18. The Executive Committee requested the Treasurer, in consultation with the Sub-Committee on Financial Matters, the Fund Secretariat and the implementing agencies, and in particular with the Resource Mobilization Group of the World Bank, to prepare a discussion paper on how promissory notes would operate within the context of the Multilateral Fund taking fully into consideration inter alia:
- how encashment (draw down) schedules of promissory notes would be implemented to avoid cash flow problems;
- how promissory notes worked in other international financial institutions and international organizations;
- the impact of promissory notes on the amount of interest earnings;
- the implications of the wide-scale use of promissory notes by Parties not operating under Article 5, paragraph 1;
- the implications on the approval of projects by the Executive Committee in advance of encashment of promissory notes, given the provisions of the Montreal Protocol, the decisions of the Parties and agreements with implementing agencies;
- whether the use of promissory notes was in accordance with the existing financial procedures of the Fund;
- whether the Executive Committee was required to seek a mandate from the Meeting of the Parties on the use of promissory notes; and,
- the fact that the Multilateral Fund was a relatively new mechanism.
The discussion paper should also address other pertinent issues as deemed necessary for consideration by the Executive Committee at its Eleventh Meeting.
19. The Executive Committee also authorized the Chairman of the Sub-Committee on Financial Matters to convene a meeting of the Sub-Committee to finalize the discussion paper, as appropriate.