Decision in paragraph 32 in UNEP/OzL.Pro/ExCom/16/20

32.     The Executive Committee:

1. Decided that the first option proposed by the Sub-Committee on Project Review, as outlined in paragraph 25 above*, should be implemented on a trial basis for projects submitted to the Seventeenth Meeting of the Executive Committee and that it should be reviewed at the Eighteenth Meeting;
2. Decided that ODS consumption should be calculated on the basis of either the year, or an average of the three years, immediately preceding project preparation;
3. Adopted the following sector and sub-sector cost-effectiveness threshold values to be applied to projects submitted to the Seventeenth Meeting;

4. Decided to review the above values at the Eighteenth Meeting;
5. Recognized that in some domestic refrigeration projects using hydrocarbon technologies there are significant costs related to the provision of safety equipment and agreed that in calculating the cost-effectiveness of such projects, the safety-related costs should be identified and deducted from the total project cost before the cost-effectiveness calculations are made. These costs would, however, be considered in determining the level of project costs and funding;
6. Noted that it was difficult to determine cost-effectiveness thresholds for the mobile air conditioner and compressor sub-sectors and therefore agreed that an amount of US $8,900,000 should be reserved for funding these projects in 1995;
7. Agreed to reserve:
   1. US $8,379,591 as a discretionary fund which could be applied to projects, sectors, or countries it might wish to target or give special consideration to in 1995;
   2. US $3,900,000 for funding recycling projects (including halon banking);
   3. US $6,630,000 exclusively for allocation to projects from low-ODS- consuming countries. This amount would be in addition to any funds received as a result of approval of projects from low-ODS-consuming countries that qualified under the cost-effectiveness thresholds listed above;
   4. US $5 million to cover 1995 implementing agency work programmes and support projects, US $3,157,851 of which had been approved at the current meeting under agenda item 6;
   5. US $13 million to account for bilateral activities that could be applied against 1995 contributions from non-Article 5 countries;
8. Recommended that the Seventh Meeting of the Parties, through the Open-ended Working Group of the Parties at its Eleventh Meeting, should give consideration to the following:

          (i)     That, as a consequence of active and welcome action within Article 5 countries, there had been a substantial increase in project development and presentation and, therefore, in funding requests;

          (ii)    In this regard, the level of contributions agreed for the 1994-1996 period, was not expected to enable approval in 1995 of a significant proportion of projects that had already been identified by implementing agencies and Article 5 countries; and

          (iii)    The current difference between available funds and anticipated project requests could mean that the phase-out efforts of Article 5 countries would be slower than otherwise possible and could also be expected to create a number of other difficulties in smooth implementation of Article 5 ODS phase-out programmes.

• 25.    The representative of the United Kingdom, speaking as Chairman of the Sub-Committee on Project Review, subsequently reported on the outcome of the reconvened joint meeting of the two Sub-Committees. He said that the meeting had discussed two options for the operation of the framework whereby projects could be prioritized. Under the framework, a cost-effectiveness threshold for each sector or sub-sector would be agreed and the implementing agencies would be instructed to present projects whose cost-effectiveness fell below that threshold. Under the first option, preferred by a majority of participants in the meeting, the Executive Committee would approve the eligible projects, but if the projects submitted exceeded the resources available it would approve projects up to the amounts available. Any remaining eligible projects would be for priority funding at the next meeting. Under the second option, all projects submitted for approval would have to conform to a table elaborated by the Sub-Committee on Project Review. The Executive Committee would approve projects up to the amounts available and the remaining projects would have to be resubmitted at a subsequent session of the Executive Committee. Under both options, the Executive Committee would have a discretionary fund which could be applied to projects or sectors it might wish to target. In addition, special consideration would be given to the small- and medium-size ODS-consuming enterprises and to countries that had not yet benefited from resources from the Multilateral Fund. The targets fixed might have to be revised after their initial period of use, but they could then be reviewed annually. He explained that the precise figures would be calculated on the basis of data on historical values and projects in the pipeline.