Tunisia - Phaseout of Ozone Depleting Substances Project

MIdNTREAL PROTOCOL /2'/90 Report No: 12490 TUN THE REPUBLIC OF TUNISIA OZONE PROJECTS TRUST FUND GRANT PHASEOUT OF OZONE DEPLETING SUBSTANCES (ODS PHASEOUT 1) PROJECT DOCUMENT APRIL 1993 THE WORLD BANK GLOBAL ENVIRONMENT COORDINATION DIVISION ENVIRONMENT DEPARTMENT   THE REPUBLIC OF TUNISIA OZONE PROJECTS TRUST FUND GRANT PHASEOUT OF OZONE DEPLETING SUBSTANCES (ODS PHASEOUT I) PROJECT DOCUMENT APRIL 1993  I I  CURRENCY EQUIVALENTS (23 June, 1993) Currency Unit = Tunisian Dinar (TD) US$ 1.00 = 1.008TD UNITS AND MEASURE metric ton = Ton (T) = 1000 kg FISCAL YEAR (July 1 - June 30) ACRONYMS ANPE Agence Nationale de Protection de l'Environnement CFC Chlorofluorocarbons CP Country Program for the Phaseout of Ozone Depleting Substances EC European Community ECMF Executive Committee of the Multilateral Fund GAN Grands Ateliers du Nord GOT Government of Tunisia HCFC Hydrochlorofluorocarbon HFC Hydrofluorocarbon INS Institut National de Statistique LPG Liquified Petroleum Gas MCIIE Ministere de la Cooperation Intemationale et de l'Investissement de l'Exterieur MEAT Ministere de l'Environnement et de l'Amenagement du Territoire MeC1 Methylene Chloride MFMP Multilateral Fund of the Montreal Protocol NOC National Ozone Committee (fr. CNO) ODS Ozone Depleting Substance (fr. SDO)  ODP Ozone Depleting Potential (fr. PDO) OORG Ozone Operations Resource Group OPIU Ozone Project Implementation Unit (fr. UPO) OTF Ozone Projects Trust Fund (of the Montreal Protocol) PDG President Directeur General UNEP United Nations Environment Programme  TABLE OF CONTENTS I. ODS COUNTRY/SECTOR BACKGROUND .....................................1 ODS Consumption .....................................1 Government Policy and Actions Country Program .....................................1 Phaseout Schedule .....................................2 Government Commitment .....................................2 Institutional Aspects .....................................2 II. RATIONALE FOR BANK INVOLVEMENT .3 Bank Strategy .3 Government Strategy .3 Rationale For Montreal Protocol Financing .3 III. THE PROJECT .4 Project Objectives .4 Project Description .4 (A) Technology Development .4 (B) Institutional Strengthening .5 Project Costs and Financing .5 Project Implementation .7 Project Sustainability .7 Procurement .7 Disbursement .8 Accounts and Audits .9 Supervision .9 Environmental Aspects .9 IV. EXPECTED BENEFITS AND RISKS .9 Project Benefits .9 Project Risks and Mitigation .10 V. ASSURANCES, CONDITIONS, AGREEMENTS AND RECOMMENDATION .10  ANNEXES Detailed Project Component Descriptions and Budget Tables ............................................. 17 Recommended Governmental Regulatory Measures, ODS Monitoring Systems and ODS Licensing and Accreditation Program .............................................................. 39 Draft Agreement between Beneficiary Industries and ANPE ................................................. 42 TABLES List of Montreal Protocol Controlled Substances and Tunisia Profile ................................... 47 Estimated ODS Consumption in Tunisia by Use and Application, 1991 ............................... 48 Recommended Schedule of Bans on ODS use in Tunisia ...................................................... 49 FIGURES Consumption of ODS in Tunisia by Use and Application, 1991 ............................................ 51 Organigram of Administrative Structure .............................................................. 52 Recommended Flow of Funds .............................................................. 53  THE REPUBLIC OF TUNISIA DEMONSTRATION PROJECT FOR THE PHASEOUT OF OZONE DEPLETING SUBSTANCES Project and Grant Summary Recipient Republic of Tunisia Executing Agency Agence Nationale de Protection de l'Environnement (ANPE) Beneficiaries ANPE and Private Sector Enterprises Total Project Cost US$2.32 million Re-lending Tenns Not Applicable Project Cost Summary Component US$ Thousand HFC- 134a Refrigerator Prototypes 364 Rigid Foam Conversion Demonstration 402 Technician Training (Refrigeration) 440 Flexible Foam Conversion Demonstration 171 Aerosol Study & Conversion 264 Institutional Strengthening 480 Contingencies (price and physical) 200 TOTAL 2,321 Project Financing Ozone Projects Trust Fund US$1,790,000 Counterpart Financing GOT US$ 190,000 Private Sector US$ 341,000 Total US$ 531,000 Economic Rate of Return N/A Map N/A   THE REPUBLIC OF TUNISIA DEMONSTRATION PROJECT FOR THE PHASEOUT OF OZONE DEPLETING SUBSTANCES I. ODS Country/Sector Background And Status ODS Consumption 1.01 As a Party to the Vienna Convention and Montreal Protocol (MP)', Tunisia is committed to the phaseout of ozone depleting substances (ODS) by the year 2006. Ninety-seven percent of ODS consumption in Tunisia is in the form of Chlorofluorocarbon-1 1 (CFC-1 1) and CFC 12 which are used in the refrigeration, foam and aerosol industries (a list of substances controlled by the Montreal Protocol and their Tunisian consumption profile and the Tunisian ODS consumption are depicted graphically in Tables 1 and 2 respectively). There is no local production of CFCs in Tunisia; all CFCs are imported from Greece, Italy, Germany, France and the United Kingdom. Annual consumption of CFCs increased from 585 tons in 1986 to 730 tons in 1990 and was last estimated throughout the sectors in 1991 at 1,045 tons (out of a total ODS2 consumption of 1,073 tons/yr). Of this, 55 percent (585 tons) was consumed as a foam blowing agent; 22 percent (230 tons) as a refrigerant; and 22 percent (230 tons) as a propellant for aerosol sprays. Servicing of domestic refrigerators alone accounted for 54 percent of CFC consumption in the refrigeration sector in 1991. A detailed breakdown of national ODS data for 1991 is found in Table 2. National Consumption Patterns of ODS by Use and Application. Government Policy and Actions 1.02 Country Program. Tunisia has prepared a Country Program for the Phaseout of Ozone Depleting Substances (CP - draft available upon request) with the assistance of the World Bank and in compliance with requirements for obtaining Multilateral Fund of the Montreal Protocol (MFMP) financing. The recommended phaseout schedule of the CP is provided in Table 3. The CP is in its final phase of revision and would be submitted for approval to the next meeting of the Executive Committee of the Multilateral Fund (ECMF) in early 1994. The CP recommends policy actions and proposes several projects which would ensure full compliance with the Protocol requirements and lead to the phaseout of CFCs by the year 2000 (with the exception of servicing refrigerators). / The Vienna Convention (1985) is a treaty which provides a framework for international cooperation to save the stratospheric ozone layer which shields the earth from ultraviolet radiation. The Montreal Protocol (September 1987) established the framework for implementation of the Vienna Convention. Parties to the Montreal Protocol have agreed to elimninate the production and consumption of CFC and Halon ozone depleting substances, effective in 1989. The June 1990 London Amendments to the Montreal Protocol established the Interim Multilateral Fund (now the Multilateral Fund) which provides financial assistance to qualified developing countries, as incentive for early adoption of ozone protection technologies, to cover the incremental costs of meeting the objectives of the Montreal Protocol. / ODS, which are regulated, under the Montreal Protocol, include all CFC-based substances as well as carbon tetrachloride, methylene bromide, halons, etc.  2 1.03 Phaseout Schedule. The CP's main findings3 are that Tunisia could phaseout CFCs at an accelerated pace which would also decrease the overall phaseout costs to the national economy due primarily to the cost savings of replacing CFC refrigerators and other refrigeration/cooling equipment prior to their necessary retirement. The CP, therefore, recommends an accelerated phaseout strategy to take place between 1994 and 2000 in which Tunisia would gradually shift to ODS substitutes (or transitional substances) as they become available rather than waiting until 2005 to begin phaseout activities. The CP estimates total incremental costs (at a national level) for this strategy to be approximately US$29 million. 1.04 The financing of incremental costs to developing countries is intended as an incentive for early adoption of ODS phaseout activities and programs. An accelerated phaseout scenario would be accompanied by: a) a series of policy and legislative actions to enable the government to monitor, follow up and enforce the CFC phaseout (a recommended list of regulatory measures and schedule of bans on ODS use is provided in Annex 2); b) demonstration projects to assist the industries in phasing out CFCs in an orderly and effective manner; and c) subsequent investment projects in the ODS-using industrial sectors. Governrent Commitment 1.05 Tunisia ratified the Vienna Convention and the Montreal Protocol on 25 September 1989, and ratified the 1990 London Amendments in April 1993. In order to fulfill their commitment, Tunisia is seeking funds from the MFMP which provides assistance to developing countries with an annual per capita ODS consumption of less than 0.30 kg. As Tunisia's per capita consumption is only 0.10 kg/capita, and it has prepared the CP (a requirement of the MFMP), Tunisia is eligible to receive assistance from the MFMP to enable an accelerated phaseout schedule. Institutional Aspects 1.06 As a first step towards the implementation of its CP, the Government of Tunisia has entrusted to the Agence Nationale de Protection de l'Environnement (ANPE) the responsibility of coordinating and monitoring CP activities. The ANPE - established in 1988 by the Prime Minister - is primarily responsible for: advising the Government on environmental protection issues and policy, preparing environmental action plans, monitoring pollutant emissions, approving environmental impact analyses of industrial projects, promoting research, education and information dissemination and finally, coordinating national and international environmental programs to ensure that Tunisia fulfills its international obligations. ANPE is organized into six departments and comprises about forty professional staff. These are: the General Directorate; Administration and Finance; the State of Environment and Public Awareness; Pollution control; Large Scale Projects; Legal and Dispute. The head of the department of pollution control has been nominated as the Director of this project. ANPE formerly reported directly to the Prime Minister; it now reports to the Ministry of the Environment which was established in October 1991. 1.07 After signing the MP, ANPE established a National Ozone Committee (NOC) which is responsible for: (a) proposing regulatory measures necessary for the effective national phaseout of ODS; (b) providing guidance towards the implementation of the Country Program's Action Plan; and (c) serving as a link to the legislative body in Tunisia. The NOC is composed of fifteen members representing ministries, industries, academic institutions and non-governmental organizations. 3/ The Country Program was prepared in 1992. It is based, on an allowable phaseout schedule for developing countries to the year 2010. The CP is presently being circulated by ANPE within the concerned ministry and industries for their comments.  3 II. Rationale For Bank Involvement Bank Strategy 2.01 The Bank's role as an implementing agency for the Multilateral Fund of the Montreal Protocol4 is to cooperate and assist in administering and managing a program to finance incremental costs of ODS phaseout activities, enabling Article 5 countries to comply with the Protocol's control measures. Furthermore, the Bank is beginning to play a larger role in the protection of the global environment by integrating global environmental concerns into its environmental strategy. Government Strategy 2.02 The bulk of ODS phaseout activities in Tunisia is expected to span over six years. At the Government's request, the Bank provided assistance in the preparation of the CP (para. 1.02) and in securing MFMP financing for the implementation of the ODS phaseout. The Government has already established a National Ozone Committee, identified personnel within ANPE to be responsible for following up on MP activities and started public awareness campaigns. In the private sector, several of the large aerosol industries have already begun phasing out CFCs by converting to liquified petroleum gas (LPG) or compressed CO2. The first phase of the CP (this project) would be to initiate the process of establishing the institutional and legal framework for phasing out CFCs and, to demonstrate to the private and public sectors, using a series of activities, the introduction of non-ODS substitutes in the refrigeration, foam and aerosol industries. During the course of the project and after establishing the institutional and legal framework, the Government of Tunisia would submit to the MFMP the second phase of the CP consisting of investment projects to assist the private sector to modify production processes using ODS-free technology in the refrigeration and foam sectors. Assurances were obtained during Negotiations that the Recipient shall finalize and submit the Country Program to the ECMF not later than December 31, 1994. This requirement is also documented in the legal agreement. 2.03 With respect to the Government's overall environmental strategy for the country, the Government has also requested the Bank's assistance in updating the Environmental Action Plan (EAP) which the GOT developed in 1990. As part of the update, the recommendations of the CP would be incorporated into the revised EAP. Rationale for Montreal Protocol Financing 2.04 The grant will provide a financial incentive to the participating industries to phaseout their use of ODSs, many of which had adopted a "wait and see" posture until the government applies the appropriate regulations. The introduction of appropriate alternative technologies will allow for the accelerated phaseout scenario enabled by MFMP financing. Finally, the proposed project meets the applicable project eligibility criteria for MFMP financing as demonstrated by the allocation of funding (US$1.79 million) for the six project components in the June and October 1992 MFMP meetings. 4/ Other implementing agencies include UNDP, UNEP and UNIDO.  4 III. The Project Project Objectives 3.01 The project's objectives are to: a) establish the institutional and regulatory framework for decreasing ODS uses; and b) introduce ODS-free technologies to the refrigeration, foam and aerosol industries as a first demonstration phase in completing an early ODS phaseout program. Project Description 3.02 In order to fulfill the stated objectives, the project consists of two main elements involving institutional strengthening and technology transfer (detailed project descriptions can be found in Annex 1): A. The technology development element consists of five components in three of the major ODS-using sectors, focussing on demonstration projects, technical assistance and training: (a) The refrigeration sector consists of three components: (i) the introduction of HFC-134a as a refrigerant replacing CFC-12 (US$395.,000). This would involve the provision of engineering support to the largest refrigeration manufacturer in Tunisia - Tabrid - which produces 300,000 refrigerators per year, of which 200,000 are exported. With the assistance of a technical expert and support from compressor manufacturers, the component would consist of designing several refrigerator models using the new refrigerant (HFC- 134a) and optimizing the physical parameters of each design through a testing program so that lines of production could be modified in a forthcoming project. The final phase would involve a combined seminar (component i & ii) to share appropriate findings with representatives of the refrigeration sector; (ii) the replacement of CFC- 11 as a foam-blowing agent by a low CFC and/or non-CFC substance (US$435,000). This would involve the testing of a low-CFC (50 percent by volume - CO/H20) or a non-CFC (100 percent HCFC-142b/22, HCFC-141b or cyclopentane) foam blowing technique for the rigid foams used as refrigerator insulation, and a study of the effects of the foam on physical and energy parameters. This would be done in Tabrid and the second largest refrigerator manufacturer, Grands Ateliers du Nord (GAN); and (iii) the introduction of a CFC-recycling and refrigeration maintenance program to train refrigeration technicians how to recycle CFCs and handle non-ODS refrigerants (US$478,000; OTF). The training course would be the first step in introducing a technicians accreditation system which would eventually be attached to the licensing of industries handling and importing ODSs. This would be recommended under the governmental actions. (b) The flexible foam component (US$187,000) would demonstrate the replacement of CFC-11 with a non-ODS substitute. This would be either H2O/CO2 mixed with polyols for higher density foams or methylene chloride (MeCl) for blowing low density foam used in the manufacturing of cushions and mattresses (about 70 percent of the Tunisian flexible foam market). Because MeCl can be toxic to humans in a closed environment, the component  5 would provide for the acquisition of equipment needed for safe manufacturing and handling of foam blown with MeCI, and worker awareness training seminars. (c) The aerosol component (US$278,000) would consist of a sectoral study in order to determine the full technical and financial needs for technology development. The study would consist of a sector assessment, a technology assessment as well as incremental cost calculations for shifting to ODS free propellants; additional training would be carried out in the use and handling of LPG for the remaining manufacturers, based on the results of the study. 13. The Institutional Strengthening element (US$480,000) consists of establishing the Ozone Project Implementation Unit (OPIU) which would be responsible for execution of the project within the planned budget and schedule and in conformance with Bank guidelines. The OPIU will be headed by the Project Director (a staff member of the ANPE) and managed by a Project Manager (to be financed under the grant). An institutional specialist will be obtained on a part time basis in order to provide assistance with the preparation of operational procedures and guidelines, detailed terms of reference, design and establishment of a monitoring system which would be used to follow up on phaseout activities, and procurement of consultants and goods. The component would provide consulting services, equipment and support staff to the OPIU for project management and project identification. The OPIU would be responsible for the preparation of new projects (which may also include demonstration components in new technologies not covered by this project), and specifically, a feasibility study to identify immediate needs for an investment project which would allow full conversion to CFC-free refrigerators. These new projects would be reviewed by the NOC and the Ozone Operations Resource Group (OORG - the Bank's technical ozone reviewing and advising committee consisting of technical specialists in all the ODS technologies), and submitted to the ECMF for the financing of incremental costs. Project Costs and Financing 3.03 The estimated total project costs are US$2.32 million of which US$1.79 million would be financed boy the Ozone Projects Trust Fund (OTF) grant; the balance of US$531,000 would be financed by the participating industries and the Government of Tunisia (GOT). This was confirmed during appraisal. In accordance with the guidelines issued by the ECMF which require that grants be provided to projects for which the costs are not recovered within a two year period, the Government agreed that funds be awarded by ANPE to the participating enterprises on a grant basis net of all taxes and duties. Assurances have been obtained during Negotiations that all items to be financed by the project would be exempt from taxes and dLuties. 3.04 Sub-grant agreements between ANPE and the recipient enterprises would be signed to formalize tlhe making of grant proceeds available. The Government has submitted: (a) a draft model sub-grant agreement between the participating refrigerator enterprise and ANPE prior to negotiations: and will submit (b) the relevant signed sub-grant agreements prior to disbursement of grant funds to the counterpart responsible for the implementation of the relevant project component. The details of Grant allocation follow:  6 PROJECT COMPONENT GRANT GOTI TOTAL ELEMENT ALLOCATION Private Sector l (US$) (US$) (US$) Institutional OPIU and TA for Governmental Actions 290,000 190,000 480,000 Strengthening _ Technology Refrigeration: lDevelopment Development HFC- 134a Replacement in 245,000 119,000 364,000 Domestic Refrigerators Rigid Foam Blowing in Domestic 272,000 130,000 402,000 Refrigeration Maintenance & Recycling 416,000 24,000 440,000 Training Flexible Foam Blowing 103,000 68,000 171,000 Aerosol Study, Demonstration & Training 264,000 264,000 Subtotal Technology Development 1,300,000 341,000 1,641,000 Contingencies (price and physical) 200,000 200,000 TOTAL 531,000 2,321,000 3.05 Disbursements for the grant are expected to be made along the following categories: GRANT AMOUNT (Expressed in Percent of Expenditures to be CATEGORY US$equivalent) Financed (1) Equipment, Materials and 723,400 100 percent of foreign supplies expenditures, 100 percent of local expenditures (ex- factory cost) (2) Consultants' services, Training 866,600 100 percent and operational services (3) Unallocated 200,000 Total 1,790,000  7 Project Implementation 3.06 The proposed project would be implemented over a period of three years. It is expected that it would start in February 1994, be completed by June 30, 1997, and closed by December 31, 1997. ANPE would be the executing agency for this project, by virtue of delegation by the Ministere de la Cooperation Internationale et de l'Investissement de l'Exterieur (MCIIE). A diagram illustrating the Bank, recipient and beneficiary relationship and proposed management structure is provided in Figure 2. 3.07 Implementation of this project would be carried out by the OPIU (para. 3.02(A)) to be established within ANPE and financed by the Project. The Project Director would provide guidance and monitor the five Project components through Component Coordinators with the assistance of a Project Manager. The Project Manager would be responsible for overall coordination of Project activities, procurement of goods and services for all project components and monitoring of accounts. During appraisal a Project Manager was proposed by the ANPE and the Component Coordinators were identified by each lead enterprise. Prior to negotiations. ANPE appointed a Project Director who will have overall responsibility for the Project. The Project Manager, appointed under terms of reference satisfactory to the Bank, was formally appointed as a condition of grant effectiveness. 3.08 The Project Director would have overall responsibility for the implementation of the Project. As the initial project is a demonstration project, it is expected that following the successful demonstration of C)DS phaseout technology, investment projects would be prepared. The OPIU would be responsible for identifying and preparing future investment projects which could commence during project implementation. Support for this activity would be obtained from the technical specialists during their periodic visits to TIunisia to oversee the technical components. The NOC (para. 1.07) would be responsible for reviewing project proposals and providing guidance on national priorities and recommended governmental actions. Support for the development of OPIU and NOC procedural guidelines for carrying out delegated responsibilities (as outlined in para. 1.07) would be obtained through the institutional specialist (para. 3.02 (A)). Project Sustainability 3.09 By successfully demonstrating ODS-free technology in key industries, the project would open the door to further private sector investment in non-ODS technology, particularly with the availability of funding from MFMP to assist with incremental capital and operating costs associated with phasing out ODS in forthcoming projects. P'rocurement 3.10 Procurement of goods and services would be made in accordance with the Guidelines for Procurement under IBRD Loans and IDA Credits (May 1992). The hiring of consultant services will be in accordance with the Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency (August 1981). Schedule B summarizes procurement arrangements under the Grant Agreement. Procurement of goods and personnel which will not be financed by the grant (local contribution) will be carried out according to standard government or enterprise practice.  8 3.11 Goods and services. To the extent possible, contracts for goods would be grouped to allow for the procurement of larger packages. The bulk of the equipment procurement is expected to be for: (a) up-grading of existing refrigeration systems (including testing laboratories); (b) modification of foaming machines and replacement of injection pumps; (c) acquisition of a small number of computers, copying machines, simple tools and materials; and (d) training by suppliers. Contracts larger than US$50,000 would be procured on the basis of International Shopping (IS) with at least three price quotations from at least three countries. Local Shopping would be applied for contracts up to an aggregate amount equivalent to US$350,000 and would be based on at least three price quotations from local suppliers, to ensure competitive prices. All initial contracts and subsequent contracts valued above US$50,000 would be subject to prior review by the Bank. 3.12 Consultants' services for technical assistance, studies and training. The document- (terms of reference and contracts) for training, studies or consulting services valued at more than US$1(0,dOO wo.l!d be subject to prior review by the Bank. Consulting contracts, valued below US$100,000 equivalent would be subject only to random post-review by the Bank and would be retained by the ANPE for review by World Bank supervision missions. Terms of reference drafted by ANPE and approved by the Bank, would be submitted in an annex to the contract with the selected consultants. Disbursement 3.13 Role of the Executing Agency. Under the proposed project, and in accordance wit'h a Project Agreement, ANPE would maintain all accounts and disbursement records, as part of its role as the executing agency. Under a Grant Agreement between the Bank and MCIIE, ANPE, to be specified as the executing agency, would make all disbursements related to the implementation of the five project components, keep project accounts, prepare periodic project reports, arrange for the audit, and prepare new ODS phase-out projects. 3.14 Because of the large number of small contracts which would be required, and to reduce the interval between payment made by the beneficiaries and receipt of reimbursements from the Bank, a Special Account would be established within the Central Bank of Tunisia from which ANPE would have the authority to withdraw funds. It was confirmed. during negotiations. that a special account would be established for the Project under terms and conditions satisfactory to the Bank. After effectiveness and upon the Recipient's request, the Bank would make an initial deposit up to an amount equivalent to four months of estimated expenditures (US$175,000) and would replenish the Account monthly, or whenever one half of the amount has been withdrawn. Withdrawals from the Special Account would be supported by the usual documentation required under Bank-financed projects. Project expenditures would be monitored by ANPE. Figure 3 provides an overall diagram of the recommended flow of funds which was discussed during appraisal. Payments would be made by the Central Bank following the submission of request for payment by ANPE. Experience to date with the Central Bank of Tunisia and Bank projects has been very good with few or no incidences of delayed payments. 3.15 Except for contracts requiring prior Bank review, disbursement would be made against a certified statement of expenditure for which detailed documentation evidencing expenditures would be made available for the required audit, and also for review by the Bank supervision missions. The financing requests would be processed by the OPIU. 3.16 The allocation of grant funds and the disbursement percentages are summarized in Schedule B. The text of the first draft Sub-grant agreement between ANPE and one of the participating enterprises can be found in Annex 3. The disbursement categories to be used are (i) equipment, materials and supplies, and (ii) consulting services, training and operational services. Under equipment would be items such as tools,  9 evacuation pumps, compressors, foaming machines, recycling machines, etc. Materials would include refrigerants, polyols, lubricants, isocyanate etc. Supplies would include office furniture, computers and printers, photocopier etc. The second category would include all training, fees for technical assistance, office and car rental, seminars, incentive bonus workshops, telephone and fax expenses, etc. Accounts and Audits 317 An independent Auditor, acceptable to the Bank, would: (a) audit ANPE Project component accounts; (b) apply auditing standards and procedures satisfactory to the Bank that conform to generally accepted auditing practices; (c) carry-out auditing work in a timely manner (an annual report would be presented no later than six months after the end of each calendar year); and (d) render an audit opinion not later than six months after each fiscal year. The Auditor would provide preliminary assistance in financial management and application of modem auditing procedures to ANPE staff, including assistance in setting-up the format of the Project accounts, as part of its strengthening of the ANPE. Assurances to this effect was obtained during Negotiations. Supervision 318 Supervision by a Bank team will take place semi-annually following the submission of the progress report. The supervision missions would be composed of the task manager, at least one financial specialist, to be supported by one ODS or other specialists as needed, and will require about 15 staffweeks (sws) in the first year, 10 sws thereafter. During the first supervision mission a project launch seminar would take place at the request of the Government in order to train the project participants in Bank and Mvlontreal Protocol project preparation and implementation procedures. Environmental Aspects 3.19 While the overall impacts of the project are environmentally positive from a global perspective, it would be necessary to address potential local issues. Therefore, the project has been classified, according to Operational Directive 4.01, as "B", requiring limited environmental analysis. All new substances introduced to the Tunisian industries would have to follow the safety guidelines recommended by the manufacturers a and conform to international safety standards. The main issues to be addressed are related to worker health, safety and awareness in the aerosol and foam industries which may be using flammable and potentially toxic gases,cyclopentane, LPG and MeCl. Regarding the use of MeCl as a blowing agent for the flexible foam component, health and safety measures would have to comply with international standards. Safety measures related to the present use of LPG as a propellant would be investigated during the aerosol study and strengthened as necessary with any new proposals for the use of LPG. Use of cyclopentane as a foam blowing agent would require the support of a technology partner experience in the safe use of cyclopentane, or a similar agent, for rigid foam applications. IV. Expected Benefits And Risks Project Benefits 4.01 The project's main benefit would be to introduce ODS replacement technology into the three main ODS consuming sectors in Tunisia, while also providing institutional strengthening to continue with Protocol activities in order to completely phaseout the use of ODSs. The project would demonstrate the technical feasibility of ODS-free technology in the three largest ODS using sectors in Tunisia. Successful demonstration and subsequent application (through investment financing of these technologies within the  10 participating industries would lead to a reduction in CFC consumption by approximately 33 percent. Replication of this technology throughout these sectors by the financing of subsequent investment projects (which can be done with the assistance of the MFMP) would lead to a decrease in ODS consumption by approximately 97 percent. 4.02 By invoking an early ODS phaseout schedule, Tunisia is eligible to seek and receive assistance from the MFMP, thus reducing the burden on the government, industries, and ultimately consumers of financing incremental costs. Project Risks and Mitigation 4.03 There are three main project risks to consider: (a) a possible delaY in implementing start up activities due to ANPE's lack of familiarity with Bank procedures, with a resultant delay in adopting the recommended accelerated phaseout schedule. This would be mitigated by: (i) securing an institutional specialist to assist with the preparation of detailed TORs, procurement documents, work plans, and procedural guidelines for the OPIU and NOC; and (ii) presenting a project launch seminar during the first supervision mission following grant signing in order to familiarize project participants with Bank and Montreal Protocol guidelines and procedures for project preparation and implementation; (b) the reluctance of manufacturers to cooperate with ANPE in the sharing of ozone friendly technology throughout the relevant sectors. This would be mitigated by the signing of the sub-grant agreements which would require the transfer of technology - obtained through OTF financing - between enterprises, signatures would be required for grant effectiveness; and (c) the difficulty in enforcing an accreditation system in practice given that there is no present system for monitoring refrigeration technician activities and qualifications. This would be partly mitigated by the provision of training courses to all qualified candidates prior to enforcing the system, and by putting in place regulation of ODS distributors and a monitoring program of ODS-using industries. V. Assurances. Conditions. Agreements And Recommendation 5.01 As conditions of negotiation: (a) The Government will submit a draft sub-grant agreement between the refrigerator manufacturer and ANPE. (para. 3.04). (b) The Project Director will have been nominated (para. 3.07) 5.02 Assurances obtained from the Republic of Tunisia at negotiations: (a) The Government shall finalize and submit the CP to the ECMF not later than December 31, 1994. (para. 2.02) (b) The recommendations in the CP will be incorporated into the EAP. (para. 2.03) (c) All items financed by the project are exempt from taxes and duties. (para. 3.03) (d) Procurement of goods and services would be made in accordance with the Guidelines for Procurement under IBRD Loans and IDA Credits (May 1992).(para. 3.11)  11 (e) The hiring of consultant services will be in accordance with the Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency (August 198 1).(para. 3.11) (f) A special account will be established within the Central Bank of Tunisia for the Project under terms and conditions satisfactory to the Bank.(para. 3.15) (g) An independent auditor will be retained to assist ANPE in financial management and application of modem auditing procedures to the project. The special account will be audited annually and an audit report submitted to the trustee within six months after each fiscal year.(para. 3.18) (h) The OPIU will be maintained throughout the period of project implementation (Sched. 2.2 of Project Agreement) 5.03 Agreements to be Reached. The following conditions were agreed with the Government during appraisal: (a) For effectiveness: the Project Manager will have been appointed. (b) For disbursement of each component: Sub-grant agreements between ANPE and the participating enterprise or institutions would be signed (para. 3.03) prior to disbursement for the relevant Project component.  12 Schedule A Republic of Tunisia Demonstration Project for the Phaseout of Ozone Depleting Substances Project Costs and Financing Plan Project Component Foreign Local Total - ----------------- US$ thousand ----------- Institutional Strengthening 35 445 480 HFC-134a Replacement in Domestic Refrigerators 151 213 364 Rigid Foam Blowing in Domestic Refrigerators 244 158 402 Maintenance and Recycling Training 189 251 440 Flexible Foam Blowing 80 91 171 Aerosol Study, Demonstration and Training 264 0 264 Contingencies 88 112 200 (price and physical) TOTAL 1,051 1,270 2,321  13 Schedule B Page I of 3 Republic of Tunisia Demonstration Project for the Phaseout of Ozone Depleting Substances Procurement Methods and Disbursement Schedules The Pr6sident Directeur Gen6ral (PDG) of ANPE, through the Project Director heading the Ozone Project Implementation Unit (OPIU), would be responsible for procurement. Actual procurement would be carried out by the Project Manager who would report to the Project Director. It has been agreed that an arrangement would be made with the Government which would provide the services of a procurement specialist from within the MEAT or another Ministry familiar with Bank procurement procedures. It is not expected that contracts would exceed US$200,000. Goods (a) Contracts with an aggregate amount up to US$50,000 would be procured through local shopping (LS) on the basis of at least three quotations. (b) Contracts above US$50,000 would be procured through international shopping (IS) on the basis of comparison of price quotations solicited from at least three qualified suppliers from at least two countries; and (c) All contracts whose value exceeds US$50,000 would be subject to prior review by the Bank in order to verify compliance with Bank Procurement Guidelines. Technical Assistance and Consultants (a) all consultants would be procured according to the Bank's Guidelines on the Use of Consultants (August 1981); (b) all initial contracts of US$5,000 or more under each component and all contracts over US$100,000 would be subject to prior review by the Bank; and (c) contracts of less than US$100,000 would require only Bank review of TORs.  14 Schedule B Page 2 of 3 Procurement Methods Category Other N.B.F. Total ------------------ (US$ thousand) ----------------- Goods 1,079' 1,079 (774)2 (774) TA 8163 816 (816) (816) Operating Costs 2724 272 (192) (192) Local Salaries 1545 154 TOTAL 2,321 2,321 (1,790) (1,790) '/It is expected that all procurement for equipment will be made through International or Local Shopping. The International Shopping proportion is estimated to be about US$627,000 for about 6 - 10 contracts.. 21 Numbers in parentheses represent portions financed by the grant. 3/Consultants will be procured using World Bank Guidelines. 4/ This will include O&M, equipment rental, training, seminars, meetings, utilities, telecommunications, official travel and is eligible for financing under Montreal Protocol guidelines. 5/ Includes actual salaries paid for project director , secretary, accountant and driver.  15 Schedule B Page 3 of 3 Procurement Methods and Disbursement Schedules Estimated Disbursements Component FY95 FY96 FY97 HFC-134a 318 80 0 Refrigerator (22 1)6 (55) (0) Prototypes Rigid Foam 405 35 0 Conversion (281) (25) (0) Demonstration Technician 345 104 33 Training (334) (102) (32) Flexible Foam 143 44 0 Conversion (89) (27) (0) Demonstration Aerosol Study & 218 71 0 Conversion (218) (71) (0) Institutional 326 138 61 Strengthening (208) (87) (40) Cumulative 1920 2227 2321 (1460) (1718) (1790) 6I Amounts in parentheses represent grant disbursements.  16 Schedule C Republic of Tunisia Demonstration Project for the Phaseout of Ozone Depleting Substances Timetable of Key Project Processing Events (a) Time Taken to Prepare 20 months (b) Prepared By: GOT (c) First Bank Mission: April 1992 (d) MFMP Approval: May & October 1992 (e) Appraisal: October 1993 (f) Negotiations: February - March 1994 (g) Bank Approval: June 1994 (h) Planned Signing: June 1994 (i) Planned Effectiveness: August 1994 (j) Planned Completion: June 1997  REPUBLIC OF TUNISIA DEMONSTRATION PROJECT FOR THE PHASEOUT OF OZONE DEPLETING SUBSTANCES PROJECT ANNEXES   17 Annex 1 TUNISIA PROJECT COMPONENTS Component 1 - Demonstration of prototypes for domestic refrigeration using HFC-134a 1. Component Description ]Background The domestic refrigerator industry in Tunisia produced over 300,000 units in 1991, two thirds of which were exported. This production required the use of imported refrigerants, compressors, and other key components. Production operations during the year 1991 consumed about 60 tons of CFC-12, corresponding to six percent of the total Tunisian ODS consumption. The refrigerant HFC-134a has been judged by the Ozone Operations Resource Group (OORG) to be commercially proven and is emerging as the non-ODS refrigerant of choice in the US, Japan, and Europe. Hydrocarbon (HC) refrigerants are also considered to be acceptable for properly designed small refrigerators. It is generally foreseen that most major producers in developed countries will have converted ito HFC-134a refrigerant by 1996. HC refrigerants will likely find application in small refrigerators in Europe. With the ready availability of refrigerants, lubricants and components for HFC-134a, using this technology becomes a realistic and viable option for production of standard sized refrigerators in Tunisia. The Copenhagen amendments under the Montreal Protocol, together with market forces in Tunisia's primary export market (Europe) will force Tunisian refrigerator producers to adopt ODS-free refrigeration circuit technology for their exported units by 1996. The Tunisian Goveniment's Country Program for ODS Phaseout includes the recommendation that the production of CFC containing refrigerators be phased out by January 1st, 1996. A period of up to two years would be required for redesign, prototype production and testing before full scale commercial production of HFC-134a based refrigerators could commence. Hence, a demonstration project (Phase I) designed to carry out these preliminary steps is presented here. Purpose of the component The purpose of the component is to introduce HFC-134a technology to replace CFC-12 refrigerant in domestic refrigerators and to provide support for the testing of new HFC-134a refrigerator models manufactured in Tunisia. The objective would be achieved through engineering assistance and testing of the HFC-134a refrigerator units made with local materials and produced in local manufacturing facilities.  18 Component Participants The component is proposed to be implemented by the Tabrid Group as this company develops its own refrigerator designs, is the dominant manufacturer in the local market, and is the major Tunisian exporter of refrigerators. Foreign-owned domestic refrigerator manufacturers (smaller production volume) in Tunisia produce under license from multinational companies and may develop similar programs in cooperation with their licensor. Component Elements The component comprises the following elements: engineering support in the form of international consultant(s) with expertise in refrigeration technology for HFC-134a (to be selected by Tabrid) for review of the detailed project program, monitoring of progress through four (4) technical visits and evaluation of results; technical assistance to develop and test three refrigerator models designed for HFC- 134a refrigerant at Tabrid. The component would be carried out in the following phases: - phase A: detailed planning: work plan, list of equipment, and detailed budget for equipment and testing facility would be prepared by Tabrid with technical support. The work plan would be consistent with the "Criteria for Development of Compressor and Appliance Projects" as prepared by the OORG Technical Advisors. - hase B: design. development and procurement: development of HFC-134a refrigeration circuit design for 2-3 refrigerator models with support from technical experts and compressor manufacturer(s). Setting up of testing facility and procurement of testing equi- ' and refrigeration circuit components. -phase C: prototype production and testing: testing of production of each model prototype in a small test series (5-10 units), energy consumption and reliability testing, and adaptation of new compressors for production. Identification of source of refrigerant and lubricating oil, and ancillary components. phase D: evaluation and seminar: evaluation of non-proprietary project components with results of testing to be presented in a seminar for 20-30 representatives of the refrigeration sector in order to disseminate information throughout the sector on CFC-replacement options for refrigerant and for rigid foam insulation (to be carried out jointly with the rigid foam component described in this Annex). The seminar is to be conducted within 60 days of completion of Phase C: prototype production and testing.  19 Source of Assistance The source of the knowledge base for HFC-134a refrigeration technology would be obtained from compressor manufacturers and engineering consultants, familiar with ODS replacement technology, in collaboration with Tabrid. Assistance from the supplier of the data acquisition system (testing and quality control) would also be required. In addition, the international consultant(s) would be required to review, monitor and provide advice to the component coordinator. The consultant would assist the coordinator in preparing a report on component progress to the Project Manager. 2. Component Execution Time Schedule This component is proposed to start during the 1st quarter of CY1994 in order for Tabrid to commence production of new ODS-free refrigerators by 1996. The planned duration of the component phases is: A: Detailed planning 0.2 year B: Design, procurement, production 0.3 year C: Carrying out test program 0.5 year D: Evaluation 0.2 year Total: 1.2 years !Component Organization and Management The component would be carried out within the organization of Tabrid. Tabrid has appointed a component coordinator, who would be responsible for reporting regularly (quarterly) on component progress to the Project Manager. The Component Coordinator would be responsible for assisting the Project Manager in the presentation of results from the testing of new non-ODS refrigerator models to other refrigerator manufacturers in Tunisia. The component would be initiated by the Project Director under the Agence Nationale pour la Protection de l'Environnement (ANPE), who would contract the international consultant(s) and commission Tabrid to prepare the detailed plan and budget (phase A). At the end of each year, Tabrid shall submit a report containing an evaluation of the results obtained, a review of difficulties encountered and how these were resolved, an account for expenses, and an adjusted plan and budget for the following year. The report would be reviewed by the independent consultant, who would advise the Project Manager on its acceptability according to Montreal Protocol Executive Committee funding guidelines. The consultant would also carry out a technical audit at Tabrid once a year. 3. Benefits of the Component This component would demonstrate the available technology for the replacement of CFC-12 with HFC- 134a under local Tunisian conditions. Once applied on a production level, the total phaseout of 60 tons/year CFC-12 refrigerant would be achieved. The stock of new refrigerators in Tunisia would then start to be replaced by HFC-134a units, thereby minimizing the need for forced scrapping of existing refrigerator units as the Montreal Protocol target for phaseout is approached.  20 Component 2 - Demonstration of conversion to non-CFC rigid foam technology in the domestic refrigeration sector 1. Component Description Background In 1991, the Tunisian domestic and commercial refrigeration industry used 175 tons of CFC- 11 as blowing agent for rigid foam insulation, the greatest consumption was in the domestic sector. This corresponds to 16 percent of total ODS consumption in Tunisia. Existing alternatives which are options to reduce or eliminate the consumption of regulated CFCs in rigid foam applications include: A. In the short term, replacing 50 percent of CFC-11 consumption with water/CO2 blowing. This technology is commercially proven and has been used by European manufacturers for 2-4 years. Their experience shows that the 3-8 percent loss in insulation thermal efficiency can be compensated for with formulation and procedural adjustments and minor redesigns of the refrigerator. B. Replacing 100 percent of CFC-11, as a second stage, with a mixture of HCFC-142b/22 which is also a commercially proven technology. This change would reduce insulation efficiency and may require increasing the thickness of the refrigerator wall to achieve proper refrigerator performance and thermal efficiency. C. Replacing 100 percent of CFC-1 1 directly with 100 percent HCFC-14 1b. This option may provide a slightly better thermal efficiency than other non-CFC options, but awaits resolution of outstanding technical issues pertaining to liner compatibility. D. Replacing 100 percent of CFC-1 1 with CO2 given off from the water/isocyanate reaction. This formulation produces an insulation which has inferior structural and thermal efficiency characteristics but may find application in cold food carts and buffet's. E. As a full zero-ODP option, use of cyclopentane blowing agent following adoption of or in lieu of other options. While this is the most promising of the zero-ODP technologies, it must take proper account of relevant safety measures. The support of a technology partner experienced in the safe use of cyclopentane blowing agents for rigid foam applications would be required for implementation. The application of these foam formulation technologies may require some modification or replacement of existing foam injection machines Tabrid has elected to go forward with direct conversion to a non-CFC blowing agent based on preliminary tests carried out with a foam supplier. Tabrid is planning to test both HCFC-142bW22 and HCFC-141b in order to determine which technology is best suited for the Tunisian environment. A zero ODP technology would be adopted if and when it is possible to safely introduce this technology, with the appropriate technology transfer support. Because complete phaseout of CFCs in domestic refrigerators is recommended by 1996, this component, which is aimed at replacing CFC- 11 as a foam blowing agent, must be given high priority.  21 Purpose of the Component The purpose of the component is to test methods of conversion to CFC-free refrigerator insulation technology. In conjunction with the refrigerant project component (conversion of refrigeration circuit to HFC-134a) this component would enable Tabrid to produce a totally CFC free refrigerator for marketing in the EEC. This is considered vital to the company's future. The objective of the component would be achieved through technical support and demonstration of the selected method of technology. .Component Participants 'The component would involve the main domestic refrigerator manufacturers, TABRID with its ten production lines and Grands Ateliers du Nord (GAN), with its three production lines. !Component Elements 'The component would be carried out in the following phases: phase A: seminar and consultations: a seminar on low and zero CFC technology options for the foam sector is to be presented in coordination with the refrigeration seminar in Component 1. The National Ozone Committee (NOC) initiatives for support of conversation projects are also to be discussed. The seminar is to be supplemented by consultations with representatives of least (3) leading foam technology suppliers. - hase B: conversion: modification/replacement of foaming machinery by the manufacturers in collaboration with the suppliers of foam formulations. Short term (reduced CFC) and long term (zero ODP) options would be considered in the selection of any new foaming machinery. The cornversion would be coordinated with the refrigerant component and would be phased to test pcrformance of the chosen technologies under Tunisian conditions prior to full implementation of the conversion. Source Assistance The main source of assistance would be the suppliers of insulation foam formulations with additional support from the producers of foaming equipment. Assistance would also be required from an outside international consultant(s) with relevant background, who shall assist the Project Manager in negotiations with the manufacturers, review of proposals and monitoring of modifications. 2. Component Execution Tlime Schedule The component should be initiated immediately. The planned duration of the component phases is: - A: seminar and consultations 0.3 year - B: conversion 1.2 year Total 1.5 years  22 Component Organization and Management The component would be initiated and monitored by the Project Director in collaboration with the Association of Domestic Appliance Manufacturers. The conversion shall be organized by the participating manufacturers, who have appointed a component coordinator responsible for reporting to the Project Manager under ANPE. Each manufacturer is to develop - in collaboration with his supplier of foam systems - a conversion program with a budget to be submitted to the Project Manager. After review by the consultant, component implementation would proceed. 3. Benefits of the Component As a result of the component, the consumption of regulated CFC for rigid foam insulation of appliances would be reduced over a 1-2 year period from the present level of 175 tons/year, and could be completely eliminated by 1995/96.  23 Component 3 - Maintenance of Domestic. Commercial and Industrial Refrigerators 1. Project Description Background In 1991, there were about 800,000 domestic refrigerators in use in Tunisia containing a total of about 200 tons of CFC-12 refrigerant. Servicing accounted for an estimated consumption of 140 tons of CFC-12, corresponding to 12 percent of the country's total ODS use. There is also an important and growing number of large commercial and industrial refrigeration systems in Tunisia using CFC refrigerants for food display, processing and cold storage, central air conditioning and other applications. It is estimated that 40 tons of CFC were used in 1991 for installation and servicing of these units (about 4 percent of the country's total ODS use). Service companies' experience indicates that the average domestic refrigerator is serviced every 7- 10 years (either to replace a failed compressor or to fix a major leak in the refrigeration circuit) and that on the average 1 kg CFC is used on each servicing (150-250 g to replace the original refrigerant charge and the balance for flushing, purging, and leak testing). The technique of using CFC-12 to flush refrigerator circuits following service repair indicates that 100 tonnes of CFC-12 per year is needlessly exhausted into the atmosphere during repair work. This consumption can be eliminated if the following improved procedures are adopted: (a) Usage of nitrogen instead of CFC for flushing of the circuits. As the cost for nitrogen is well below the cost for CFC, this procedural change can be economically viable, and can be carried out at most repair locations. The use of nitrogen for purging is a well established technique in Europe and elsewhere. (b) Recycling of refrigerants by using recovery and recycling machines. This procedure is primarily recommended for large system servicing and for repairs carried out under workshop conditions. Servicing of domestic refrigerators is carried out at manufacturer's service workshops (located at the production plants and at licensed workshops in major cities), independent workshops and in owners' homes. The work is carried out by refrigeration technicians or by personnel engaged in general servicing of household appliances. It is estimated that domestic refrigerator repairs involving recharging of refrigerant represents about 800 man-years annually. As some of the personnel do other jobs as well, it is estimated that about 2000 persons are engaged in this activity. Large commercial and industrial units are installed and serviced with the participation of refrigeration technicians. Training of these technicians in improved servicing practices for handling CFC refrigerants, and in non-CFC refrigeration technologies including retrofitting, would reduce the consumption of CFC gases and facilitate the introduction of ozone friendly refrigeration technology in the commercial and industrial sectors. The consumption of CFC can be reduced through a training program in which improved servicing practices and refrigerant recycling techniques are taught. A realistic goal for the program would be to reach 30 percent of the estimated workforce over a 3 year period. As the improved techniques are profitable in themselves, their use can be expected to spread further through word of mouth.  24 Purpose of the Component The purpose of the component is to improve the servicing and repair procedures for domestic refrigeration, to increase awareness of the ozone issue among service personnel, and to reduce the use of CFC-12 through recycling. The objective would be achieved through a study, a training program, technical assistance, and the financing of recycling equipment. Component Elements The component comprises the following elements: - an initial study describing the present domestic refrigerator service sector and providing a detailed plan for the actual training; a training program. Three (3) Tunisian refrigeration instructors would receive intensive training in recycling, recovery, improved service procedures etc. at an established training center abroad (e.g. Center de Thermique de l'INSA de Lyon). Instruction would be in French. Consideration would be given to adding a fourth instructor if budgetary constraints permit. The instructors would provide a series of courses to train about 300 practicing refrigeration technicians per year in the above skills. It is anticipated that a certificate would be issued to each technician upon completion of the course as part of a national accreditation system. The training program would comprise: (i) an overview of the contribution made by CFC refrigerants to ozone depletion and global warming and the environmental and economic reasons why it is necessary to eliminate their use as soon as possible; (ii) techniques of refrigerant recovery and the use of recycling machines. The circumstances in which it is acceptable to use recycling machines (as opposed to a central reclamation plant, not currently planned for Tunisia) to clean refrigerant would be clarified; (iii) methods of carrying out standard service procedures with a minimum of refrigerant loss; and (iv) techniques for retrofitting CFC based equipment with CFC alternatives. This would be demonstrated on refrigeration systems used for training by the refrigeration training establishments participating in the program. technical assistance from an institution which has already developed a program on proper servicing practices. This would be the establishment providing teacher training described above The component coordinator would prepare the preliminary study, propose a training plan, organize instruction abroad, suggest teaching materials, and monitor the component at regular intervals; and  25 demonstration of recycling equipment. It is estimated that ten to fifteen (10 - 15) refrigerant recycling machines and/or pumps would be purchased by the project (depending upon the program design based on a study in Phase A below). Five (5) of these machines would be distributed on a rotational basis to a range of refrigeration repair businesses identified in the initial study described above. Their use would be monitored (in terms of money saved as a result of re-using CFC refrigerant) by the component coordinator for 1-2 years. At the end of this period the results would be evaluated for cost effectiveness. A series of seminars organized by the coordinator would be planned to transfer the knowledge gained to non-participating businesses. The component would be carried out in the following phases: phase A: study and detailed planning: a detailed description of the service sector for domestic, commercial and industrial refrigerators, a registration of service workshops, tabulation of the number and education of employees, and types of repairs based on a series of interviews (number and age of units serviced, use of CFC, reason for recharging, where repairs take place, etc.). Further, the study would review existing authorization schemes for servicing companies and personnel (if any), and recommend a suitable arrangement for such a scheme. On the basis of the study, a detailed plan for the actual training would be prepared. During phase A, employment procedures for the instructors or selected technicians would be initiated. Detailed planning would consider the recycle/recovery experiences of similar programs in developed as well as in developing countries. Having obtained a profile of the refrigeration service industry, the study would also comment on the a priori viability of a central reclamation scheme for Tunisia. phase B: training of instructors/technicians: it is planned to train three to four instructors as described above under training. Some would be refrigeration instructors currently teaching in Tunisian refrigeration schools, others would be recruited from the local pool of experienced and practicing refrigeration technicians. phase C: training program: training would be offered as a 2 week workshop course with classroom instruction, including recycling techniques and retrofit techniques as described above under training. Assuming that each instructor can conduct 16 on-the-job courses per year with 6-7 students, it is tentatively estimated that 600 service workers would pass the ODS training courses over the duration of the program. This number could be increased depending on contributions from the Tunisian Government through its educational institutions. phase D: evaluation and follow-up: at the end of the two year training program, a final evaluation report would be written by the coordinator, at which time it would be considered whether and how the program may be extended to cover refrigeration technicians who have not yet participated in the course. Component Participants The refrigeration service businesses participating in the recycling equipment demonstration program described above would be identified during the initial study.  26 The Tabrid Group has an extensive after sales repair and service network. It is expected that they would be an active participant in the training program, and possibly be one of the participants in the demonstration program above. Source of Assistance Technical assistance in providing training manuals and other teaching materials is required from the manufacturers of the recycling machines. It is therefore essential that these resource needs are detailed in the contracts between the supplier and Tabrid. The recycling machines must be imported. There are several companies in Europe, USA and Asia which supply recycling machines of various types and quality. It is essential that the machines meet accepted international standards both in terms of manufacture and performance (the relevant standards are considered to be SAE 1990 and 1991). Duties of Coordinator The duties of the coordinator consist of: - carrying out an initial service sector study (with assistance of experts); detailed planning of technician training program including arrangements for overseas instructor training. Assessment of further training requirements at end of component; - ongoing evaluation of the training program and regular reporting to project manager; - supervision of recycling machine demonstration program and organization of promotional seminars at end of component. 2. Component Execution Time Schedule The component is proposed to start early 1994. The planned duration of the project phases is: - A: study and detailed planning 0.3 year - B: training of instructors 0.5 year - C: training program/demo. program 2.0 years - D: evaluation and follow-up 0.2 year Total 3.0 years Component Organization and Management The training program would be coordinated by the component coordinator who would report regularly to the Project Manager. The component would be initiated by the Project Director, who would employ the coordinator as well as the team of instructors. The Project Manager would procure equipment and training materials with support from the component coordinator. Evaluation of the training program would be done periodically to enable adjustment of the component if necessary.  27 3. Benefits of the Component The current servicing practices indicate that up to 100 tons/year of CFC- 12 can be saved (given the present stock of refrigerators) by shifting from CFC-12 to nitrogen for flushing and by recovery and recycling CFC released during purging and leak testing. In practice, the expected benefit of the project is estimated to be around 25 tons in the first year of CFC not wasted through CFC flushing. As the practice is spread through out the sector the impact would naturally increase.  28 Conmponent 4 - Technical Seminar. Consultations and Demonstration in the Flexible Foam Sector 1. Component Description Background The manufacturers of mattresses, furniture cushioning and similar flexible foam products and rigid insulation foam in Tunisia used approximately 400 tons/year of CFC-1 1 as foam blowing agent in 1991. This corresponds to 37 percent of total ODS consumption in Tunisia. The purpose of the CFC in the manufacturing process is to facilitate the production of the lighter (and less durable foam) qualities used for low cost products. Standard foam formulations are presently available using new polyols suitable for using CO2 from the waterfisocyanate reaction as the sole foaming agent. This allows CFC-free production of flexible foam of any specification in the range 18-50 kg/m3 (medium and high density foam). The production can be carried out with the existing slab stock production machines operated in Tunisia. The C02/water blowing technique, however, cannot be used for the production of the low density (<18 kg/m3) foam which comprises about 70 percent of the flexible foam market. Methylene chloride, which is now being used successfully throughout Europe and the US, has been proposed as the foaming agent for this product. The main expense associated with this conversion would be the acquisition of safety equipment. The technique of safe foaming with methylene chloride would be demonstrated first at one selected foam manufacturer (Sotumous). Purpose of the Component The purpose of the component is to facilitate the conversion to CFC free technology in one selected manufacturer, Sotumous, which would serve as a demonstration site for other flexible foam manufacturers. Methylene chloride may also be used for high density foam production for manufacturers which do not utilize high pressure pumps. The project would be to achieve the objective through technical assistance and production demonstrations. Component Elements technical assistance to the participating manufacturer of flexible foam in the form of a study and consultation abroad. Individual consultations to other manufacturers would be provided by the component coordinator on options for CFC replacement technology. investment in safety equipment required for the conversion of one plant to 100 percent methylene chloride to serve as a demonstration of set up, worker awareness and safety training. demonstration to test the quality and production of flexible foam (low and high density) using the methylene chloride foaming agent.  29 The component would be carried out in the following phases: - phase A: Detailed Preparation - Fact finding field trip in order to decide on equipment to be used; preparation of detailed equipment list; planning for installations of equipment to ensure minimum disruption of production. - phase B: Acquisition and installation of equipment, and preparation of worker safety and awareness seminars for all Sotomous workers and management personnel. Safety equipment consists of a complete enclosure for the production line and a large number of extraction fans over the foaming area and foam storage area. Project Participants The component participant, Sotumous is one of the major manufacturers of flexible foam products in Tunisia and would be the first to demonstrate the technique of using methylene chloride and the associated safety equipment. The component coordinator would provide information regarding conversion to the other major manufacturers of flexible foam products in Tunisia. Source of Assistance The main source of assistance would be the suppliers of flexible foam formulations and suppliers of safety equipment. Assistance would also be provided by a fact-finding mission and participation in a training course in alternative flexible foam technology. The coordinator would assist the Project Manager with technical seminars, negotiations with other manufacturers, review of future proposals and monitoring of flexible foam conversion projects. 2. Project Execution Time Schedule The component is proposed to start in the 1st quarter of 1994. The duration of the project phases is expected to be: - A: Detailed Preparation 0.3 year - B: Acquisition and Installation of Equipment 0.5 year - C: Test Production and production demonstration 0.5 year - D: Evaluation 0.2 year Total 1.5 year Project Organization and Management Testing of foam production would be organized by the manufacturer, who has appointed a component coordinator responsible for selecting equipment, carrying out tests, giving seminars on worker safety and reporting to the Project Manager.  30 It is expected that other manufacturers may then develop - in collaboration with a supplier of foam systems - a test production project component with a budget to be submitted to the Project Manager under a second project to be funded by the MF. After review by an external expert, the 2nd component could be approved and submitted to the MPEC for approval of financing. 3. Benefits of the Component As a result of the component, the consumption of ODS in Tunisia would be reduced in Sotumous by 32 tons/year of CFC- 11 which is the present amount released to the atmosphere from flexible foam blowing processes. The component would demonstrate the use of MeCI in the flexible foam sector which, as a whole, utilizes 400 tons/year of CFC- 11.  31 Component 5 - Study. Technical Seminars and Demonstration of Conversion in the Aerosol Sector 1. Component Description Background The aerosol industry in Tunisia used 230 tons of CFC in 1991 for the production of aerosol spray products. This corresponds to 21 percent of total ODS consumption in Tunisia. The CFC serves as propellant for the active ingredient in the product. A variety of alternatives is available to replace CFCs in specific products: LPG, DME, compressed gases, HFCs, and other replacement propellants; pump sprays, bag cans; solid sticks, roll-ons, brushes, and other non-aerosol technologies. Adoption of a particular option, in most cases, involves added expenses such as safety precautions, modification or replacement of can filling equipment, and/or plant relocation. Several industrialized countries banned CFC for aerosols more than a decade ago, and now there is a vast amount of experience on selecting suitable non-CFC technology for specific applications. Somre of the options, such as replacing CFC with LPG or CO2 where this is acceptable, are actually cheaper than the CFC solution. In Tunisia, the total estimated production of aerosol sprays in 1992 was 1,812,500 cans (equivalent to 270 tons CFC-12/yr'). Eighty percent of this production was distributed as follows under the major manufacturers: Enterprise Cans/yr Tons CFC-12/yr' Judy 500,000 75 Codepar 300,000 45 Proxim/Chimap 250,000 38 Lipp l'Oreal 200,000 30 Floreal 200.000 30 TOTAL 1,450,000 218 Based on infornation obtained during pre-appraisal, all but Judy have experience with conversion to a non-ODS propellent. This represents about 950,000 cans per year (143 tons/yr) or about 52 percent of- ths production of spray cans. This corresponds proportionally to the amount of CFC consumed in the manufacture of propellent for filling the cans. Therefore, in the aerosol sector, Judy is the source of approximately 28 percent of CFC consumption while smaller artisanal manufacturers account for about 20 percent (54 tons/year). This suggests that about 48 percent of 1992 usage remains to be phased out. 'Based on the average content of 150g CFC-12/can.  32 Purpose of the Component The purpose of the component is to review the CFC usage status of the aerosol sector and to assist the remaining aerosol product manufacturers in selection and demonstration of the most appropriate ODS- free technology. The component objective would be achieved primarily through technical assistance and demonstration. Component Elements The component comprises the following elements: - technical support for a study on CFC-free options already in use in Tunisia and examination of the options which may be feasible for supporting the conversion of remaining users of CFC propellants. The results of the study would be shared through a seminar on CFC-free options for aerosol manufacturers and consultations on appropriate technology for individual manufacturers; - technical support to demonstrate conversion using technology selected on the basis of the study. The component would be carried out in the following phases: - phase A: study of the aerosol sector in Tunisia to examine the present situation regarding conversion to non-ODP propellants (which enterprises have converted, type of non-ODP technology selected, types of aerosol products used, degree of success of conversion, issues to be addressed) in order to select and propose the optimal aerosol conversion technology for the remaining large manufacturer, Judy, and the smaller individual manufacturers. The study would also examine the possible use of financial instruments to enable all remaining aerosol manufacturers to convert to non-ODS products earlier than agreed upon in the Montreal Protocol for developing countries2. The final phase of the study would be to design seminars to be given to representatives of the aerosol sector. phase B: seminars and assistance with the design of subprojects would be provided for all (small and large) aerosol fillers throughout Tunisia in which participants would design demonstration projects for CFC replacement or chose altemative compensation packages as recommended based on the results of the study. The preparation of these subprojects would serve as models for the Tunisians in project preparation and would be evaluated during the first supervision mission. phase C: demonstration of conversion to non-ODS propellants would involve the application of and training for safety measures to be applied with the use of LPGs or another selected replacement technology, and financial mechanisms necessary for phasing out small producers. This would be followed by an evaluation. 2 These small aerosol producers use small amounts of CFC-12 which would deplete stocks of this fluid at a time of increasing shortage. Eliminating its use by small aerosol producers would release more for use in refrigeration where there is no straightforward alternative, e.g. re-charging domestic refrigerators. The results of the study would be presented by the Component Coordinator in the form of seminars and consultations to the these remaining small CFC-using aerosol producers.  33 Project Participants T'he project participants would include Judy, a representative for the smaller aerosol manufacturers, and the current manufacturers of non-CFC aerosol products in Tunisia. Source of Assistance Akssistance would be required from an international consultant(s) with relevant background in the aerosol sector and experience in developing countries. The expert would advise the Coordinator on preparation needed for the study, a technical introduction seminar, individual consultations, and preparation of proposals for future project components which can be submitted for funding (in compliance with MPEC criteria) in the second phase of the Action Plan. The study would be carried out by the expert consultant and component coordinator. 2. Project Execution Time Schedule The component shall be started immediately, i.e. 1st quarter of CY1994. The planned duration of the project phases is: - A: study of aerosol sector 0.2 years - B: seminars & subcomponent designs 0.3 years - C: demonstrations & evaluation 1.0 years Total 1.5 years Project Organization and Management The study and technical seminars would be organized by the Component Coordinator with the assistance of an aerosol expert in consultation with the Project Manager, the ODS Committee and the Association of Aerosol Manufacturers and other relevant industry organizations. Any future project component proposals which have been cleared by the Project Director and Ozone Committee would be prepared in full by the Component Coordinator in collaboration with the relevant manufacturers. 3. Benefits of the Component The component would enable remaining CFC propellent users to select the appropriate technology for conversion and to propose the optimal plan for the smaller artisanal manufacturers. The component would therefore lay the groundwork for complete elimination of the present consumption (the exact amount to be determined during the study).  34 INSTITUTIONAL STRENGTHENING COMPONENT The institutional strengthening component consists of the establishment of an Ozone Projects Implementation Unit (OPIU) within the Agence National de la Protection de l'Environnement (ANPE) which is under the Ministry of Environment in Tunisia. The OPIU is to be responsible for overall Project implementation and the preparation of the second phase of ODS phaseout projects. The Prcject would finance incentive bonuses for professional and support staff already in place, technical assistance, office equipment and maintenance expenses required for the implementation of Project management: activities. Primary staff would consist of a qualified project manager (PM) familiar with ODS issues in Tunisia, a bilingual secretary, a technical assistant and an accountant. Technical needs would be addressed by institutional and technical specialists from abroad who would advise and assist with project implementation. The institutional specialist would assist with the preparation and updating of procedural guidelines for the OPIU and the National Ozone Committee (NOC) which would advise OPIU management on national priorities and review proposed ODS phaseout legislation and incentives. The technical specialists would provide advice to firms engaged in the implementation of project components. ANPE Responsibilities General * Prepare, implement, evaluate ozone projects * Prepare procedural guidelines for OPIU and NOC * Establish and maintain ODS monitoring system * Organize a system for the dissemination of information regarding "ozone friendly" technology * Follow up on MP activities and update Country Program as needed Project Director * Overall responsibility for Project * Report to PDG of ANPE (or Minister of Environment) * Supervise Project Manager and follows up on all Project progress * Present new proposals to the NOC and the MP Executive Comnmittee * Responsible for the continuity of the ozone phaseout program * Convene National Ozone Committee * Responsible for Project budget Project Manager * Responsible for implementing project within schedule and budget * Report to Project Director on progress and budget * Manage daily project activity and coordinate with industries responsible for project components * Prepare briefs for Project Director to report to NOC on Project progress Supervise ODS monitoring system Identify and prepares second phase of investment projects Responsible for preparation of procurement documents Responsible for monitoring disbursement against appropriate categories  35 NOC Responsibilities The National Ozone Committee was created by the GOT following its signing of the Montreal Protocol and is composed of 15 members representing concerned ministries, industries, academic institutions and NGOs. Their main responsibilities are to: (a) propose required legislation and regulatory measures needed to reach ODS phaseout objectives; (b) provide guidance on the implementation of the Country Program for the Phaseout of ODS which would include proposing and/or reviewing new project concepts; and (c) serve as a liaison between the ministries, legislature, concerned industries and the executing agency regarding all ODS phaseout activity, including resolving project issues as they arise. Source of Assistance For each component, technical specialists would visit Tunisia to carry out studies, present seminars or provide assistance with project implementation. At the start of the project, an institution specialist (obtained locally or through inter-/intra-ministerial cooperation) would assist the TM by: (a) drafting guidelines and procedures for the NOC and OPIU to be reviewed by the Project Director; (b) clarifying World Bank procedures regarding procurement, disbursement and audit requirements; and (c) providing assistance as requested in the development of regulatory measures to be proposed to reach ODS phaseout objectives, and in the development of an ODS monitoring system. Throughout the project, technical specialists would visit Tunisia in association with the Project's technical components. These specialists would also work with the Project Director in resolving technical Project issues and proposing and drafting new projects for the second phase of ODS phaseout activities. The last visit of the technical specialists would include a project completion seminar to which all the industries in the ODS-using sector would be invited in order to share project results. If requested by the Government, a "project launch seminar" would be carried out in order to familiarize the OPIU with all Bank procedures for procurement, disbursement and project preparation as well as Montreal Protocol guidelines and criteria for project funding and approval. A disbursement seminar was provided to key staff at the Central Bank of Tunisia in September 1993, and these staff have assured their availability for the training of government officials and staff as necessary.  TUNISIA: Demonstration Project for the Phaseout of Ozone Depleting Substances Cost Table m:\fs\tun\totcost2.xls DEMONTRER UN PROTOTYPE DE REFRIGERATION DOMESTIQUE UTILISANT IIFC-134a Calendar Year Base Cost Forelgn MP Flnancing Code Resource 1994 1995 1996 1997 TOTAL % Total [Total 11.111 INFORMATIQUE 12.0 12.0 92 11 100 12.0 11.121 POMPE EVACUANTE 3.0 3.0 100 3 100 3.0 11.122 POSTE DE RECHARGE 30.0 30.0 100 30 100 30.0 11.123 COMPRESSEURS, TUYAUTERIE 15.0 15.0 100 15 100 15.0 11.124 AMENAGEMENT CH. D'ESSAI 75.0 75.0 47 35 47 35.0 11.125 OUTILLAGE 6.0 6.0 100 6 100 6.0 11.126 EQUIPMENT & MATERIEL 69.0 69.0 0 0 30 20.7 11.127 REFRIGERANT 1.0 1.0 100 1 100 1.0 11.100 EQUIPEMENT. MATERIEL ET FOURNITURES 205.0 6.0 0.0 0.0 211.0 48 101 58 122.7 11.210 4 VISITES DE 2 SEMAINES 13.0 26.0 11.0 50.0 100 50 100 50.0 11.220 UN ING. COORD. (Encouragement) 2.3 6.5 6.5 0.0 15.3 0 0 100 15.3 11.230 UN TECHNICIEN (PLEIN TEMPS) 4.7 14.0 14.0 9.3 420 0 0 100 42.0 _ 11.200 COOPERATION TECHNIQUE 20.0 46.5 31.5 9.3 107.3 47 50 100 107.3 11.311 SEMINAIRE 15.0 15.0 0 0 100 15.0 11.312 ENTRETIEN/EQUIPEMENT 5.0 0 10.0 0 0 0 0.0 11.300 OPERATIONS 0.0 5.0 20.0 25.0 0 0 60 15.0 11.400 SALAIRES LOCAUX 0.0 0.0 0.0 0.0 SUBTOTAL 11 52.5 36.5 29.3 343.3 44 151 71 245.0 DEMONTRER LA CONVERSION A LA TECHNOLOGIE DE LA MOUSSE ISOLANTE SANS CFC . lase Cost Foreign MP Flnancing Code Resource 1994 1995 1996 1997 TOTAL % Total % Total 12.110 MODIFICATION DES MACHINES 97 98 195 100 195 100 195 12.120 POLYOL, ISOCYANATES 10 10 100 10 100 10 12.130 MACHINE D'INJECTION 120 120 0 0 0 0 12.100 EQUIPEMENT, MATERIEL ET FOURNITURES 227 98 0 0 325 63 205 63 205 12.210 3 VISITES/TOTAL: 4 SEMAINES 24 9 33 100 33 100 33 12.220 Demonstration des converslons 28 28 0 0 100 28 12.200 COOPERATION TECHNIQUE 24 37 0 61 54 33 100 61 12.310 ENTRETIEN DES MACHINES 5 5 10 0 0 0 0 12.320 PURGE/MACHINE D'INJECTION 3 3 6 100 6 100 6 12.300 OPERATIONS 8 8 0 16 38 , 6 38 6 12.400 SALAWRES LOCAUX 0 0 0 0 0 0 0 0 SUBTOTAL 12 130 45 0 402 61 244 68 272  FORMER LES TECHNICIENS A L'ENTRETIEN DU SYSTEME DU FROID Base Cost Foreign MP Financing Code Resource 1994 1995 1996 1997 TOTAL % Total % Total 21.111 ACCESSOIRES 10 10 100 10 100 10 21.112 MACHINES DE RECYCLAGE 75 75 100 75 100 75 21.113 PIECES DE RECHANGE 10 10 100 10 100 10 21.114 MATIERE D'OEUVRE 8 8 100 _ 8 100 a 21.100 EQUIPEMENT, MATERIEL ET FOURNITURES 103 0 0 103 100 103 100 103 21.210 ETUDE 40 40 25 10 100 40 21.220 FORMATION DES FORMATEURS 20 20 100 20 100 20 21.230 COORDONNATEUR (TEMPS. PART.) 12 12 12 36 0 0 100 36 21.240 FORMATEURS 9 18 9 36 0 0 100 36 21.250 TECHNICIENS EN REFRIGERATION 40 40 40 120 0 0 100 120 21.200 COOPERATION TECHNIQUE 121 70 61 252 12 30 100 252 21.310 VOYAGES 3 3 0 0 100 3 21.320 SUBSISTENCE/FORMATEURS 18 _ 18 133 24 100 18 21.330 ENTRETIEN DES MACHINES 4 8 8 20 50 10 100 20 21.340 OPERATIONS/CYCLES DE FORM. 5 10 5 20 50 10 100 20 21.350 FRAIS DE BUREAU a a a 24 50 12 0 0 21.300 OPERATIONS 38 26 21 85 66 56 72 61 I 21.400 SALAIRES LOCAUX 0 0 o 0 0 o o 0 SUBTOTAL 21 262 96 82 440 43 189 95 416 DEMONTRER L'INTRODUCTION DE LA TECHNOLOGIE DE LA MOUSSE SANS CFC Base Cost Foreign MP Financing Code Resource 1994 1995 1996 1997 TOTAL % Tolal % Total 31.110 POLYOLS 9 9 100 9 0 0 31.120 ISOCYANATE 6 6 100 6 0 0 31.130 AUTRES MATERIAUX 3 3 100 3 0 0 31.140 RECONVERSION: Instnument de Controle cinq pompes (Isocyanate, polyol,MeCI,..) tunnel tole Inox, vannerie el tuyauterle Inox extracleur, collecleur de gaz, cheminee d'exhausl zone de murlssent cilternes (chlorure de melhylene. glycerine) tetes de moussage flexibles en teflon 70 50 120 42 50 58 70 31.100 EQUIPEMENT, MATERIEL ET FOURNITURES 70 68 0 138 49 68 51 70 (D 31.210 COORDONNATEUR (Encouragement.) 2.3 6.4 4.3 13.0 0 0 100 13 31.220 VOYAGE D'ETUDE PAR (CADRE) 3 3 200 6 100 3 31.230 STAGE (TECHNICIEN) 6 6 100 6 100 6 31.240 Seminalre de Demonilration 11 11 0 0 100 11 31.200 COOPERATION TECHNIQUE 2.3 15.4 15.3 0.0 33.0 36 12 100 33 31.300 OPERATIONS o 0 0 0 0 0 0 0 0 o o 0 31.400 SALAIRES LOCAUX 0 0 0 0 0 0 0 0 _______I____I_______ SUBTOTAL 31 85 83 0 171 47 80 60 103  !Basc Cost Pi ' ' F _o*e PResource l1994 1995 i99G 1997 TOTAL J% IToaal N7 [Toial _ __ _ _ _ _ __ _ _ _ _ a0 227 T 1 1 0 __ ___ __ _ e_._ __ _ __ _ ___. 41.110 EOUIPEMENT DP DEMONSTRATiOt 50 1 122.7 172.7 100 100 72.7 41.100 EQUIPEMENT, MATERIEL ETFOURNITURES - 50 122.7 0.0 112.7 _10 173 100 172.7 41.210 ETUDE 1138 _ 18 100 18 100 18.0 41.220 COORDONNATEUR (Encouragement) 2.3 6.5 6.5 15.3 0 0 100 15.3 41.231 EXPERT (SEMINAIRE) 30 30 100 30 100 30.0 41.232 EXPERT (EVALUATION SEMINAIRE) 18 18 100 18 100 18.0 41.200 COOPERATION TECHNIQUE 2.3 72.5 6.5 0.0 81.3 81 68 100 81.3 41.311 SEMINAIRE 10 10 0 0 100 10.0 41.300 OPERATIONS 10 0_ 0 10 0 0 100 10.0 . . 41.400 SALAIRES LOCAUX 0 0 0 0 0.0 . SUBTOTAL41 133 129 0 2i4.0 90 239 100 264 ADMINISTRER L'EXECUTION DU PROJET Base Cost Foreign MP Financing Code Resource 1994 1995 1996 1997 TOTAL % Total % Total 51.110 EGUIPEMENTINFORMATIQUE 25 25 . 88 22 100 25 51.120 UNITE DE REPRODUCTION 12 - 12 92 11 100 12 51.130 DOCUMENTATION 5 5 100 5 100 5 51.140 MATERIEL DE BUREAU 6 6 33 2 100 6 Co 51.150 FAX 2 2 100 2 100 2 51.100 EQUIPEMENT, MATERIEL ET FOURNITURES 50 0 0 0 50 70 35 100 50 51.205 Dlrecleur de Prolet (Encouragemenl) 1.2 3.5 3.5 2.3 10.5 0 0 100 10.5 51.210 Chef du Projel (Encouragement) 1.6 4.3 4.3 2.0 13.0 0 0 100 13.0 51.220 Secretalre/Chet du Prolet 2.0 6.0 6.0 4.0 18,0 0 0 100 18.0 51.230 Veriticaleur des Comptes 2.0 2.0 2.0 2.0 8.0 0 0 100 8.0 51.240 Agent Comptable/Passatlon 2.6 8.0 8.0 5.4 24.0 0 0 100 24.0 51.250 Technician 2.6 8.0 8.0 5.4 24.0 0 0 100 24.0 51.260 AssIslance TechnIque en Gesllon 3.0 9.0 6.0 = 18.0 0 0 100 18.0 51.200 COOPERATIONTECHNIQUE 15.0 40.8 37.8 21.9 115.5 0 0.0 100 115.5. 51.310 FOURNITURES ET ENTRETIEN 1.0 4.0 4.0 4.0 13.0 0 0 100 13.0 51.320 FRAIS/REUNIONS (COMITE OZONE) 1.0 1.0 1.0 3.0 0 0 100 3.0 51.330 TELEPHONE ET FAX - 1.0 4.0 4.0 3.0 12.0 0 0 100 12.0 51.340 TRANSPORT 2.5 17.0 17.0 6.0 42.5 0 0 100 42.5 51.350 LOYER ET ELECTRICITE 2.0 16.0 16.0 13.0 47.0 0 0 100 47.0 51.360 TRADUCTION 1.0 2.0 2.0 2.0 7.0 0 0 100 7.0 51.300 OPERATIONS 7.5 44.0 44.0 29.0 124.5 0 0 100 124.5 51.410 DIRECTEUR DE PROJET, MI-TEMPS 15.0 20.0 20.0 15.0 70.0 0 0 0 0.0 51.411 SECRETAIRE DE DIRECTION. M.T. 4.0 8.0 8.0 4.0 24.0 0 0 0 0.0 (D 51.412 COMPTABLE (TEMPS. PART.) 3.0 6.0 6.0 3.0 18.0 0 0 0 0.0 51.414 CHAUFFEUR 4.0 8.0 8.0 4.0 24.0 0 0 0 0.0 51.415 GARDIEN 3.0 6.0 6.0 3.0 18.0 0 0 0 0.0 51.400 SALAJRES LOCAUX 29.0 480 48.0 29.0 154.0 0 0 0 0.0 SUBTOTAL51 101.5 132.8 129.6 79.9 444.0 8 35 65 290.0 TOTAL BASE COST 101.5 795.2 519.8 191.2 2064.3 45 938 77 1590.0 Contingencies 5 96 71 28 200 44 88 100 200.0 TOTAL COST 107 891 591 219 2264 45 1026 79 1790.0  39 Annex 2 RECOMMENDED GOVERNMENTAL REGULATORY MEASURES The following regulatory measures are recommended for the Government of Tunisia to encourage an accelerated phaseout of ODSs: a. Bans on the use of ODSs for specific purposes at specifically given dates in accordance with the recommended ODS phaseout schedule (table 3). It should be noted that this schedule is by no means definitive and will be updated according to the recently agreed Copenhagen Amendments. Further studies into the detailed consumption patterns and negotiations with the ODS-using industries is mandatory before issuing any bans. Based on the revised Country Program and with the assistance of the institutional advisor and the National Ozone Committee, the ANPE will prepare the necessary legislation for the introduction of the bans. b. Special ODS tax on imports of all controlled substances (Table 1). The purpose of the tax is to encourage the initial substitution of ODSs in easily substitutable applications such as aerosols and flexible foams. The revenue from the ODS tax could be used for local financing of projects aimed at ODS substitution and information dissemination. The tax should be higher than the incremental substitution costs in these applications but less than the present sales price of CFC-12 on the local market which is around US$ 4 per kilogram. A tax of US$ 1-2 per kg is suggested. Tax increases will be considered at a later stage in the phaseout plan. c. Tax exemptions for imports of ODS conserving technology. Imports of ODS conserving technology, such as recovery and recycling machines and safety equipment should be exempted from the general import duty, as is already the case for other environmental equipment imported to Tunisia. d. Standards for recycled CFC and foam densities. International (ARI) standards for recycled CFC will be provided in order to guarantee the quality of repairs using recycled refrigerants. In the future, standards for minimum densities of flexible foam of e.g. 18-20 kg/in3 will encourage the use of CO/water blowing instead of CFC or other blowing agents. The standards should be communicated to the affected industries.  40 RECOMMENDED MONITORING SYSTEM FOR ODS It is recommended to establish a system for monitoring ODS consumption in Tunisia with the purpose of controlling compliance with the Montreal Protocol and the national ODS phaseout policy. Furthermore, the monitoring system will function as the basis for efficient and considerate policy actions and adjustments of the regulatory and phaseout schedule. The system should allow for monitoring of ODS imports, price trends and consumption patterns (by end user sector and type of ODS). The monitoring system should cover the substances controlled by the Protocol, i.e. CFCs, halons, methyl chloroform and carbon tetrachloride, as well as HCFC-22 and other transitional and potential substitute chemicals. The Customs Department ('Directorate des Douanes') would hold responsibility for recording all imports and exports of ODSs both as chemicals and in products containing ODSs (refrigerators, aerosol cans, foam formulations, insulation sheets, fire fighting equipment, mobile air conditioners in cars, etc.). The recording should following the International Classification System (ISCS). Customs should also register the names of the importers and exporters, and they would report on a regular basis (e.g. quarterly) to both the Institut National de Statistique (INS) and the National Ozone Committee. As registration of imports and exports is already computerized, it would simply be a question of expanding this system.  41 RECOMMENDED ODS LICENSING AND ACCREDITATION OF REFRIGERATION TECHNICIANS It is recommended that ANPE incorporates in its regulations of ODS phaseout a licensing system in order to facilitate the monitoring of all sales of ODSs in Tunisia. When fully implemented, a license will be required for all imports and internal purchases of ODSs as chemicals. The requirements for obtaining the ODS license shall be worked out for each group of ODS users. The potential for a marketable permit system may be explored as a future option. In the case of refrigeration service personnel, it is recommended that the license is attached to an accreditation system for service technicians. Only certified service personnel/shops should obtain and ODS license. To obtain a certificate, the service technicians must complete a short ODS handling course (see Annex 1 project component for refrigeration training and maintenance), encouraging improved servicing procedures and recovery and recycling of CFCs. The certificate could also be tied to equipment requirements such as vacuum pumps, recovery equipment, etc. It is, of course, necessary that the training be made available to all before the license system can be fully implemented. The cost of training will be covered by the project component for a period of three years.  42 Annex 3- Page 1 of 5 SOUS-PROJET DE CONCEPTION ET D'ESSAIS DE FABRICATION DE REFRIGERATEURS SANS CFCs CONVENTION Entre les soussignrs: L'Agence Nationale de Protection de l'Environnement, sise centre urbain nord, immeuble ICF, 2080 Ariana, repr6sentee par Monsieur Touhami HAMROUNI, President Directeur General, et indiff6remment denommee ci-apres "Agence Nationale de Protection de I'Environnement" ou "ANPE" aux fins de la presente convention. D'une part Et Le groupe Tabrid, sis a Ben Arous, Zone Industrielle de Bir El Kassaa, represente aux fins de la pr6sente convention par son President Directeur Gen6ral, Monsieur Afif EL KILANI, et indifferemment d6nomm6 ci-apres "Tabrid" ou "Groupe Tabrid" aux fins de la pr6sente convention D'autre part Attendu que A/ Par un accord de don ( I'accord de don) conclu entre la Republique Tunisienne ( le Beneficiaire) et la Banque Internationale pour la Reconstruction etile Developpement (la Banque), la Banque a accepte d'accorder un don de la Caisse Fiduciaire du Protocole de Montreal (le Don) au Ben6ficiaire aux conditions stipulees dans I'accord de don pour financer le Projet de D6monstration en vue de I1'limination des substances destructrices de I'Ozone (le Projet); et Attendu que, B/ Le projet sera execut6 par I'Agence Nationale de Protection de I'Environnement avec l'assistancepu B16nficiair#t que, dans le cadre de ladite assistance,.le B6n6ficiaire mettra a la disposition de l'A PE les fonds du don conformement aux dispositions de l'accord de don; Pour ces motifs, les parties a la presente convention sont convenues de ce qui suit:  Annex 3 43 Page 2 of 5 ARTICLE PREMIER : OBJET DE LA CONVENTION L'Agence Nationale de Protection de l'Environnement confie au groupe Tabrid, qui l'accepte, la mission d'execution du sous-projet de demonstration, de conception et de la mise en fabrication de 10 prototypes de refrigerateurs fonctionnant avec le HFC 1 34a comme refrigerant, et utilisant 1a mousse d'isolation a faible teneur ou sans CFCs (composantes I1 et 12), et ce, dans le cadre du Projet et du Programme National pour l'elimination des substances destructrices de la couche d'ozone ( SDOs). ARTICLE DEUX : PIECES CONTRACTUELLES Les pieces contractuelles sont les suivantes; et en cas de divergences, seront prises en consideration dans l'ordre suivant 1/ La presente convention 2/ Le document de travail des composantes 1 1 et 12 du Projet 3/ Les termes de r6ference pour le recrutement des coordinateurs, du technicien, et des experts intemationaux 4/ Annexes: sept (7) annexes, faisant partie de la presente convention. ARTICLE TROIS: OBUGATIONS DU GROUPE TABRID 3.1- Le groupe Tabrid affectera un coordinateur a temps partiel et un technicien a plein temps pour travailler sur le sous-projet objet de cette convention. Le coordinateur et le technicien travailleront sous la direction du chef de projet designe par I'ANPE, conformement aux termes de r6ference figurant aux annexes 1 et 2. 3.2- Le groupe Tabrid assistera I'ANPE a selectionner et a engager un expert dont les activites sont precisees aux termes de ref6rence figurant a I'annexe 3. 3.3- Le groupe Tabrid s'engage a mettre en oeuvre les moyens n6cessaires, tant en personnel, qu'en mat6riel, pour executer le sous-projet dans les . lais prescris, conformrment au document de travail des composantes 11 et 1 2, objets de la presente convention et figurant en annexes 4 et 5. 3.4- Le groupe Tabrid s'assurera que le coordonnateur qu'il aura affecte au sous-projet 6tablira la liste des 6quipements et des matieres d'oeuvre, ainsi que les sp6cifications techniques correspondantes, et la partie technique des termes de r6ference relatifs au mandat de l'expert. 3.5- Le groupe Tabrid est responsable de la bonne fin des composantes faisant l'objet de la pr6sente convention, de la qualite technique du travail et du personnel d'op6rations et de la preparation des rapports d'avancement mensuels et d'achevement des composantes 1 1 et 12. Le groupe Tabrid assistera I'ANPE a diffuser les conclusions du rapport d'achevement du sous-projet.  44 Annex 3 Page 3 of 5 3.6- Le Groupe Tabrid stengage: i/ A fournir les resources et les fonds necessaires a l'ex6cution des composantes 11 et 1 2 du Projet; ii/ A Tenir les comptes et ecritures n6cessaires pour enregistrer conformement a des pratiques comptables appropri6es les operations, les ressources et les depenses relatives aux composantes 1 1 et 12 du projet et a conserver une situation fi,4nancidre satisfaisante sur la base d'indicateurs jug6s acceptables par la Banque; iii/ A respecter toutes les normes et conditions de securit6 nationales ou intemationales qui auront ete fixees par I'ANPE; et iv/ A s'assurer et rester assure aupres d'assureurs dignes de confiance pour tous risques et msontants conformes a une saine pratique de l'assurance. ARTICLE QUATRE: OBUGATIONS DE L' ANPE: 4.1- L'ANPE s'engage a nommer un chef de projet dont le nom sera communique par 6crit au groupe Tabrid 15 jours apres la signature du contrat. 4.2- L'ANPE s'engage a financer la r6alisation des actions mentionnees dans le document de travail relatif aux composantes 11 et 12 (Annexes 4 et 5) sur pr6sentation de pieces comptables justificatives, conform6ment aux modalites prevues par ledit document et pour des montants ne d6passant ceux precises ci-apres pour le financement par le Don; Le co&t total de la composante 1 1 est estim6 a 395.000 $ E.U Le coOt total de la composante 12 est estime a 435.000 $ E.U Le financement par le Don de la composante 11 du Projet est arr&6 A un montant de 276.000 $ E.U (deux cents soixante.seize mille dollars des Etats Unis) Le financement par le Don de la composante 12 du projet est arrete a un montant de 305.000 $ E.U (trois cents cinq mille dollars des Etats Unis). 4.3- L'ANPE est charg6e de la passation des marches et de l'emploi des consultants conform6ment aux dispositions de I'Accord de Don. ARTICLE CINQ: DUREE DE LA CONVENTION Les ech6ances d'ex6cution sont celles prevues par le document de travail de la comrposante 1 1 et 1 2 du projet. La dur6e totale d'ex6cution des composantes 1 1 et 1 2 est de trois ans, au plus tard, non obstant, le 30 juin 1997. Ce delai commence a courir a compter de la notification par I'ANPE au groupe Tabnd du commencement des travaux des composantes 11 et 12 du projet  Annex 3 45 Page 4 of 5 ARTICLE SIX MODALITES DE PAYEMENT 6.1- Les paiments seront decaisses sur presentation de factures certifiees vraies et exactes. Le coordinateur et le chef de projet verifient les contrats et les factures et s'assurent qu'ils sont conformes aux dispositions de la convention relative aux composantes 1 1 et 12. L'ANPE, ou la ou les personnes qu'elle aura designee A cet effet, sera, ou seront l'ordonnateur du payement des depenses. 6.2- En cas de different, I'ANPE decaissera la partie non contestee et decaissera, s'il y'a lieu, la partie contestee au reglement du different 6.3- I'ANPE se reserve le droit d'auditer les comptes des composantes, conform6ment aux dispositions de I'Accord de Don. 6.4- Les representants de la Banque, dument habilit6s, ont le droit de v6rifier les comptes conformrment aux dispositions de l'Accord de Don. ARTICLE SEPT : SUIVI DU PROJET Le coordinateur 6labore un rapport mensuel d'avancement , en trois copies, et le soumet au chef du projet Au plus tard 30 jours apres l'achevement de chaque composante , le coordinateur 6tablira et communiquera a I'ANPE un rapport final en trois copies, qui indiquera outre 1'etat d'achevement du projet, les e6lments d'un -rojeL futur a 1'echelle industrielle, dont l'identification commencera avec le demarrage de la composante et l['laboration se poursuivra pendant la duree d'ex6cution de celle-ci. L'ANPE se reserve le droit de demander a tout moment toutes informations relatives a l'execution du sous-projet. L'ANPE aura le droit de suspendre ou de supprimer le droit de Tabrid d'utiliser le materiel, les matieres d'oeuvre et I'assistance technique mis a Ia disposition de Tabrid par I'ANPE au moyen des fonds du Don, en cas de manquement par Tabrid aux obligations qui lui incombent en vertu de la pr6sente convention. ARTICLE HUfT: DROIT DE PROPRIETE Les archives, les resultats des essais ainsi que les plans 6tablis et toute autre information technique et financiere concernant les composantes 11 et 1 2 seront la propriete exclusive de I'ANPE. ARTICLE NEUF: REGLEMENT DES UTIGES Toute contestation ou litige entre les parties contractantes portant sur l'interpretation ou l'application de l'une des clauses de la p.esente convention ou des pieces contractuelles citees a I'article 2 de 1a presente convention doit faire l'objet d'une tentative de conciliation a l'entente directe ou indirecte.  46 Annex 3 46 Page 5 of 5 A d6faut de regiement amiable, le litige sera du ressort du tribunal de premiere instance de Tunis ARTICLE DIX : LANGUE La langue de la convention est la langue francaise, qui seule fait foi en cas de traduction. ARTICLE ONZE: TIMBRE ET ENREGISTREMENT Les frais de timbre et d'enregistrement de la presente convention sont a la charge du Groupe Tabrid. Fait a Tunis, en date du ............. LE PRESIDENT DIRECTEUR GENERAL LE PRESIDENT DIRECTEUR GENERAL DE L'ANPE DU GROUPE TABRID TOUHAMI HAMROUNI AFIF EL KILANI Annexes a, et faisant partie de la presente convention Annexe 1: Termes de ref6rence des coordinateurs Annexe 2: Termes de reference du technicien Annexe 3 : Termes de ref6rence des experts intemationaux (Assistance technique) Annexe 4: Document de travail de la composante 11 Annexe 5 : Document de travail de la composante 1 2 Annexe 6: Planning des activites des composantes 11 et 12 Annexe 7: Budgets des composantes 11 et 12  REPUBLIC OF TUNISIA DEMONSTRATION PROJECT FOR THE PHASEOUT OF OZONE DEPLETING SUBSTANCES PROJECT TABLES   47 Table 1: Controlled Substances by Consumption in Tunisia, 1991 Substances controlled by the Montreal Protocol Consumptiont2 ODP Factor Consumption (metric tonnes) (ODP tonnes) Annex A, Group I CFC-I 1 685 1.0 685 CFC-12 360 1.0 360 CFC-113 5 0.8 4 CFC-I 14 0 1.0 0 CFC- 115 10 0.6 6 Subtotal 1,060 1,055 Annex A, Group 11 Halon 1211 0 3.0 0 Halon 1301 2 10.0 20 Halon 2402 0 6.0 0 Subtotal 2 20 Annex B, Group I Other CFCs 0 1.0 0 Annex B, Group 11 Carbon tetrachloride (CTC) 1 1.1 I Annex B, Group IIl Methyl chloroform (MCF) 10 0.1 1 Total Controlled Substances 1,073 1,077 Annex C, Transitional Substances HCFC-22 140 0.05 7 Other HCFCs 0 0 Total 140 7 1/ Production of ODSs = 0. 2/ CFC consumptfon equals imports i.e. total CFC imports in 1991 = 1,070 metric tonnes, except for 10 tonnes of CFC-1 2 which were re- exported to neighboring countries.  Table 2: Estimated ODS Consumption in Tunisia by Use and Application, 1991 Use Sector Substance Application Consumption (metric tons) REFRIGERATION Annex A, Annex A, Annex B Annex C Group I Group II Group II CFCs Halons and III Domestic CFC-12 refrigerators for the local market 20 refrigerators for export 40 servicing (recharging, purging and leak testing) 125 Commercial CFC-12 production of comm. refrig. equipment, installation 15 and servicing CFC-1 15 in R-502 for installaton and servicing 10 HCFC-22 production of comm. refrig. equipment, installation (30) and servicing Industrial CFC-12 installation and servicing 20 HCFC-22 installation and servicinig (40) AIR CONDITIONING CFC-12 servicing of car air conditioners <5 . 0c CFC-12 servicing of central type air conditioners <5 HCFC-22 production, installation and servicing of unit air (70) coinditioners FOAM (Polyurethane) Rigid CFC-I I insulation foam in domestic refrigerators for the local 60 market CFC-I I insulation foam in domestic refrigerators for export 100 CFC- 11 insulation in commercial refrigeration units 15 CFC-12 EPS packaging 10 Flexible CFC-l I mattresses and cushions 400 AEROSOLS CFC-I 1+12 mainly cosmetics, air fresheners, insecticides and 230 pesticides SOLVENTS CFC-1 13 various minor applications <5 CIC various minor applicatons I MCF various minor applications 10 FIRE FIGHTING Halon- 1301 stationary firefighting equipment 2 TOTAL ODSs 1,060 2 .I 140 A , A . ,  49 Table 3: Recommended Schedule of Bans on ODS use in Tunisia The use regulated of ODSs is allowed in the production and servicing of the below listed application areas until the given date January 1st 1995 Flexible foam for mattresses and cushioning Aerosol cans January 1st 1996 Refrigerant in new domestic refrigerators * Polyurethane foam in domestic refrigerators January 1st 1997 * Refrigerant in production and installation of new commercial and industrial refrigeration and air conditioning equipment * In new imports of mobile air conditioners January 1st 1998 * Polyurethane foam in new commercial refrigeration equipment * Extruded polystyrene foam for packaging materials January 1st 2000 * Solvents January 1st 2010 Servicing of domestic refrigerators * Servicing of commercial and industrial refrigeration and air conditioning equipment * Servicing of mobile air conditioners AX halonsl January 1st 1998 * Installation of new fire fighting equipment January 1st 2007 * Servicing of halon fire fighting equipment Carbon tetrachlorjde- January I st 2000 * All uses .Meth clioroform- January 1st 2005 * All uses 1/ Recycled ODSs should not be regulated.  50 Table 4: Controlled Substances and Phaseout Schedules Montreal London Revised EEC Protocol Arnendmnents to the Targets Protocol September 1987 June 1990 April 1992 CFCs Base year 1986 Base year 1986 Base year 1986 11, 12, 113, 114,115 Freeze by 1989 Freeze by 1989 Freeze by 1989 -20% by 1993 -50% by 1995 - 85% by 1994 - 50% by 1998 - 85% by 1997 - 100% by 1996* 100% by 2000 Halons Base year 1986 Base year 1986 Base year 1986 1211, 1301,2402 Freeze by 1992 Freeze by 1992 Freeze by 1992 .50% by 1995 - 85% by 1994 -100% by 2000 -100% by 1996* Other fully halogenated CFCs No regulation Base year 1989 Base year 1989 13, 111, 112, 211, 215, 216, 217 -20% by 1993 - 85% by 1994 -85% by 1997 -100% by 1996* - 100% by 2000 Carbon tetrachloride No regulation Base year 1989 Base year 1989 CC4 -85% by 1995 - 85% by 1994 - 100% by 2000 100% by 1996* Methyl chloroform No regulation Base year 1989 Base year 1989 (CH3 CCI3) Freeze by 1993 Freeze by 1992 -30% by 1995 - 85% by 1994 -70% by 2000 - 100% by 1996* -100% by 2005 * Indicates possible temporary exemption foressential use.  REPUBLIC OF TUNISIA DEMONSTRATION PROJECT FOR THE PHASEOUT OF OZONE DEPLETING SUBSTANCES PROJECT FIGURES   Figure 1 Tunisia ODS Consumption 1991 CFC-113 & 115 10 CFC-12 360 Fire Fighting Aerosols 2?zefrigerants Halon-1301 20 240 2n ..............SolvenLs Rigid Foam CFC-11 685 Flexible Foam 400 By Type of ODS By Major End-Uses Total Consumption: 1,077 ODP Tons  52 Sactire a itrati |Banque | Gouvernement Tunisien mondiale Ministere de ia C.I.LIE. A.N.P.E. (MEAT) Gestion du projet Projet #1: Demonstration en vue de I'elimination des SDO +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ composante: 12 21 31 41 responsable: PDG Tabrid PDG Tabrid M'Zabi coordonnateur. Dagi Monjez expert: technicien: Document de Travail Annexe 51.5, page 1  53 gfrhFglnacer Fonds du Protocole de de caissements Montreal . documentation accord Coop&ration lnternationale -