture for which the common understanding between two parties became essential. However, at the final period of project implementation, there was regular communications and regular supervision between DIW and the Bank, which resulted in more effective implementation. The Bank played a vital role in providing support to DIW to overcome implementation challenges of the remaining activities of the project. This collaborative and partnership approach resulted in smooth implementation. The Bank staffs were found very competent in the subject, able to work with DIW staffs, and were willing to assist DIW to timely implement the activities. One of the implementation issues faced by DIW was the rotation of government officials. Given that the project duration was long, there were the rotations of the key officers of both the Bank and DIW, which affected the continuity of project implementation and the strategy to implement the project. 26 The NMBPP obviously enhanced business capacity of the participating enterprises in complying with national and international standards/regulations for fumigations and safety. The enterprise’s perception on effective and safe fumigation improved after participating in the NMBPP. (b) Cofinanciers Not applicable. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) Not applicable. 27 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Appraisal Revised Actual/Latest Percentage of Components Estimate Estimate Estimate Appraisal (US$ millions) (US$ millions) (US$ millions) Sub-grant 38.80 32.20 29.07 74.9 FI Agency Fees 1.20 0.97 0.84 70.0 Strengthening of the - Program Management Unit of the Sector Plan 11.45 5.62 n/a Institutional - Strengthening Unallocated 0.38 0.00 n/a Total Baseline Cost 40.00 45.00 35.53 88.8 (b) Financing Appraisal Revised Actual/Latest Type of Percentage Source of Funds Estimate Estimate Estimate Cofinancing of Appraisal (US$ millions) (US$ millions) (US$ millions) In-kind and Montreal Protocol investment Investment Fund (originally 40.00 40.00 32.32 80.8 from private authorized grant amount) sector In-kind and Montreal Protocol investment Investment Fund (increase 0.00 5.00 3.21 n/a from private in grant ceiling) sector Montreal Protocol Investment Fund (Total 40.00 45.00 35.53 88.8 authorized grant amount) 28 Annex 2. Outputs by Component Introduction During the period 1994-2013, the Project implemented the following: Sub-project Appraisal/Revision Approval Actual (US$ million) (US$ million) Disbursement (US$ million) Pre-NCFCP sub-projects 40.00 23.77 19.47 NCFCP 14.73 12.01 NMBPP 5.00 2.90 1.67 IS project 1.54 1.54 Financial intermediary fee Included in above 0.97 0.84 Total 43.91 35.53 Table A2.1 summarizes Project outputs and the outcomes in tabular form. More detail is provided in the text following the table. Table A2.1: Project Outputs and Outcome APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME Pre-NCFCP Sub-projects 20 investment sub-projects Foam Sector implemented excluding 2 cancelled 434.85 ODP tons phased-out sub-projects. Implementation of 45-55 3,000-4,000 ODP tons individual investment sub- 20 investment sub-projects phased-out projects across various sectors implemented, excluding one cancelled 1,129.41 ODP tons phased- Refrigeration Sector sub-project. There were two sub- out projects covering small and medium- size enterprises and servicing 29 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME workshops. 10 investment sub-projects Solvents Sector implemented, excluding one cancelled 96.02 ODP tons phased-out sub-project. 2 investment sub-projects Halon (fire fighting) 717.40 ODP tons phased-out implemented. NCFCP Sub-projects – Manufacturing Phase-out of 30 ODP tons of One enterprise signed the sub-grant Aerosol sector industry had CFC-11 and CFC-12 used in agreement but cancelled after deciding been completely. CFCs Aerosol Sector Implementation of 3 sub-projects aerosol manufacturing sector to stop manufacturing the product. phased out and regulation and regulation to ban use of Two other enterprises converted on established as planned CFCs is issued their own. 53 enterprises confirmed interest. 29 enterprises signed individual sub- Phase-out of 643 ODP tons CFCs phase out and Implementation of sub-projects grant agreement. 14 enterprises Foam Sector used in foam manufacturing regulation established as covering 89 enterprises covered under group sub-project. The sector planned. other 10 were either not eligible for financing, or cancelled. Phase-out of 51.2 ODP tons Sector completely converted. of CFC-113 used in solvent Solvent Sector – manufacturing 1 sub-project was implemented. Three CFC phased out and Implementation of 4 sub-projects manufacturing sector and using CFC-113 did not want to participate. regulation established as regulation to ban use of planned. CFCs is issued. Sector completely converted Three sub-projects using TCA, and one and TCA phased out as Solvent Sector – manufacturing Implementation of 6 sub-projects Phase-out of TCA used in using CTC were completed. Two planned. Regulation to ban using TCA and CTC (3 for TCA and 3 for CTC) solvent manufacturing sector enterprises using CFC did not want to the use of TCA was participate. established. Implementation of 1 group sub- Provision of ventilation units 214 garment and textile factories Ventilation system provided Solvent Sector – garment and project to assist approximately to the industry and enhance received subsidy for acquisition of to garment and textile textile 1,400 garment and textile environmental concern in ventilation system industries proved that 30 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME factories garment SME ventilation system could effectively reduce effect from 1,1,2-TCE used. NCFCP – Technical Assistance The Allergy and Immunology Society of Thailand was appointed to undertake the assignment. Data Phase-out strategy prepared collection, development of phase-out Development of CFC MDI strategy , and information Development of CFC MDI Technical Assistance (TA) for phase-out strategy and phase-out strategy and dissemination was undertaken Phase-out of MDIs participation from key strategy was disseminated as FDA regulation had been issued to ban stakeholders planned import of MDI containing CFCs in Dissemination of information Salbutamol, Futicasone, and Sodium materials for health care industry Gromoglycate starting from January 1, 2006 One workshop was organized to train Two workshops to train 60 trainers from 45 ATCs. 58 sets of basic trainers, two each from 30 servicing equipment and 29 units of selected authorized training recovery & recycling machines were Establishment of training Training centers established centers (ATC). Provision of two procured for the ATCs Train-the-Trainer Program in centers for undertaking and provided training to sets of basic servicing equipment ExCom approved additional activity to the Refrigeration Servicing certification workshops for technicians from (vacuum pump, pressure gauge, strengthen training institutes of OVEC. Sector refrigeration service refrigeration service shops leak detector and electronic Two training workshops were technicians under revised plan charging equipment) and one organized. 90 sets of basic servicing recovery & recycling machine to equipment plus R&R machine and each participating ATC. refrigerant identifier were procured for 90 training institutes under OVEC. Technicians of refrigeration Technicians of refrigeration service shops received 45 workshops were organized and service shops trained. Train service technicians from Certification of Service training and their capacities resulted in the training of about 3,110 Retrofitting procedures put 1,300 refrigeration servicing Technicians were strengthened in technicians from 1,734 refrigeration in training curriculum and workshops particular, awareness of servicing workshops. educated to refrigeration CFCs phase-out service shops as planned. 31 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME Develop and production of MAC inspection manual. Organizing 10 training workshops for Regulation to include MAC DIW agreed to provide 202 refrigerant technicians from 700 vehicle inspection requirement in Regulation had been put in identifiers to inspection stations owned Mandatory Requirement for inspection stations. Provision of place and MAC inspection in place and MAC inspection by DLT and 468 units to those owned MAC Inspection refrigerant identifies to 80 operation. Reduction of CFC had been in operation at by private. Only 87 units were inspection stations at DLT used by preventing reverse Headquarter. provided to DLT. Headquarter and provincial retrofit of MAC system. offices and about 600 independent inspection stations. Two workshops to train 60 trainers, two each from 30 selected authorized training 46 training centers of DSD were centers (ATC). Provision of two Establishment of training Training centers established selected as ATC. Two workshops Train-the-Trainer Program in sets of basic servicing equipment centers for undertaking and provided training to organized. 62 sets of training MAC Servicing Sector (vacuum pump, pressure gauge, certification workshops for technicians from MAC equipment and 29 units of R&R leak detector and electronic MAC service technicians service shops as planned machines were provided. charging equipment) and one recovery & recycling machine to each participating ATC. Technicians of MAC service Technicians of MAC service shops received training and 100 workshops were organized and shops trained. Retrofitting Certification of MAC Service Train service technicians from their capacities were resulting in the training of about 5,750 procedures put in training Technicians 2,750 MAC service shops strengthened in particular, technicians from 4,050 MAC servicing curriculum and educated to awareness of CFCs phase- workshops. MAC service shops as out and retrofitting capacity planned. Refrigeration service shops 1,714 vouchers were issued to certified Financial subsidy provided to Refrigeration service shops undergone training and refrigeration service shops or 126.9% Financial Subsidy for 1,300 refrigeration service shops equipped with basic set of purchased basic set of of the target. Some 1,643 vouchers or Procurement of Refrigeration to buy a basic set of tools for equipment for servicing equipment with subsidy as approximately 95.8% of total vouchers Maintenance Tools properly repair non-ODS HFC-134a refrigeration planned. CFC-12 issued were claimed and funds refrigeration system system. consumption reduced as disbursed planned. 32 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME MAC service shops MAC service shops 3,751 vouchers were issued to certified equipped with basic set of undergone training and Financial subsidy provided to MAC service shop which was 136.4% Financial Subsidy for equipment for servicing purchased basic set of 2,750 MAC service shops to buy of the target. Of which, 3,533 vouchers Procurement of MAC HFC-134a MAC. Reduction equipment with subsidy as a basic set of tools for properly or approximately 94.2% of total Maintenance Tools of CFC-12 through planned. CFC-12 repair non-ODS MACs vouchers issued were claimed and fund retrofitting CFC-12 to HFC- consumption reduced as disbursed 134a system planned. MAC service shops Financial subsidy provided to 179 vouchers were issued of which, Financial Subsidy for equipped with R&R Financial subsidy provided MAC service shops consumed 166 vouchers or approximately 92.7% Procurement of MAC Recovery machine. Reduction of CFC- to purchase 179 sets which more than 80kg ODS per month of total vouchers issued were claimed & Recycling Machines 12 through the use of R&R was 28.2% of the target. to purchase 635 R&R machine and fund disbursed. machine NCFCP – Strengthen the Project Management Unit and other Capacity Building Phase-out activities under the NCFCP implemented as Phase-out activities under planned though some PMU established to implement the NCFCP implemented PMU established and operated as an activities did not achieve the CFC phase-out activities under and contribute to Thailand independent unit during 2003-2007. PMU targets or were cancelled. NCFCP and assisted NOU to meeting the obligations of PMU function was transferred to the Nevertheless, Thailand was develop policy and regulations the MP and the agreement NOU during 2007-2013. able to meet the obligations with ExCom. of the MP and the agreement with ExCom. Two training workshops were As planned as the Customs Training materials developed and Effective control in import organized and 60 trainers were trained. check points equipped with training workshops organized. 60 and export of OD by 60 units of refrigerant identifiers were refrigerant identifiers, Customs Training Program refrigerant identifiers provided to strengthening capacity of procured and distributed to the Customs officials trained and 29 major port/entry points and Customs officials in ODS Customs Department. The trainers customs training on ODS Customs training institute. import/export inspection subsequently trained 700 customs control put in Customs officers. training curriculum NMBPP Sub-projects 33 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME Type 1: Owner of storage Implementation of 23 sub- Reduce MB consumption facility with in-house projects to (i) modify existing through the use of MB MB consumption for 13 enterprises signed sub-grant fumigation of MB or use more silo, (ii) acquisition of fumigation alternatives and structural fumigation agreements than 50,000 tablets of phosphine equipment, and (iii) acquisition improvement in pest reduced as planned. per year of IPM equipment management control Provision of basic fumigation 83 voucher for basic fumigation Type 2: Owner of storage equipment (monitoring pump and Reduce MB consumption equipment and 81 vouchers for IPM facility without in-house consumable detector tubes, and through the use of MB MB consumption for equipment were provided to the fumigation of MB or use less gas mask) and IPM equipment alternatives and structural fumigation enterprises. 2 enterprises did not need than 50,000 tablets of phosphine (industrial vacuum cleaner, light improvement in pest reduced as planned. basic fumigation equipment since they per year trap and insecticide knapsack management control did not have in-house fumigation. sprayer) 19 enterprises received vouchers for a set of electronic phosphine monitoring Provision of fumigation Strengthen the capacity of device and gas mask. The remaining Type 3: Fumigation servicing monitoring device to 41 commercial fumigators to enterprises were not eligible for MLF Commercial fumigators companies commercial fumigation servicing use MB alternatives fund (either owned by developed companies countries or established after the cut- off date) NMBPP – Regulations and Technical Assistance DOA issued Notification Reduce the use of methyl Establish pest control standards, “Accreditation scheme on Reduction in the use of Accreditation system for storage bromide and other pesticides hygiene requirements and manufacturing process for issuance of fumigants (including MB) in facilities through improvement in accreditation phytosanitary certificate for processed processed commodities. operation commodities” in 2008 One training workshop to train Establishment of training 8 training centers of OARD were Training centers established 30 trainers and establishment of centers for undertaking selected as ATC and given training and provided training to MB Train-the-Trainer 10 training centers. Provision of training workshops for MB equipment. One workshop was users and local fumigators as 10 sets of training equipment. users and local fumigators organized to train the trainers. planned MB users and local Ten workshops were organized and 120 workshops over the period of fumigators received training resulted in the training of about 150 4 years to train up to 2,400 local MB users and fumigators Certification of all fumigators and their capacities were enterprises plus individual training for fumigators (3 workshops per year trained. strengthened in particular, 13 enterprises under individual sub- at 10 ATC for 4 years duration) awareness of MB phase-out, project (voluntary). Moreover, DOA 34 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME knowledge on alternatives through its compulsory requirement and fumigation techniques, provided series of training to and to improve safety during fumigators to issue fumigation license.. fumigation NMBPP – Strengthen the Project Management Unit and other Capacity Building Phase-out activities under Phase-out activities under PMU established to implement the NMBP implemented and the NMBPP implemented as MB phase-out activities under contribute to Thailand PMU established and operated under planned. Thailand was able PMU NMBPP and assisted DOA to meeting the obligations of DOA during 2006-2013. to meet the obligations of the develop policy and regulations the MP and the agreement MP and the agreement with with ExCom. ExCom. The laboratory was established under A study was carried across Establish a laboratory and Enhance long-term Capacity building on insect the Post-Harvest and Products Thailand in 2010 to monitoring program on insect sustainability to use resistance control Processing Research and Development determine insect resistance resistance to phosphine phosphine as MB alternative Office to phosphine. Staffs from the Post-Harvest and Products Processing Research and Development Office were trained on grain resistance inspection, monitoring and management in Australia in 2007. Knowledge and experiences Moreover, officers from the insect were used in the operation of Strengthened capacity on resistance control unit attended insect resistance control unit, Capacity building of DOA Overseas training for senior policies and procedures to training in USA in 2009 to learn pest management of insect pest in officials DOA officials and track and control non-QPS management in storage facilities and storage facilities, fumigation MB consumption fumigation and other pest control and recapture of fumigant technologies In 2010, DOA conducted techniques and certification a fumigation visit to New Zealand to system. learn fumigation and MB recapture techniques, risk assessment of chemical pesticide and certification system. 35 APPROVED ACTUAL PROJECT ACTIVITIES OUTPUTS OUTCOME OUTPUTS OUTCOME MIS was established and had been in MIS established as planned Development of a MIS to operation since August 2009. It linked Effective recording and and facilitate effective facilitate effective recording and DOA’s Pesticide Regulatory Sub- Establishment of MIS monitoring of import control recording and monitoring of monitoring of import control and division with plant quarantine stations and use of MB MB import and use in use of MB around the country as well as Thailand. registered MB importers. 36 A2.1 Pre-NCFCP Sub-projects The MLF ExCom approved 56 sub-projects for Thailand in solvents, refrigeration, air- conditioning, foams and recycling. Each sub-project included technical assistance to support participating enterprises with technology transfer, design, training and implementation. Fifty-two sub-projects were fully implemented, while the remaining four sub-projects were cancelled. Sectors Approved Implemented No. of Projects Appraisal No. of Projects Actual Estimate (US$ M) Disbursement (US$ M) Foam 22 2.78 20 2.47 Refrigeration 21 14.44 20 11.82 Solvent 11 5.56 10 4.62 Halon 2 0.99 2 0.56 Total 56 23.77 52 19.47 Of the 52 sub-projects implemented a total of 2,377.68 ODP tons of CFCs, methyl chloroform and halons were phased-out as follows: − Twenty two sub-projects were approved by the ExCom, but twenty sub-projects were implemented in the foam manufacturing sector resulting in the phase-out of 434.85 ODP tonnes. − Twenty one sub-projects were approved by the ExCom, but twenty sub-projects were implemented in the refrigeration manufacturing sector resulting in the phase-out of 1,129.41 ODP tonnes. − Eleven sub-projects approved by the ExCom for the solvent sector, ten sub-projects were successfully implemented resulting in the phase-out of 96.02 ODP tonnes. − Two sub-projects in the halon sector – Terminal halon-1211 and halon-1301 phase-out project for fire equipment manufacturers and suppliers converting to ABC powder, CO2, HFC-227ea and inert gases and Halon management programme, halon recovery, recycling and banking. The ODS phaseout achieved was 717.40 ODP tonnes. Sectors No. of Projects Actual ODS phased out Cost- Disbursement (ODP tons) effectiveness (US$ M) Threshold (US$/kg) Foam 20 2.47 434.85 5.68 Refrigeration 20 11.82 1,129.41 10.47 Solvent 10 4.62 96.02 48.11 Halon 2 0.56 717.40 0.78 Total 52 19.47 2,377.68 8.19 While the ExCom approved these sub-projects individually, the 20 sub-projects under the refrigeration sector covered the majority of the enterprises in the domestic and commercial refrigerator subsectors. These sub-projects enabled RTG to enact supporting regulations to ban the use of CFCs after the completion of the sub-projects. These regulations included: − Notification of Ministry of Industry issued in 1997. It prohibited the use of CFCs in the manufacturing of household refrigerators; − Notification of Ministry of Commerce issued in 1997. It prohibited the import of household refrigerators containing CFCs; 37 − Notification of Ministry of Industry issued in 2004. It prohibited the use of CFCs in the manufacturing of commercial refrigerator. A2.2 National CFC Phase-out Plan (NCFCP) NCFCP Implementation The introduction of the NCFCP into the Project in 2001 allowed RTG to tackle the phase-out of the remaining CFC consumption in a manner consistent with the control schedule of the MP. The agreement between the MLF ExCom and RTG required that the country meet annual performance targets in exchange for the release of subsequent tranches of funds which had been pre-approved ‘in principle’ by the ExCom. Achievement of these annual performance targets also necessarily supported achievement of the GEO. A2.2.1 Manufacturing Sector The NCFCP identified remaining use of ODS by small and medium-size enterprises in the aerosol, foam, garment and textile, and solvent sector. Table A2.2 lists the activities and briefly describes each one. Table A2.2: Activities under NCFCP Project Activities Description Investment Activities Aerosol Sector Implementation of 3 conversion sub-projects to replace the use of CFCs as propellants to hydrocarbon aerosol propellant. Foam Sector Implementation of conversion sub-projects covering 89 enterprises to replace CFC-11 to hydrocarbon or HCFC-141b. Solvent Sector Implementation of 4 conversion sub-projects for manufacturers using CFC-113 Implementation of 6 conversion sub-projects for manufacturers using TCA and CTC (3 for TCA and 3 for CTC) Implementation of 1 group sub-project to assist approximately 1,400 garment and textile factories to acquire ventilation system and training for replacing TCA with 1,1,2-trichloroethylene in spot cleaning. Technical Assistance and Training Activities Technical Assistance (TA) for Prepare a phase-out strategy to promote the use of non-CFC alternatives Phase-out of MDIs Dissemination of information materials for health care industry Train-the-Trainer Program in the Two workshops to train 60 trainers, two each from 30 selected authorized Refrigeration Servicing Sector training centers (ATC). Provision of two sets of basic servicing equipment (vacuum pumps, pressure gauges, leak detectors, electronic charging equipment and recovery & recycling machines) to each participating ATC. Certification of Service Technicians Train service technicians from 1,300 refrigeration servicing workshops Mandatory Requirement for MAC The Department of Land Transport (DLT), which required that all vehicles Inspection over seven years undergo annual engine inspections, would expand its inspection requirement to MACs. The Project would support the training of inspectors from about 680 private and government-owned inspection stations and provide each station with a refrigerant identifier which could identify CFC- 12, HFC-134a and hydrocarbons. Train-the-Trainer Program in MAC Two workshops to train 60 trainers, two each from 30 selected authorized Servicing Sector training centers (ATC). Provision of two sets of basic servicing equipment (vacuum pump, pressure gauge, leak detector, electronic charging equipment and recovery & recycling machine) to each participating ATC. Certification of MAC Service Train service technicians from 2,750 MAC service shops Technicians Financial Subsidy for Procurement Financial subsidy to be provided to 1,300 refrigeration service shops to buy a 38 Project Activities Description of Maintenance Tools and for basic set of tools to properly repair non-ODS refrigeration systems Procurement of Recovery and Financial subsidy to be provided to 2,750 MAC service shops to buy a basic set Recycling (R&R) Machines of tools to properly repair non-ODS MACs Financial subsidy to be provided to MAC service shops consuming more than 80kg ODS per month to purchase 635 R&R machines Capacity Building Activities PMU PMU to be established to implement CFC phase-out activities under NCFCP and assist NOU to develop policy and regulations Customs Training Program Training materials developed and train-the-trainer program to be provided to the Customs training school of the Customs Department. Two refrigerant identifiers would also be given to each of the 29 major port/entry points across the country and the training institute of the Customs Department. Aerosol-NCFCP: According to the NCFCP, three aerosol manufacturing enterprises were eligible for financial assistance. One enterprise signed a sub-grant agreement with the GSB, but the sub-project was subsequently cancelled as the enterprise decided to stop manufacturing the products to be financed under NCFCP. The other two enterprises decided not to participate in the NCFCP because they had already converted to alternative technology on their own. Foam-NCFCP: About 100 foam manufacturing enterprises that had never received any financial assistance from the MLF were identified during the preparation of NCFCP. These enterprises were involved in rigid polyurethane, flexible polyurethane and integral skin foam applications. To implement activities in the foam sector, DIW-PMU invited all polyol suppliers and system houses to submit list of their interested in benefiting from the NCFCP. Finally, 53 foam enterprises expressed their interest in the NCFCP. The difference between the figure in the NCFCP (X) and actual implementation (Y) was because: − Some enterprises listed in the NCFCP were duplicates because different names were submitted to DIW during the preparation of NCFCP; and − Due to the high price of CFC-11, some enterprises could not afford the higher production cost and decided to convert to alternative technology on their own and did not want reimbursement from the NCFCP. DIW-PMU also established the funding criteria for eligible foam enterprises, which were used as the basis to determine eligible costs for each foam enterprise. Two implementation modalities were implemented: individual sub-project and group sub-project: a) Individual sub-projects: Funding was provided for acquisition of foam injection machines for conversion, technology transfer and training to the enterprises, and expenditures for testing and trials. Technical assistance was provided by the polyol suppliers/system houses. Thirty-eight foam enterprises were identified under individual sub-projects, of which 30 enterprises received financing from the Project, while two were cancelled at project appraisal. The remaining six enterprises were deemed ineligible for financing. b) Group sub-projects: Beneficiaries were enterprises who had low CFC consumption in their process (maximum consumption of CFCs was one MT per year). The group sub- project was implemented through the voucher scheme, which was valued at US$6,000. One set of equipment comprising a stirrer and blade, mixing container, ventilation equipment and a chemical container shelf was provided to beneficiaries. There were 16 foam enterprises identified under the group sub-project, of which 14 received financing from the Project, while one enterprise cancelled participating of the project during implementation and one enterprise was not approved by DIW-PMU. 39 Garment and Textile-NCFCP: This component aimed to phase out the use of 1,1,1- trichloroethane in the existing garment and textile factories. The project was implemented as a group sub-project through the voucher scheme with assistance from the Thailand Textile Institute (THTI). The level of subsidy for acquisition of ventilation systems was 26,900 Baht. The NCFCP was able to assist 214 garment and textile factories in acquiring ventilation systems and training them on the standard exposure limits for 1,1,2 trichloroethylene. Moreover, THTI worked closely with the Department of Labour Protection and Welfare, National Institute for the Improvement of Working Conditions and Environment, Ministry of Labour, and Department of Public Health, Department of Disease Control, Ministry of Public Health, and Department of Industrial Works, Ministry of Industry, and Faculty of Medicine, Mahidol University to develop and finalize exposure limits for 1,1,2 trichloroethylene. Solvent-NCFCP: The NCFCP proposed to assist four enterprises consuming CFC-113, three enterprises consuming 1,1,1,-trichloroethane and one enterprise consuming carbon tetrachloride to convert to alternative technology. DIW-PMU assisted five enterprises (one for CFC-113, three for 1,1,1-trichloroethane and one for carbon tetrachloride) under the NCFCP. Implementation was handled directly by DIW-PMU as an individual sub-project. A2.2.2 Servicing Sector Implementation of the investment component in the servicing sector started with the Mobile Air Conditioning (MAC) servicing sector in 2003. After activities were completed in the MAC servicing sector, DIW-PMU implemented activities in the refrigeration servicing sector, which was completed in 2010. MAC Servicing Sector: Implementation of activities for the MAC servicing sectors started with a train-the-trainer workshop to train 30 trainers in 2003. Under this component, 46 training centers of the Department of Skill Development (DSD) located across Thailand were designated as authorized training centers (ATCs). Two training workshops were organized to train these ATCs. Training equipment comprising 62 sets of basic servicing equipment (vacuum pumps, pressure gauges, leak detectors and electronic charging equipment) and 29 units of recovery/recycling machines were procured for the ATCs. The cost of organizing train-the-trainer workshop and procurement of equipment to ATCs (US$202,059) was funded from the NCFCP. Certification of servicing technicians by these ATCs was implemented during February 2004- May 2008 in five phases. About 100 training workshops were organized under this component. About 5,750 technicians from 4,050 MAC service shops were trained, which exceeded the original target of 2,750 MAC service shops. The cost (US$117,143) of organizing training workshops for certification of servicing technicians was funded from the NCFCP with approval of the ExCom. Basic service tools and Recovery and Recycling (R&R) machines were distributed to MAC servicing workshops through a voucher scheme (group sub-project) which was in line with the ExCom’s approval. DIW-PMU appointed three consulting firms as the group coordinator (GC) to assist DIW in distributing servicing equipment for the MAC servicing sector in March 2005. There were two types of vouchers: (1) vouchers for basic service tools; and (2) vouchers for R&R machines. Basic service tools comprised vacuum pumps, pressure gauges, leak detectors and electronic charging equipment. Although about 4,050 MAC servicing workshops were certified, 40 vouchers were issued to 3,751 beneficiaries, or 136.4% of the NCFCP target. Some 3,533 vouchers or approximately 94.2% of total vouchers issued were exercised and disbursed from the project. The non-use of 218 vouchers was attributed to the fact that some servicing workshops either did not want to avail themselves of the vouchers as they had already had equipment, or the GC could not find servicing workshops during the site visit. With these reasons, there was no action taken by the servicing workshop to exercise the vouchers until the expiration date passed. For the R&R machines, only MAC servicing workshops that proved that they consumed CFC-12 or more than 80 kg per month, could access financial subsidies. The actual number of voucher for R&R machines was only 179 when compared to the original plan of 635 in the NCFCP (28.2% of the target). Of that sum, 166 vouchers or approximately 92.7% of total vouchers issued were exercised and disbursed from the project. The main reason for not exercising this voucher was the high counterpart funding requirement of this machine and uncertainty whether investment could be recovered due to widespread contamination of refrigerants in the MAC sector. Due to the fixed level of funding approved by the ExCom for R&R machine, the project was able to provide financial subsidy of 55% of the equipment cost, while the rest of 45% would be borne by MAC servicing workshop. Risks of collecting contaminated and unusable refrigerants made investment in R&R machine financially unattractive. Refrigeration Servicing Sector: Due to successful project implementation in the MAC servicing sector, the same approach was used for the refrigeration servicing sector, which started in 2006. Forty-five training centers were authorized as ATCs under the refrigeration servicing sector. One workshop for training the trainers was organized in July 2006. Training equipment comprising 58 sets of basic service tools (vacuum pumps, pressure gauges, leak detectors and electronic charging equipment) were procured and provided to these ATCs. The cost of organizing train- the-trainer workshop and procurement of equipment to ATCs (US$76,873) was funded from the NCFCP. Certification of servicing technicians by these ATCs was implemented during December 2008- February 2009 in two phases. About 45 training workshops were organized under this component. Some 3,110 technicians from 1,734 refrigeration servicing workshops were trained, which exceeded the original targets (1,350 MAC servicing workshops). The cost (US$ 48,795) of organizing training workshops for certification of servicing technicians was funded from the NCFCP with approval of the ExCom. Under the refrigeration servicing sector, only basic service tools were distributed to certified servicing workshops through the voucher scheme (group sub-project), which was in line with the ExCom approval. DIW-PMU appointed two consulting firms as GCs to assist DIW in distributing servicing equipment for the refrigeration servicing sector. Although about 1,734 refrigeration servicing workshops were certified, vouchers were issued to 1,714 beneficiaries, which was 126.9% of the NCFCP target of 1,350. Some 1,643 vouchers or approximately 95.8% of the total issued were exercised and disbursed from the project. The difference (71) was attributed to the fact that some servicing workshops either did not want to use the voucher as they already had equipment or the GCs could not find the servicing workshops during the site visit. Given these reasons, there was no action taken by the servicing workshop to exercise the vouchers until the expiration date passed. Having said the above, the RTG met most of its targets especially the certification of servicing technician and provision of basic service tools for both the MAC and refrigeration servicing sectors. The numbers of certified servicing workshops and technicians and number of basic 41 service tools were much higher than the original target. On the contrary, the target of provision of R&R machines was not met and only 28.2% of vouchers were used. . Strengthening Training Capacity of Office of Vocational Education Commission (OVEC): Office of Vocational Education Commission has more than 300 technical colleges that have a division dedicating for air-conditioning and refrigeration training and have on-going cooperation programs with DLT to inspect car conditions and also with EGAT to provide cleaning services to household air-conditioners. To sustain the phaseout of CFCs in servicing sector, DIW collaborated with Bureau of Cooperation of OVEC in April 2009 to explore the cooperation to extend the training on good practice for servicing to be conducted by OVEC. OVEC confirmed that this activity is in line with their curriculum and expressed their interest to partner with DIW in further activities to strengthen capacity of service technicians and to ensure sustainable phase- out of CFCs. This activity was not in the original plan of the NCFCP. DIW and the World Bank, with approval of the ExCom, agreed to allocate savings from other activities under the NCFCP to strengthen training capacity of the 90 vocational colleges. This sub-project would enable vocational colleges under OVEC to properly instruct their student to follow the code of good practice for servicing equipment using alternative refrigerant. After completion of the sub-project, technical students who would become servicing technicians in the future would be trained to use equipment and familiarize with proper servicing practice in order to ensure good performance and condition of equipment (avoid frequency of repair) and to eliminate venting of refrigerant to the atmosphere by recovery, recycling and reuse of refrigerant. To strengthen training institutes of OVEC by providing training to their students, the project provided training and training equipment for OVEC. Two training workshops were organized to provide training to trainers from OVEC across Thailand. Ninety sets of servicing equipment (vacuum pumps, pressure gauges, leak detectors, electronic charging equipment, R&R machines and refrigerant identifiers) were provided to 90 training institutes of OVEC through the voucher scheme. As can be seen from Figure 1 below, the implementation of pre-NCFCP and NCFCP enabled RTG to control consumption of CFC in accordance with the Montreal Protocol schedule and the maximum allowable consumption as agreed with the ExCom as part of NCFCP. 42 Figure 1: Consumption of CFCs in Thailand (ODP Tons) A2.3 National Methyl Bromide Phase-out Plan (NMBPP) The NMBPP aimed to assist Thailand to phase out consumption of methyl bromide by January 1, 2013. It comprised both investment activities and technical assistance and training. The list of activities under NMBPP is shown in Table A2.3. Table A2.3: Activities under NMBPP Project Activities Description Investment Activities Type 1: Owner of storage facility Implementation of 23 sub-projects to (i) modify existing silo, (ii) acquisition of with in-house fumigation of MB or fumigation equipment, and (iii) acquisition of IPM equipment use more than 50,000 tablets of phosphine per year Type 2: Owner of storage facility Provision of basic fumigation equipment (monitoring pump and consumable without in-house fumigation of MB detector tubes, and gas mask) and IPM equipment (industrial vacuum cleaner, or use less than 50,000 tablets of light trap and insecticide knapsack sprayer) phosphine per year Type 3: Fumigation servicing Provision of fumigation monitoring device to 41 commercial fumigation companies servicing companies Technical Assistance and Training Accreditation system for storage Establish pest control standards, hygiene requirements and accreditation facilities Train-the-Trainer One training workshop to train 30 trainers and establishment of 10 training centers. Provision of 10 sets of training equipment. Certification of all fumigators 120 workshops over the period of 4 years to train up to 2,400 local fumigators (3 workshops per year at 10 ATC for 4 years duration) 43 Project Activities Description Capacity Building Activities PMU PMU established to implement MB phase-out activities under NMBPP and assisted DOA to develop policy and regulations. Published text books on methyl bromide, phosphine fumigation, video on phosphine fumigation and another text book on Alternatives to MB which included all the topics in insect management. Capacity building on insect Establish a laboratory and monitoring program on insect resistance to resistance control phosphine Capacity building of DOA officials Overseas training for senior DOA officials Establishment of MIS Development of a MIS to facilitate effective recording and monitoring of import control and use of MB Type 1: Owners of storage facilities with in-house fumigation of methyl bromide or have consumption of phosphine more than 50,000 tablets/year: The NMBPP supported 13 of the 23 identified type 1 beneficiary enterprises to properly adopt phosphine fumigation and integrated pest management (IPM) technology to meet the disinfestations of insect pest. These enterprises were large owners of storage facilities for agriculture products such as mill rice, maize, feed mill, tapioca and flour. Given that the beneficiary enterprises would acquire different types of equipment, the implementation of these sub-projects was individual sub-projects (one beneficiary enterprise per one sub-project). The implementation period for Type 1 sub-projects was from July 2009 (submission of first sub-project proposal) – December 2013 (sub-project completion). Depending on the baseline of the beneficiary enterprise, financial support for the project was used for (i) modification of existing silos to ensure gas tightness and sufficient recirculation of phosphine in the silo, (ii) acquisition of fumigation equipment for safe and effective phosphine fumigation (i.e. electronic phosphine monitoring devices, monitoring pumps and consumable detector tubes, explosion-proof portable ventilators, self-contained breathing apparatus (SCBA), face gas masks and replacement canisters for phosphine, fumigation sheets, etc.) and (iii) IPM equipment (light traps, industrial vacuum cleaners, fogging machines, etc.). Type 2: Owners of storage facilities that did not have in-house fumigation or have consumption of phosphine less than 50,000 tablets/year: The NMBPP supported 83 type 2 beneficiary enterprises to strengthen their pest management capacity in their warehouses. Basic fumigation equipment (monitoring pumps and consumable detector tubes - high and low range and face gas masks with replacement canisters for phosphine) and IPM equipment (industrial vacuum cleaners, light traps and insecticide knapsack sprayers) were provided to the beneficiary enterprises. Given that these beneficiary enterprises would receive the same equipment, the implementation was undertaken under a group sub-project using the voucher scheme. The enterprises in these sub-projects ranged from large to small owners of storage facilities for agriculture products and scattered across Thailand. The implementation period for Type 2 sub- projects was from July 2009 (submission of sub-project proposal) - December 2013 (sub-project completion). The beneficiary enterprises that did not have in-house fumigation would receive only vouchers for IPM equipment, while those that had in-house phosphine fumigation would receive two vouchers for basic fumigation equipment and integrated pest management (IPM) equipment. At the end of the sub-project, 83 vouchers for basic fumigation equipment and 81 vouchers for IPM equipment were provided to beneficiary enterprises. Type 3: Fumigation servicing companies: Commercial fumigation servicing companies played a vital role in the phase-out of methyl bromide consumption in Thailand. A number of owners of 44 storage facilities outsourced disinfection needs of their warehouses to commercial fumigation servicing companies; therefore, the share of methyl bromide consumption used by commercial fumigation servicing companies was significant. Some 19 out of the 41 identified commercial fumigators participated in Type 3 sub-projects. The remaining commercial fumigation servicing companies were not eligible for the MLF fund because they were not eligible for MLF funds (either because they were owned by developed countries or established after the cut-off date in December 2004). The implementation period for Type 3sub-projects was July 2008 (submission of first sub-project proposal) – February 2010 (sub-project completion). Participating enterprise would receive a set of electronic phosphine monitoring devices and face gas masks with canisters for phosphine through the voucher scheme. Establishment of Management Information System (MIS): The NMBPP supported DOA to develop and implement the MIS system, which had been in operation since August 2009 after the MIS training in June 2009. The MIS linked DOA’s Pesticide Regulatory Sub-division with Plant Quarantine Stations around the country, as well as with registered methyl bromide importers. The MIS was a decentralized system that allowed related users to enter information into the database from various points (multiple information-entry points). With security system, related users of the MIS would have different accessibility to the MIS to ensure that confidential information would not be accessed by unauthorized parties. When a phytosanitary certificate was issued, the officer would enter the related information on fumigation (i.e. name of exporters, type and amount of product, amount of methyl bromide used, date of fumigation, country of destination etc.) into the MIS database. The Plant Quarantine Stations would then access to the database and enter information to confirm that the commodity had been treated and exported from Thailand. Importers of methyl bromide were required to enter information regarding methyl bromide used for QPS and non-QPS applications of each import license into the MIS database (i.e. type and amount of product, amount of methyl bromide used, date of fumigation, country of destination, name of exporters/enterprises etc). Insect Resistance Control Laboratory: The NMBPP supported DOA to establish the insect resistance control laboratory to study phosphine resistance strains. The laboratory was under the supervision of the Entomology Group of the Post-Harvest and Products Processing Research and Development Office, DOA. Three staff members from the Post-Harvest and Products Processing Research and Development Office in charge of the operation of insect resistance control were trained by the Queensland Department of Primary Industries and Fisheries in Australia in 2007. The study on phosphine resistance revealed that maize weevils (Sitophilus zeamais) were not signaling resistance to phosphine (survey in 2010) but the red rust flour beetle (Tribolium cataneum) lesser grain borer (Rhizopertha dominica) and saw tooth grain beetle (Oryzaephilus surinamensis) showed resistant to phosphine in every part of the country. Establishment of authorized training centers (ATC): PMU-DOA in close collaboration with concerned agencies organized a three-day train-the-trainer workshop to provide training to representatives from the regional offices of the Office of Agricultural Research and Development (OARD) and the Plant Quarantine Stations, which were authorized by DOA as ATCs for training of methyl bromide users. To enable these ATCs to provide training to the enterprises, training equipment comprising electronic phosphine monitoring devices, aspirating pumps and detector tubes, explosion-proof portable ventilators, industrial fans, self-contained breathing apparatuses, face gas masks, personal protection devices (vests; jump suits; hard hats; gloves; safety goggle), phosphine 45 generators, grain probes, fumigation sheets and sand snakes, fumigation accessories (measuring tapes, clamps, sampling tubes), vacuum cleaners, light traps, rodent traps, and projectors were acquired to the ATCs from project support. Training equipment was used to demonstrate the practical training on good practice for fumigation and IPM techniques during the training to the enterprises. Accreditation Scheme on Manufacturing Process for Issuance of Phytosanitary Certificate for Processed Commodities: DOA-PMU in close consultation with Phytosanitary Certificate Issuance Offices, Office of Agricultural Regulation took a proactive step to reduce the use of fumigants (including methyl bromide) in processed commodities. In March 2008, DOA issued DOA’s Notification “Accreditation Scheme on Manufacturing Process for Issuance of Phytosanitary Certification for Processed Commodities”. The notification aimed to eliminate the use of fumigants (including methyl bromide) in processed commodities comprised of: (i) flour, starch and their by-products such as rice paper, tapioca pearl; (ii) dehydrated fruits; (iii) foodstuffs, and food ingredients; and (iv) manufactured agricultural commodities such as natural rubber, wood base and engineered wood base products. Frozen fruits and vegetables are also included in this Notification as they were free from pests. Training on fumigants by agricultural inspectors: To strengthen the enforcement of the regulations on fumigant and pesticide trade, the NMBPP provided supported to the Agricultural Inspection Sub-division of the Office of Agricultural Regulation to add training on fumigants in their training curriculum for dealers of pesticides, fertilizer and other agricultural chemicals. Moreover, the Agricultural Inspection Sub-division undertook the monitoring activity to supervise agricultural input dealers for compliance with the laws and regulations on pesticides, fertilizers and other agricultural chemicals. As can be seen from figure 2, the implementation of NMBPP enabled RTG to control consumption of methyl bromide in accordance with the Montreal Protocol schedule and the maximum allowable consumption as agreed with the ExCom as part of NMBPP. 46 Figure 2: Methyl Bromide Import, Non-QPS Usage (Consumption) and QPS Usage in Thailand (ODP Tons) 47 Annex 3. Economic and Financial Analysis Global-level analyses conducted by the United Nations Environment Programme (UNEP) [‘The Montreal Protocol and the Green Economy] credits the MP with having created enabling conditions that simulated 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 MP 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. And 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 Thai and global societies. An economic analysis that captures the overall Project’s impact on Thailand’s economy would need to include, in addition to the foam, refrigeration and air-conditioning, aerosols and solvent sectors, other productive sectors, consumers and the government. In absence of direct data on the impacts that ozone depletion and climate change have on the health of the Thai population and other socio-economic aspects of Thai life, it is not possible to carry out a project-level quantitative analysis of these aspects. As this Project was designed to help Thailand meet its mandatory international obligations to phase-out ODS, no specific estimate was made of the Project’s likely economic rate of return (ERR), net present value (NPV) or financial rate of return (FRR). The Project’s underlying principle was to compensate firms for cost driven by international agreement that was “external” to their daily business operations. The Montreal Protocol requires enterprises to pay for the estimated financial benefits of technology upgrading or expansion of production capacity, as distinct from the external costs associated with ODS phase-out. However, the Project was never meant to generate a positive rate of return. The financial appraisal conducted by the financial intermediary assisted the project to use the grant funds in an effective manner through ensuring use of competitive procurement and controlling cost at the sub-project level. Therefore, the actual disbursement of the project was lower than the approved amount by the ExCom. Sector Sub-sector ExCom Actual Actual (US$/ ODP kg) Approval Achieved (US$/ODP kg) (US$/ODP kg) Pre-NCFCP Foam General 9.53 Flexible polyurethane (PU) 6.23 Integral skin 16.86 6.38 5.68 Polystyrene/polyethylene 8.22 Rigid PU foam 7.83 Halon General 1.48 2.27 0.78 Refrigeration Commercial 15.21 11.17 10.47 Domestic 13.76 48 Solvent CFC-113 19.73 50.64 48.11 TCA 38.50 Total Pre- n/a 10.45 8.19 NCFCP NCFCP n/a 5.16 4.21 NMBPP n/a 11.70 6.73 Total Project n/a 7.70 6.45 49 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team Members Responsibility/ Names Title Unit Specialty Lending Konrad von Ritter Task manager EA11E Task Management Jeffrey Gutman Chief EA11E Management Financial Nadereh Chamlou Financial Specialist EA11E Management Donald E. Brown Consultant IENIM Consultant Jessica Poppele Ozone Operations Coordinator ENVGC Management Genta Fons Lawyer LEGEA Legal Financial Nipa Siribuddhamas FM Specialist EACTF Management Chinnakorn Chantra Procurement Officer EACTF Procurement Donald Rhatigan Consultant EA11E Environment Supervision/ICR Jitendra Shah Task Team Leader EASES Task Management Manida Unkulvasapaul Task Team Leader EACTF Task Management Steve Maber Task Team Leader ENVMP Task Management Waraporn Hirunwatsiri Task Team Leader EASTS Task Management Neeraj Prasad Manager CCGCC Task Management Mohammed A. Sr. Counsel LEGEN Legal Bekhechi Mei Wang Counsel LEGEN Legal Nina Masako Eejima Sr. Counsel LEGEN Legal David A. Howarth Consultant EACTF Operations Viraj Vithoontien Sr. Environmental Specialist EASER Environment Thanavat Junchaya Sr. Environmental Engineer CCGIA Environment Abdelaziz Lagnaoui Sr. Environmental Specialist LCSEN Environment P. Illangovan Sr. Environmental Specialist EASES Environment Financial Nipa Siribuddhamas Financial Management Specialist EASFM Management Financial Malarak Souksavat Financial Management Analyst EASFM Management Christopher Robert FM Hub Leader for Cambodia, Laos, Financial EASFM Fabling Myanmar and Thailand Management Sirirat Sirijaratwong Procurement Specialist EASR2 Procurement Finn Nielsen Task Team Leader EASUR Task Management Chinnakorn Chantra Procurement Officer EACTF Procurement Kanitta Kaikittipoom Operations Analyst EASTS Operations Helen Chan Sr. Operations Officer EASES Operations Poonyanuch Program Assistant EACTF Administration 50 Chockanapitaksa Catalina Marulanda Environmental Specialist ENVMP Environment Mary-Ellen Folley Sr. Environmental Specialist CCGIA Environment Tanyathon Phetmanee Team Assistant EACTF Environment Sidet Kim Program Assistant EACTF Administration Environment Wasittee Udchachone Consultant EASTS Safeguard Pipat Poopeerasupong Consultant EASTS Environment Nontaya Krairiksh Consultant EASTS Carbon Finance Chutima Lowattanakarn Team Assistant EACTF Administration Fnu Hanny Program Assistant EASER Administration (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ Thousands (including No. of staff weeks travel and consultant costs) Lending FY92 8.14 FY93 61.98 FY94 107.67 Total: 177.79 Supervision/ICR FY95 224.79 FY96 87.14 FY97 129.15 FY98 196.09 FY99 70.25 FY00 120.07 FY01 60.15 FY02 56.64 FY03 76.55 FY04 58.43 FY05 34.81 FY06 36.70 FY07 62.75 FY08 81.96 FY09 61.90 FY10 66.80 FY11 50.79 FY12 21.05 FY13 35.38 FY14 56.78 Total: 1,534.80 51 52 Annex 5. Beneficiary Survey Results The beneficiary satisfaction survey was undertaken in early 2013 as part of the mid-term review (MTR) for the NMBPP. The beneficiary satisfaction survey included three groups of beneficiaries involved in the NMBPP comprising: (i) four beneficiaries who were owners of storage facilities that implemented individual sub-project (called type 1 sub-project 4 ), (ii) six commercial fumigation servicing companies under fumigation servicing company group sub-project (called type 3 sub-project 5 ); and (iii) two importers and four government officials from two plant quarantine stations, Export Quarantine Service Sub-division and Pesticide Regulatory Sub- division of DOA, who were involved in the operation of the MIS. Type 2 sub-project6 was not included under this survey due to the implementation of this sub-project was at the initial stage of implementation. The selection criteria to select the beneficiaries for satisfaction survey included (i) type of agriculture products and (ii) size of the enterprise. The main objective of the survey was to identify specific issues on technical, financial and project implementation support provided to beneficiaries and through sub-grant agreements and operation of MIS. Its focus was three-fold: 1) to identify the aspects for which the beneficiaries accorded importance during implementation, 2) to determine beneficiaries’ perception of project performance/satisfaction, and 3) to determine areas where implementation could have been improved. The results of the satisfaction survey with beneficiaries through sub-projects showed that, on average, beneficiaries placed the importance to most aspects of project implementation comprising of knowledge regarding details of the project, preparation of supporting documents to participate in the NMBPP, technical assistance, training, financial issues and procedures, follow- up during sub-project implementation, updates on news regarding technology, project implementation timeframe, and outcomes/results upon sub-project completion. The results of the satisfaction survey on MIS operations showed that, on average, the importers and government officials appreciated the project’s awareness training and news updates regarding technology, compliance with the licensing system, and procedures for operating the MIS. For Type 1 beneficiaries, their satisfaction was high in most of the evaluated aspects (rating 4-5 on a five-point scale), except on financial issues and procedures, which affected time spent on project implementation. The beneficiaries commented that there were delays in disbursements to beneficiaries when compared to the original plan due to procedures and time spent on processing supporting documents to meet requirements. The overall satisfactory for Type 1 beneficiaries was 82%. For Type 3 beneficiaries, their satisfaction was high in all of the evaluated aspects (rating 4-5 of five-point scale) because of the seamless design of project implementation through 4 Type 1 sub-project: Sub-projects of owners of storage facilities with in-house fumigation of methyl bromide or have consumption of phosphine more than 50,000 tablets/year. The enterprise would implement the sub-project individually. There were 13 type 1 sub- projects under NMBPP. 5 Type 3 sub-project: A group sub-project for ccommercial fumigation servicing companies who are outsourced to perform disinfection needs in the warehouses or shipments. The sub-project was group sub-project using voucher scheme to acquire equipment. There were 19 commercial fumigation servicing companies in this sub-project. 6 Type 2 sub-project: Sub-project of owners of storage facilities that do not have in-house fumigation or have consumption of phosphine less than 50,000 tablets/year. 53 the voucher scheme and direct disbursements to equipment suppliers. The overall satisfactory for Type 3 beneficiaries was 94%. The overall satisfaction with operation of the MIS was 96% because the importers and concerned government officials thought the MIS facilitated importers’ reporting requirements and the MIS helped DOA officers monitor the import and use of methyl bromide through the computerized database rather than using the previous paper-based system. There was no beneficiary survey carried out for the NCFCPP. 54 Annex 6. Stakeholder Workshop Report and Results Not applicable. 55 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR 1. Description 1.1. Background The Royal Thai Government (RTG) acceded to the Montreal Protocol (MP) on July 7, 1989 and ratified all subsequent amendments. Thailand was classified as a country operating under Article 5(1) of the MP and was eligible for technical and financial assistance from the Multilateral Fund for the Implementation of the Montreal Protocol (MLF) to support ODS phase-out activities within its territory. Thailand was not the producer of any of the substances controlled under the MP. Total demands for all controlled chemicals were met through imports. The RTG prepared a Country Programme (CP) outlining the country’s strategy to phase-out ODS consumption. One of the key strategic components of the CP was conversion of ODS technology to ozone-friendly technology in the relevant sectors. 2. Project Objectives, Components and Institutional Framework 2.1. Objectives The overall objective of the Project was to assist the Royal Thai Government in carrying out its Country Program as to phase out the use of ODS within its territory through inter alia: (a) the introduction of appropriate technology measures, (b) the institutional strengthening of responsible government entities and (c) the implementation of specific cost-effective priority investments to reduce consumption of ODS. 2.2. Components and sub-components The ODS phase-out activities in Thailand are classified into the following categories; o Sub-projects approved prior to the National CFCs Phase-out Plan (Pre-NCFCP); o National CFCs Phase-out Project (NCFCP); o National Methyl Bromide Phase-out Plan (NMBPP); o Institutional Strengthening Project (IS Project). 2.2.1. Pre-NCFCP Pre-NCFCP sub-projects were approved by the Executive Committee (ExCom) from 1992 to 2001 and prior to the approval of NCFCP in December 2001. Thailand received approval of total 101 pre-NCFCP sub-projects for the total amount of US$ 35.5 million. Of which, 56 sub-projects were implemented through the Bank (US$24.3 million), while other 45 sub-projects were implemented through UNDP and UNIDO. ODSs phased out from the implementation of Pre- NCFCP sub-project were CFCs, halons, and 1,1,1-trichloroethane. To implement the Pre-NCFCP sub-projects, the RTG entered into the Ozone Projects Trust Fund Grant Agreement (OTF-21926TH) with the World Bank on August 8, 1994 for US$40 million. The Grant Agreement was originally structured as an umbrella program, under which any additional sub-projects approved by the ExCom could be financed. 2.2.2. NCFCP 56 Thailand National CFCs Phase-out Plan (NCFCP) was jointly prepared by DIW and the Bank to assist Thailand to completely phase-out the remaining consumption7 of CFCs, carbon tetrachloride and 1,1,1-trichloroethane (TCA) by January 1, 2010. The NCFCP was approved by the ExCom at its 35th Meeting in December 2001 for the total funding level of US$14.7 million. NCFCP comprised a combination of ODS phase-out sub-projects and capacity building activities to be implemented over a period of nine years during 2002-2010. In addition, the NCFCP also included policy and regulatory measures to ensure the sustainable phase out of ODSs resulted from sub-projects and capacity building activities. 2.2.3. NMBPP Thailand National Methyl Bromide Phase-out Plan (NMBPP) was jointly prepared by the Department of Agriculture (DOA) and the Bank to assist Thailand to meet phase-out obligations of methyl bromide under the MP. The NMBPP was approved by the ExCom at its 44th Meeting in December 2004. The funding level of US$2.9 million from the Multilateral Fund (MLF) was approved to the Royal Thai Government (RTG) to cover part of the phase-out costs over a period of nine years during 2005-2013, with a total of 241.8 ODP tonnes of methyl bromide to be phased out. 2.2.4. IS Project As part of the effort to assist Thailand to phase out ODS consumption in the country, DIW through its National Ozone Unit (NOU) has implemented institutional strengthening activities under the program called “Institutional Strengthening Project (IS Project)” to strengthen capacity of the NOU in meeting obligations under the Montreal Protocol. At the 35th meeting of the ExCom in 2001, the ExCom approved DIW’s request to transfer IS Project from UNDP to the Bank effectively since 1 January 2002. Like capacity building activities of the NCFCP, the IS project comprised of capacity building activities, which were executed through provision of equipment, consultants’ services, training and workshop of NOU and other agencies including public awareness activities, and incremental operating cost incurred from implementation of IS activities. 2.3. Institutional Framework 2.3.1. National Given that the use of ODS stems from industry, the RTG appointed the Ministry of Industry (MOI) as the responsible agency for the implementation of the Protocol and its amendments. The DIW was, in turn, designated by the MOI to enforce the Hazardous Substances Act, the framework law that controls the import, export and use of ODS. 7 3,066 ODP tons of CFCs, 7.52 ODP tons of CTC, and 34 ODP tones of TCA 57 After the approval of the NCFCP, DIW set up the Program Management Unit (DIW-PMU) to prepare, plan, implement and monitor implementation of NCFCP and to assist DIW to enforce regulations. With respect to methyl bromide, its main use was in the fumigation of agricultural products, hence the DOA was assigned by the RTG to be the national coordinating agency of the NMBPP. The PMU (DOA-PMU) was also established to prepare, plan, implement and monitor implementation of NMBPP. The Industrial Finance Corporation of Thailand (IFCT) was assigned as the financial intermediary of the Project. The Government Savings Bank (GSB) was later assigned as the second financial intermediary to assist in the implementation of NCFCP and NMBPP which involved significant number of SMEs. 2.3.2. International The World Bank was the implementing agency for the Thailand ODS Phase-out Project. The Bank helped Thailand to develop sub-project proposals, NCFCP and NMBPP. The Bank had the responsibilities to provide policy and technical advices, monitor and verifying the progress, and other aspects needed during the implementation of the Project including channeling of financial resources from the MLF. 3. Design, Implementation and Impact 3.1. Assessment of Design The Grant Agreement was originally structured as an umbrella program, under which any additional sub-projects approved by the ExCom could be financed. The design of the GA was flexible and was amended to accommodate implementation of the NCFCP, NMBPP and the Institutional Strengthening (IS) project. In terms of the design of the NCFCP and NMBPP, the establishment of the PMUs as an independent unit within DIW and DOA had allowed the NCFCP and NMBPP to be implemented effectively. 3.2. Main results achieved 3.2.1. Pre-NCFCP There were 56 Pre-NCFCP sub-projects approved under the Grant Agreement. Of which, 52 sub- projects were fully implemented, while the remaining four sub-projects were cancelled by the enterprises. The 52 completed sub-projects were able to directly eliminate about 2,940.6 ODP tones of CFC-11, CFC-12, CFC-113, 1,1,1-trichloroethane, halon 1201 and halon 1301 from Thailand annual consumption. 3.2.2. NCFCP Without the NCFCP, it was likely that Thailand would not be able to meet phase-out obligations of CFCs during 2007-2010. Both investment and institutional development activities under the NCFCP assisted Thailand to sustainably reduce consumption of ODS from 2003 onwards. About 3,066 ODP tones of CFCs, 34 ODP tons of 1,1,1-trichloroethane and 7.52 ODP tons carbon tetrachloride was phased out during this period. 58 3.2.3. NMBPP The NMBPP assisted the RTG to phase out remaining consumption of methyl bromide for non- QPS applications by December 31, 2013 as agreed with the ExCom. It is important to highlight that the NMBPP also contributed to the reduction of methyl bromide use for QPS applications, which is still exempted under the MP. While methyl bromide use for QPS application was rising from 2005 to 2007, the NMBPP was able to reverse the trend and reduce of methyl bromide use for QPS application. This was caused by (i) the investment activities and training provided to the beneficiary enterprises, which encouraged the enterprises to introduce the use of phosphine and Integrated Pest Management (IPM) technology to reduce the reliance on methyl bromide for export of agricultural product and (ii) the capacity strengthening of DOA in controlling the use of methyl bromide. 3.2.4. Regulations to support ODS phase-out The non-NCFCP sub-projects, NCFCP and NMBPP enabled the RTG to enact the regulation to ban the use of CFCs and other ODS after the completion of sub-projects in the sector. • Thailand was the first developing country that promulgated the regulation to prohibit the use of CFCs in the manufacture of domestic refrigerator and prohibit the import of CFC-based domestic refrigerator in 1997, which was only one year after the completed phaseout in developed countries. • Moreover, the regulations included the ban on the use of CFCs in the manufacture of commercial refrigerator and the ban on the use of CFC-based commercial refrigerator in 2003. • Ban the use of CFCs in the manufacturing sector: In December 2004, the Cabinet approved the legal framework proposed by the Ministry of Industry to ban the use of CFCs and 1,1,1-TCA in the manufacturing sector. The Ministerial Notification of the Factory Act B.E 2535 to ban the use of CFCs and 1,1,1-TCA in the manufacturing sector was signed by the Ministry of Industry in July 2005 and publicized in the Royal Gazette in September 2005. To date, this Ministerial Notification has been effective and enforced by DIW. This announcement constituted a regulatory commitment under the NCFCP program. • Mandatory MAC Inspection Requirement: In March 2004, the Cabinet approved an amendment of the Ministerial Decree of the Transportation Act B.E. 2522 and of the Vehicle Act B.E. 2522 to include an inspection of refrigerant in MAC systems as part of the annual vehicle inspection to be enforced by the DLT. The Ministry of Transportation signed amendment of the Transportation Act B.E. 2522 and of the Vehicle Act B.E. 2522 and became effective since January 2005. • Ban the Import of CFC-MDI: In December 2005, FDA announced lifting off registration of CFC-MDI containing Salbutamol, Futicasone and Sodium Gromoglycate in a total of 13 products from December 31, 2005. With this regulation, these CFC-MDIs were not able to be imported after December 31, 2005 but still could be sold in the market until their stocks are exhausted. These regulations played a vital role in sustaining the phaseout of CFCs and other ODS in the manufacturing and servicing sector. 4. Assessment of the Performance 4.1. Key issues that facilitated implementation 59 a) Independent Structure of DIW-PMU: The structure of DIW-PMU during 2003-2006 was designed and agreed during the 2002 grant amendment to facilitate the implementation of NCFCP. Given that DIW-PMU reported directly to the Director General of DIW, the approval process was shortened and the action could be immediately undertaken to solve the issue that might have during the implementation. b) Transparent implementation procedure: Implementation procedures of individual and group sub-projects in the OPG were transparent and developed according to the Bank guidelines. This created trust and strengthen cooperation between the government and the private sectors. c) Flexibility: The RTG was given the flexibility of adding or removing beneficiaries as long as the proposed activity contributed toward achievement of the NCFCP and NMBPP and was consistent with the ExCom funding guidelines to ensure compliance with the accelerated phase-out schedule. Without flexibility, the RTG would be in difficult situation to effectively utilize funding to address the actual need to phase-out ODS consumption. d) Voucher scheme: A voucher scheme was proven as an effective and transparent tool to facilitate procurement of equipment for thousands of beneficiaries scattered across the country. The voucher scheme allowed equal opportunity for accredited suppliers to sell equipment to the beneficiaries based on commercial practice. Following the launch of the voucher scheme, the price of equipment was reduced by 30%, which supported project sustainability because enterprises were able to acquire equipment at more affordable prices. e) Strong cooperation among concerned parties: There had been strong cooperation among DOA-PMU, GSB and the beneficiaries during sub-project preparation and implementation. Moreover, the Bank played a vital role in advising DOA-PMU and GSB to overcome the issues facing during the implementation of the project. f) Training provided to beneficiaries: Training on code of good practice for fumigation and fumigation equipment, which were provided to the enterprise had strengthened capacity of the enterprise’s in-house fumigation team to fumigate more effectively and safely. The effective fumigation could kill insects at all stages and could prevent reinfestation of insect pests in the commodities. As a result, the enterprise could give priority to use phosphine fumigation rather than methyl bromide fumigation. The adoption of IPM had encouraged the enterprise to improve its stock management by using “first-in-first-out” approach. This approach would help to minimize the number of raw material inventory that would be kept in the warehouse until re-fumigation must be undertaken. As a result, unnecessary re-fumigation could be eliminated from this practice. It is important to note that the NMBPP provided training to not only the enterprises implementing the investment sub-project, but also those did not participate in the sub-project. 4.2. Key issues that hindered implementation a) Enterprise’s reluctance to disclose information: Some sub-projects took considerable time to prepare and submit appraisal reports to the World Bank because they were reluctant to disclose financial information for appraisal. IFCT had to explain to the enterprises implications of delaying submission of appraisal reports and the potential for cancellation by the ExCom. b) Financial crisis: For sub-projects with large counterpart funding, the East Asia Economic Crisis between 1997 and 1999 caused considerable difficulties for enterprises to acquire other funding sources to advance the payments for the equipment purchased before claims for reimbursement were made to IFCT. The beneficiaries had to obtain term loans 60 through local banks or scale down their counterpart funding which resulted in further delays. c) Design and development of voucher scheme and implementation modality: As voucher scheme was an innovative approach for the Pre-NCFCP sub-project. Significant time has to be spent to design and finalize the implementation of MAC Recycling Demonstration Sub- project through voucher scheme. For Commercial Refrigeration Terminal Umbrella Sub- project, significant time had to be spent to develop the implementation modality and the action plan to deliver technical and financial assistance to 231 enterprises located across the country. d) Identification/confirmation of participation: DIW and IFCT had to identify beneficiaries under the Recycling Demonstration Sub-project. Similarly, significant time was spent to confirm eligibility of beneficiaries under the Commercial Refrigeration Terminal Umbrella Sub-project. Given that most of these manufacturers of commercial refrigerator were small enterprises, who did not have systematic filing, it was difficult to obtain supporting document to confirm their consumption and eligibility and delayed the project implementation. e) Procurement of foam injection machine: Commercial Refrigeration Terminal Umbrella Sub-project had two parts; refrigeration and foam insulation. While assistance for refrigeration part was undertaken through voucher scheme for all beneficiaries, the assistance for foam insulation depended on enterprise’s baseline consumption. Of which, approximately 24 enterprises that had large baseline consumption would receive high pressure foam injection machine. To acquire the foam injection machine, the Bank advised Kulthorn Engineering Co., Ltd. to use international competitive bidding as the procurement method. Due to the lack of experience with the Bank’s ICB, significant time was spent to finalize the bidding document. Moreover, three rounds of ICB were conducted because of the failure in the first two rounds of ICB. f) Changing implementation modality of the sub-project: There was significant change in the project implementation modality of Halon Management Programme, Halon Recovery, Recycling and Banking Sub-project. After sub-project approval in 2000, significant time was spent to decide and conduct the study whether Thailand would need the physical halon banking or electronic halon banking. After the final decision to implement the electronic halon banking, DIW prepared the revised sub-project proposal to the ExCom in 2005 to revise the implementation modality, which was completed in 2010. g) Delays from stakeholders: Depending on the sub-project, the implementation of investment activities suffered from the delays from beneficiary enterprises, DIW, IFCT and the Bank. h) Changing institutional structure of DIW-PMU in early 2007. The change of institutional structure of DIW-PMU in early 2007 affected the overall implementation of the NCFCP. The existing staffs of DIW-PMU during 2003-2006 no longer worked for DIW-PMU. There were difficulties for the new staffs of DIW-PMU to immediately continue the tasks previously handled by the previous DIW-PMU. i) Hesitation to participate in the NCFCP: This affected the implementation of MAC servicing sector at the beginning of the program. Given that all of servicing workshops were very small enterprises, who did not want to expose themselves to the government, a number of MAC servicing workshops felt reluctant to attend the training and participate in the financial subsidy program. A series of public awareness by DIW and direct approach by DSD were carried out to explain the program, which resulted in higher responsiveness from MAC servicing workshops. This issue was not encountered at the later phrases of MAC servicing sector when servicing workshops felt confident to participate in the project. j) Distribution of R&R machines: The difficulty in distributing R&R machines to MAC servicing workshops were attributed to two factors. The first factor was contaminated 61 refrigerant in the servicing sector during 2005-2008. During this period, several alternatives to CFC-12 (in addition to HFC-134a) and sub-standard blends were introduced in the domestic market. When charging different type of refrigerant or sub- standard blends into the MAC system, the MAC system would become contaminated. The contaminated refrigerant undermined the promotion of R&R machines because it voided cleaned refrigerant in the cylinder, which would become unusable. The second factor affecting the R&R subsidy program was high counterpart funding for acquisition of the equipment. k) Termination of one financial intermediary: In 2010, one financial intermediary informed DIW and the Bank that it would like to terminate the agreement as the financial intermediary of the project. DIW and the Bank had to work closely with the said financial intermediary and the GC to accelerate the implementation of on-going activities. 4.3. Assessment of the World Bank supervision The Bank conducted periodic supervision missions to follow-up implementation progress, problems encountered and actions to be taken to resolve the pending issues. Throughout the life of the project, the Bank task team members worked closely with DIW, TMB Bank and GSB to ensure proper timely and effective implementation of the project. In addition, discussions with other stakeholders and on-site visits to beneficiaries were also undertaken during supervision missions to understand practical issues during implementation of the project. Both DIW and DOA indicated there was shortcoming of the Bank support for one year during 2009-2010. There was a lack of communication from the Bank, which delayed the project implementation in both NCFCP and NMBPP. After assigning the new Task Team Leader, the Bank resumed to provide periodically supervision and satisfactory support to DIW and DOA in implementing the remaining activities of the Project. Given the long duration of the Project and the normal rotations of staff in both DIW and the Bank, there were also some gaps in coordination and resulted in miscommunication between DIW and Bank, which caused some delay in the project implementation. However, at the final period of project implementation, there was regular communications and periodically supervision between DIW and the Bank, which resulted in more effective implementation. The Bank played a vital role in providing support to DIW in solving the problem to implement the remaining activities of the project, which significantly resulted in smooth implementation. The Bank staffs were found very competent in the subject, able to work with DIW staffs, and were willing to assist DIW to timely implement the activities. 4.4. Key experiences and lessons learned 4.4.1. General a) Effectiveness of integrated approaches: Technical and financial assistances from the MLF alone could not contribute to the achievement. Commitments from the government and related stakeholders toward the phase-out obligations were critical for the country to ensure compliance with all obligations in a smooth and sustainable manner. Integration of regulation frameworks, capacity buildings and technical and financial assistances could be considered as the optimal approach. b) Effective communications between public and private sectors: There were problems at the beginning period in reaching out to the private sectors under both NCFCP and 62 NMBPP. Servicing workshops did not want to participate in the NCFCP as they did not want to expose themselves to the government. PMU-DOA also had difficulties in identifying beneficiaries as fumigation work is small part of their business and it was difficult to convince the management to realize the importance of effective and safe fumigations. The government needs to develop and implement effective communication strategy to convince the public sector to participate. c) Follow commercial practice: A voucher scheme was proven as an effective and transparent tool to facilitate procurement of equipment for thousands of beneficiaries scattered across the country. Under the voucher scheme, the beneficiaries had to select equipment supplier on their own. Decision on supplier selection depended on not only equipment specification and supplier performance, but also price of equipment which was linked to the level of counterpart funding. The voucher scheme allowed equal opportunity for accredited suppliers to compete and sell equipment to the beneficiaries based on commercial practice. d) Group Coordinator: The use of group coordinator to deal with large number of beneficiaries helped to facilitate the sub-project implementation while allowing the government to focus on overall picture and enforcement activity. For example, the main compressor supplier acted as GC in the terminal umbrella project for commercial refrigeration while polyol suppliers/system houses were utilized under the NCFCP to reach out to the small foam enterprises. 4.4.2. NCFCP-specific a) Weakness of sub-project approach: Initially, the approach was to take individual enterprises - however this resulted in slowing implementation as approved process was long drawn-out. In 2002, the approach towards NCFCP which focused on thematic phase-out – expedited the program. b) Complication in working with small and medium-size enterprises: Implementations in servicing sector were more complicated than the manufacturing sector. Beneficiaries were small servicing workshops, who normally did not want to expose themselves to the government and did not have systematic filing. To deal with small enterprises, eligibility criteria should be minimized (as long as they are not against relevant guidelines / rules) to encourage these servicing workshops to participate in the program. c) Longer implementation than expectation: The longer implementation than expectation could undermine the cooperation among concerned parties. For instance, the long coordination with the DLT since 2003 for the same program without sufficient follow-up on the action plan undermined the mandatory MAC inspection program. 4.4.3. NMBPP a) Changing and unexpected circumstances: Although PMU-DOA was fully established since 2006, the activity to provide technical and financial assistance to beneficiaries could not proceed because PMU-DOA had difficulties in allocating grant fund to beneficiaries according to the original implementation modality of NMBPP vs. update situation. This barrier necessitated PMU-DOA to re-determine eligibility and funding criteria and submit it for the approval of the ExCom, which was approved in April 2009. This implies that the sub-project could be commenced starting from April 2009 when the new eligibility and funding criteria are confirmed. The delay in project implementation was also caused by unexpected circumstances. There was need to prepare PMP resulted in project implementation delay because the appraisal report could not be approved. 63 Moreover, another unexpected circumstance was the change of the head in GSB unit, which temporarily ceased project implementation for about 4 months in early 2011. b) Appropriate implementation modalities for different nature of sub-project: Implementation modality should take into account different nature of enterprises under the NMBPP. Individual approach was best suited to the large owner of storage facilities with in-house fumigation needing tailor-made interventions from the NMBPP. Owners of storage facility that do not have in-house fumigation and commercial fumigation servicing companies could be addressed as the group sub-project. c) Need for clear responsibilities, instructions on procedures and processing time: Some sub-project implementation was delayed due to time spent to resend supporting document to meet the requirements. The contact person of enterprise had difficulties to clarify the management level on the need for resending the supporting document. Moreover, there were cases that the disbursement to enterprises could not be made within agreed timeframe. The delay in making payment to the beneficiaries put pressure to contact person in justifying their management level regarding the reason of not getting the payment as planned. Therefore, the need for clear responsibilities, instruction on procedures and processing time was essential to avoid difficulties at the government, financial agent and enterprise sides and could improve image of the project. All parties involved must be able to meet the timeline as agreed with the others. The close communication and unique understanding among all concerned parties was critical for the timely and smooth project implementation. 5. Conclusions The ODS phase-out Project implemented through the Bank was a useful program for Thailand to meet obligations under the Montreal Protocol. Moreover, it enabled all concerned parties and the public to realize the importance of phasing out ODS and the negative environmental impact from the use of ODSs. In term of the industry, the Project provided technical and financial assistance to ODS-consuming enterprises to convert to alternative technologies effectively. The Project had also strengthened the relationship between the government and private sectors. The NCFCP led to good cooperation in the foam sector where the polyol suppliers provided technical support to their foam customers. This facilitated the preparation and implementation of HCFC Phase-out Management Plan (HPMP), for which polyol suppliers/system houses fully supported the government in reaching out to their customers. After participating in the NMBPP, the enterprise’s perception on effective and safe fumigation was better. The outcomes of the participation were in line with the enterprise’s expectation and it could enhance their business capacity in complying with national and international standards/regulations for fumigations and safety. The enterprises periodically contacted the government to get information on update technology and to seek suggestions on any issues that they had. 6. Comments on Draft ICR DIW agreed on the draft ICR and offered no comments. DOA provided a few minor editorial comments on the NMBPP part which were incorporated. 64 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders There is no comment from other partners/stakeholders. 65 Annex 9. List of Supporting Documents 1. Memorandum and Recommendation of the Director dated January 10, 1994 2. OTF Grant Agreement TF-21926 dated August 8, 1994 3. OTF Grant Agreement TF-21926 dated August 8, 1994 as amended December 27, 2002 4. OTF Grant Agreement TF-21926 dated August 8, 1994 as amended December 26, 2003 5. Restated OTF Grant Agreement TF-21926 dated August 22, 2005 6. Memorandum of Agreement (MOA) between Ministry of Finance (MOF) and IFCT 7. Memorandum of Agreement (MOA) between DIW and IFCT 8. Aides-memoire and project status reports/implementation status report 9. Audit reports conducted by the independent auditors 10. Project document of NCFCP as approved by ExCom 11. Project document of NMBPP as approved by ExCom 12. NCFCP Agreement between Thailand and the Executive Committee 13. NMBPP Agreement between Thailand and the Executive Committee 14. Annual work programme (AWP) prepared by Thailand during 2003-2012 15. Verification report of ODS consumption prepared by Thailand during 2002-2009 16. NCFCP Mid-term Review Report prepared by the Bank 17. NMBPP Mid-tern Review Report prepared by the Bank and Beneficiary Satisfaction Survey Report 18. Procurement Ex-post Review Report 19. Integrated Safeguards Datasheet, November 2010 20. Recipient ICR, prepared by DIW and DOA, March 2014 21. United Nations Environment Programme (UNEP), Link: “The Montreal Protocol and the Green Economy”, 2012 66 67