Turkey - Phase-Out of Ozone Depleting Substances Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 20499 IMPLEMENTATION COMPLETION REPORT (21934) ON A GRANT IN THE AMOUNT OF US$6.165 MILLION TO THE THE REPUBLIC OF TURKEY FOR A PHASE-OUT OF OZONE DEPLETING SUBSTANCES PROJECT June 5, 2000 Energy Sector Unit Europe and Central Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective February 15, 2000) Curency Unit = Turkish Lira (TL) TL 100,000 = US$ 0.18 US$ 1 = TL 550,000 FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS GOT - Government of Turkey GWP - Global Warming Potential MOE - Ministry of Environment MOF - Ministry of Finance MLF - Multilateral Fund of the Montreal Protocol MP - Montreal Protocol NGO - Non-Governmental Organization ODS - Ozone Depleting Substance SME - Small and Medium Size Enterprise TDF - Technology Development Foundation UNDP - United Nations Development Program UNEP - United Nations Environment Program UNIDO- United Nations Industrial Development Organization Vice President: Johannes Linn, ECAVP Country Director: Ajay Chhibber, ECCO4 Sector Manager: Peter Thomson, ECSEG Task Team Leader/Task Manager: Varadarajan Atur, ECSEG  FOR OFFICIAL USE ONLY TURKEY PHASE-OUT OF OZONE DEPLETING SUBSTANCES PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 7 6. Sustainability 7 7. Bank and Borrower Performance 8 8. Lessons Learned 9 9. Partner Comments 9 10. Additional Information 10 Annex 1. Key Performance Indicators/Log Frame Matrix 11 Annex 2. Project Costs and Financing 12 Annex 3. Economic Costs and Benefits 14 Annex 4. Bank Inputs 15 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 16 Annex 6. Ratings of Bank and Borrower Perfonnance 1 7 Annex 7. List of Supporting Documents 18 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: P008871 Project Name: PHASING OUT OZONE DE Team Leader: Varadaraj an Atur TL Unit: ECSEG ICR Type: Core ICR Report Date: June 5, 2000 1. Project Data Name: PHASING OUT OZONE DE L/C/TF Number: 21934 Country/Department: TURKEY Region: Europe and Central Asia Region Sector/subsector: VY - Other Environment KEY DATES Original Revised/Actual PCD: 12/01/93 Effective: 03/01/94 04/04/94 Appraisal: 05/03/93 MTR: Approval: 01/24/94 Closing: 12/31/96 12/31/99 Borrower/lImplementing Agency: Govemment of Turkey /Ministry of Environment, TDF, Arcelik A.S. Other Partners: STAFF Current At Appraisal Vice President: Johannes F. Linn Wilfred Thalwitz Country Manager: Ajay Chhibber Michel Wiehen Sector Manager: Peter D. Thomson Franco Batzella Team Leader at ICR: Varadarajan Atur Raghuveer Sharma ICR Primary Author: Varadarajan Atur; Elliott Hurwitz; Thomas W. Waltz 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN--Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: HS Sustainability: HL Institutional Development Impact: H Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S HS Project at Risk at Any Time: No Background and Introduction The Vienna Convention for the Protection of the Ozone Layer (1985) and the Montreal Protocol (MP) on Substances that Deplete the Ozone Layer (1987) are international environmental agreements that call for the phase-out of ozone-depleting substances (ODS) that deplete the stratospheric ozone layer. More than 160 countries have ratified the two conventions. The MP was amended in 1990 in London to establish a Multilateral fund (MLF) to support  implementation by developing countries. There have been further amendments in 1992 in Copenhagen, in 1995 in Vienna, and in 1995 in Montreal to plan the phaseout of methyl bromide. ODS phase-out assistance provided to developing countries is coordinated by the MP implementing agencies: United Nations Environment Program (UNEP), United nations Development Program (UNDP), United Nations Development Program (UNIDO), and the Bank. Turkey ratified the MP in 1991, and-with the assistance of the Bank-prepared an Action Plan consisting of policies, actions, and investments needed to initiate ODS phaseout. The Action Plan includes key interventions such as increased use of ODS substitutes, monitoring of ODS consumption, and programs to raise public and industry awareness. The Action Plan also identifies demonstration and investment projects that meet the guidelines of the MP Executive Committee. The project for the Phase-Out of Ozone Depleting Substances (PODS-I) is part of the Action Plan, and is funded by the MP Multilateral Fund, with the Bank as Trustee. PODS-I was intended to, and did, lay the technical, political, and policy/regulatory foundation for Turkey to begin the phaseout of ODS. 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project objective was to assist ODS-using industries in Turkey to efficiently and effectively phase out ODS usage through adoption of policy, technological, and monitoring measures. The phase out was to be effected in accordance with the MP, as ratified by Turkey, and in accordance with the agreed strategy and Action Plan. The project objective was clear and was plainly relevant and important to Turkey's obligation under the MP to phase out ODS usage. It was also consistent with the Bank's Country Assistance Strategy for Turkey, as well as the Bank's overall goal of fostering environmentally-sustainable development. It was also important to the country in stimulating manufactured exports and increasing integration with the European Union (which heavily restricts imports of ODS-using equipment), major goals of the government. The project goals were realistic since they comprised a simple, straightforward plan for taking the initial steps needed for ODS phaseout. While the project was not complex, it necessarily involved some technical risk, as some of the activities involved had not previously been undertaken in a developing country. In particular, the refrigerant recycling and recovery sub-component was risky in that it had not yet been demonstrated that these functions could be accomplished in an economically feasible manner. The project was demanding on the Ministry of Environment, as it required the Ministry to: substantially increase its knowledge of ODS and the means by which they could be phased out; develop a National Ozone Policy (in close consultation with industry); and coordinate with other components of government in regulating trade in ODS (Undersecretariat of Treasury, Undersecretariat Foreign Trade, and Customs Service). 3.2 Revised Objective: -2 -  The objectives were not revised. 3.3 Original Components: The project was implemented by means of three components: * Investment Projects and Technology Transfer for ODS Phaseout--The first component consisted of investment projects, including technology transfer, that facilitated ODS phaseout in the refrigeration sector. This was implemented by Arcelik A. S., Turkey's largest refrigerator manufacturer, which included introduction of ODS-free technology into its refrigerator production; recovery and recycling of refrigerants in the Istanbul area servicing centers; and recovery and recycling of refrigerants at refrigerator production facilities of Arcelik. (The rationale for the selection of Arcelik is discussed below) * Preparation of Further ODS Phaseout Projects--The second component-implemented by the Technology Development Foundation (TDF)-consisted of demonstration projects or related activities that served to introduce new technologies or alternative products. These activities often comprised preparation of investment projects that could be eligible for funding from the MLF. * Institutional and Management Strengthening--The third component-implemented by the Ministry of Environment-comprised institutional and management strengthening, including establishment of the Ozone Panel; establishment of ODS monitoring systems; public awareness programs; and establishment of regulatory frameworks for future use of ODS. Of total project funding, 87%, or US$5.28 million, was allocated to the first component, implemented by Arcelik, with 65% of the funds provided to Arcelik in the form of a loan and the balance as a grant; 7% to the second component (TDF); and 6% to the third component (MOE). Assessment of design The project design was straightforward and was directly related to assisting Turkish companies across several ODS sectors and applications (e.g., refrigeration, insulation, aerosols, foam, fire extinguishing) to phase out ODS use. The project included activities aimed at facilitating ODS phaseout by large companies, such as Arcelik (which sells more than 50% of the country's refrigerators designed for home use), as well as those aimed at small and medium enterprises companies that might lag unless an effort was made to raise their awareness of the legal requirement and methods by which they could comply. Finally, the project aimed to strengthen the MOE, and in particular to support its efforts to assemble an Ozone Panel, and reach a policy consensus with industry. TDF, one of the implementing agencies, played a key role in an earlier Bank project, the Technology Development Project. TDF's overall activities are supported by Government, industry, and the Bank, and the organization had successfully contributed to the promotion of public-private cooperation in applied research and development. TDF also had extensive experience in research and development project selection, monitoring, and supervision. -3 -  Arcelik was selected because (a) it is the largest producer; (b) among companies invited to submit proposals, its project promised to make the greatest contribution to the overall Action Plan objectives; (c) it is vertically integrated into compressor and components manufacturing, as well as research and development; and (d) it has long played a proactive role in ODS phaseout. Because parts of the project conveyed commercial advantages to Arcelik, 65% of the firm's funding under the project was provided as a loan, with the balance as a grant. PODS-I was designed with a Revolving Fund, intended to re-lend funds repaid by Arcelik to finance projects of other manufacturers pursuing ODS phaseout. PODS-I was the first project approved under the MP to have the Revolving Fund feature, with funds re-lent by the Revolving Fund to be on the same terms as the original loan to Arcelik: 0% interest, 2 years grace, and 3 years for repayment. As described later, TDF did not re-lend funds from the Revolving Fund as planned because the acceptability of any proposals that would have resulted would have been unclear due to changing MP eligibility criteria. TDF was successful, however, in submitting firms' proposals to the MLF and securing funding under the follow-on PODS-II project. 3.4 Revised Components: The components were not revised. 3.5 Quality at Entry: Quality at Entry was satisfactory. As noted above, the project was an integral part of the Government's Action Plan-prepared with the assistance of the Bank-to initiate ODS phaseout. The project design was straightforward, and was aimed directly at assisting companies to phase out ozone use, and to helping bolster MOE and support its efforts with the Ozone Panel to reach a policy consensus with industry. Project risks were reasonable, even including the recovery and recycling of ODS by Arcelik, which was recognized as a pilot effort under the Project. Due to the difficulties encountered, Arcelik ended this sub-component after completion of only a fraction of the activities initially envisioned. Nearly all the assumptions underlying the project were realistic, except for the estimate of how long it would take to achieve a consensus between government and industry on the National Ozone Policy. Although the process was highly effective--with an excellent working consensus being reached--it took longer than anticipated and resulted in a delay in project completion. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Project outcome is judged as highly satisfactory. Turkey has been very successful in phasing out ODS. (Phaseout means that imports or production of ODS or ODS-using equipment are banned. Turkey never produced ODS, so its entire supply was imported. However, continued operation and servicing of existing ODS-using equipment is permitted.) Turkey's annual consumption of Ozone Depleting Substances (ODS) declined from around 4,000 tons in 1996 to 2,600 tons in 1999. A National Ozone Policy was developed and promulgated in 1999, with a high degree of consensus between government and industry. (The evidence for the success of this effort is that industry has not voiced any opposition to the Policy.) This measure banned import of ODS and ODS-using equipment as of January 1, 2000, and also banned use of ODS in manufacturing and production of ODS-using products. While there is an overall "ban" on ODS - 4 -  imports, MOF grants a limited number of licenses for ODS imports to service existing equipment (no ODS are manufactured in Turkey). Although as an MP Article 5 (developing) country Turkey was legally required to phase out ODSs by 2010, the country elected to accelerate phase out of certain ODSs, such as refrigerants, which account for the largest part of ODS consumption. Turkey was the first Article 5 country to promulgate a National Ozone Policy and associated regulations to phase out import and production of ODS-using products and implement an accelerated phase-out schedule (relative to the mandate for Article 5 countries under the Montreal Protocol) during the transition to non-ODS technologies. Turkey was also the first Article 5 country to introduce and demonstrate the viability of converting ODS domestic refrigeration production to: (1) the zero-ODS refrigerant HFC-134a; (2) the zero-ODS, low GWP hydrocarbon refrigerant, HC-600a; and (3) the zero-ODS, low GWP hydrocarbon blowing agent, cyclopentane. And in 1997, Turkey received an award from the MP as one of the nine most successful Article 5 countries. out of 49, in implementing the MP. 4.2 Outputs by components: (1) Investment Projects and Technology Transfer for ODS Phaseout-- Efforts under the project by Arcelik, A. S. to facilitate ODS phaseout, were largely successful. Arcelik's ODS consumption declined from 455 tons in 1991 (when the firm began the small-scale phaseout of ODS on its own) to zero in 1999, at the same time that its annual refrigerator production increased from 478,000 to an estimated 1,210,000. Hadthere been no phaseout, the company estimates that its 1999 ODS consumption would have been 1,041 tons. Technical knowledge and experience gained in the Arcelik effort was shared with the Technology Development Foundation and with the Bank, and in this way the experience gained was also shared with other interested Turkish firms. However, the company's pilot effort to demonstrate the economic viability of ODS recovery and recycling was not successful. The yield in recovered and re-useable ODS, using the technology available in 1995 and 1996, was not sufficient to demonstrate this concept, and the company decided to end this activity after 10 of the planned 60 recovery units were established. (It is believed that newer technology and recent experience in other Article 5 countries would currently permit economically feasible recovery efforts) (2) Preparation of Further ODS Phaseout Projects--Under the project, MOE achieved a much better knowledge of the profile of ODS-using sectors via the performance of three surveys. Also, the awareness of firms concerning regulatory requirements for ODS and technologies available for phaseout was substantially increased by means of 21 demonstration projects and numerous seminars that attracted the participation of small and medium-sized enterprises. Finally, many fnrms were assisted in the development of phaseout-related proposals that were funded under the follow-on project, PODS-II, or which were submitted to the MP Multilateral Fund. Repayment by Arcelik to TDF's revolving fund started in 1997. Subsequently, other firms which were financed from the follow-on PODS-II project also contributed to the revolving fund, which now has about US$3.5 million in its special account. As provided in the Grant Agreement, - 5 -  TDF could have re-lent part or all of these funds to other eligible projects, especially those submitted by small and medium enterprises. Instead, these projects are now being financed by the MLF through the PODS-II project. (3) Institutional and Management Strengthening-- The project also resulted in a substantial increase in MOE knowledge of ODS and potential phaseout approaches. MOE, which was a new agency at the time that the project was initiated, established the Ozone Panel, and also developed a comprehensive regulatory framework, although some achievements came later than originally anticipated. The Ministry conducted a very successful-though lengthy-process of consensus development with industry, culminating in a ban on ODS imports (1998) and the National Ozone Policy (1999), both implemented with little or no industry opposition. The Ministry also substantially strengthened its data-processing capabilities, and its systems were linked to the Undersecretariat of Foreign Trade, which aids in tracking ODS imports under the limited licenses granted. MOE also established a monitoring system to track imports and usage of ODS. However, achievement of these goals was delayed by frequent changes in the Turkish Government, the time needed to achieve a policy consensus, an initial lack of familiarity with World Bank procurement procedures, and the need for MOE to coordinate with the Ministry of Finance and Undersecretariat of Foreign Trade which is responsible for implementing restrictions on ODS imports. An additional project goal was to increase public awareness of the ODS problem, and press coverage of the industry seminars contributed to that end. However, two RFPs were promulgated to develop public awareness campaigns, but no firms responded to either RFP, reportedly due to the very low budget for the task. An individual consultant has prepared a public awareness campaign strategy, which is planned to be implemented under the PODS-II. 4.3 Net Present Value/Economic rate of return: An NPV/ERR was not calculated for the project. However, a standard measure of cost-effectiveness, $/kg of ODS phased out, was calculated for component 1, conducted by Arcelik. While the projected cost in the Project Document was $6.25/kg phased out, the actual cost was $5.63, approximately 10% less than planned. 4.4 Financial rate of return: N/A 4.5 Institutional development impact: The project had a fundamental impact on the country's ability to utilize its human, financial, and technical resources on ODS phaseout, and consequently it is judged that Institutional Development Impact was high: * From a very low initial level of knowledge, the project helped the government and industry achieve a substantial understanding of the ODS problem. The Ozone Panel meetings and additional workshops were very helpful in educating various segments of industry and the public. And MOE developed substantial knowledge of the profile of firms working in this sector. * Arcelik advanced considerably in its technology and know-how in dealing with ODS - 6 -  phaseout. (This knowledge was shared with other Turkish firms.) This served as a stimulus to many other companies which had held back until they saw Areclik's substantial achievements. * MOE developed substantial technical and policy expertise in this area, and also bolstered its computer system, which was networked with that of the Ministry of Finance. * The 1999 promulgation of a National Ozone Policy, in line with best international practice, was a substantial achievement for a developing country. This policy provided the framework for the implementation of a regulatory regime supportive of the Government's goals in this area. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The MP Multilateral Fund policy environment was rapidly evolving during the period of PODS-I, and this caused delays in the preparation of MLF Executive Committee guidelines and project eligibility criteria. 5.2 Factors generally subject to government control: Frequent changes of government made it more difficult to implement the policy and trade aspects of the project. Each time there was a change at the top of each agency, many civil service staff down through the ranks also changed, requiring a re-education process, resulting in substantial delays. 5.3 Factors generally subject to implementing agency control: As noted earlier, the implementing agencies - TDF and MOE - demonstrated substantial competence to handle all aspects of implementation, though MOE was directly affected by changes in government. TDF did not utilize the Revolving Fund to re-lend funds to assist small and medium-sized enterprises in ODS phase-out, but instead processed the project proposals for fnancing by MLF itself. 5.4 Costs andfinancing: There were no major cost changes. The original closing date of the project was December 31, 1996, while the actual closing date was December 31, 1999-a project duration of approximately six years vs. the planned three years. The reasons for this were that the project was delayed by: frequent changes in the Turkish Government; the lengthy (but ultimately highly successful) effort to achieve policy consensus; a longer-than-expected period required by TDF to develop demonstration projects; an initial lack of MOE familiarity with World Bank procurement procedures; and the time required for MOE to coordinate with the Ministries of Treasury and Foreign Trade over implementing a ban on ODS imports. 6. Sustainability 6.1 Rationale for sustainability rating: Sustainability is judged to be highly likely: * The National Ozone Plan contains a schedule for the complete elimination of ODS, and Turkey is committed to its implementation. -7 -  * Turkey has banned ODS import or use in manufacturing, and industry has willingly complied. * The consciousness of manufacturers across all ODS-using sectors has been raised, and there is considerable interest in new technologies that avoid ODS. * The country's desire to meet European norms will be a strong factor in stimulating further progress in this area. (In December, 1999, Turkey was invited to be a candidate for EU membership.) * PODS-II and the MP are funding additional projects that will provide an impetus to make further progress in this area 6.2 Transition arrangement to regular operations: Transition to regular operations is facilitated by the existence of PODS-II--effective in December, 1995--a follow-on project also designed to facilitate ODS phaseout. PODS-II permitted TDF to continue assisting firms to prepare ODS phaseout proposals which could then be considered by the MP. 7. Bank and Borrower Performance Bank 7. 1 Lending: Lending performance was highly satisfactory, with quality at entry highly satisfactory and a straightforward project design that was very effectively aimed at facilitating ODS phaseout. GOT participation and commitment were substantial and the capacity of the implementing agency and all other project participants was excellent. 7.2 Supervision: Supervision overall was satisfactory. Overall progress was substantial: nearly all project goals were achieved, and the Bank transferred a substantial amount of technical information regarding ODS to the Government, Turkish companies, and others. During the first several years of the project, the Bank conducted technical seminars twice a year, which made available up-to-date technical information on substitutes for ODS, and technologies relating to how they might be used. The Bank facilitated the process of reaching a government-industry consensus on ODS phaseout, although as noted above this process took longer than expected. 7.3 Overall Bank performance: Overall Bank performance was satisfactory, with very good performance in all areas. Borrower 7.4 Preparation: Borrower performance in project preparation and appraisal was highly satisfactory, with an excellent project design and substantial outreach to stakeholders (industry). 7.5 Government implementation performance: Government implementation performance was very good, as the MOE did a thorough and painstaking job in working with industry to develop the National Ozone Plan (although it took longer than expected). The evidence for this assertion is that no objections were voiced by industrv when the plan was promulgated. As described earlier, MOE institutional development was substantial, and the agency established an effective regulatory regime. - 8 -  7.6 Implementing Agency: Performance of Arcelik was highly satisfactory as borne out by the results achieved. TDF performance was also very good: working with business and academnic organizations to develop ODS phaseout proposals consistent with MP criteria; monitoring progress of projects that received funding; facilitation of public awareness of the need for ODS phaseout. TDF helped raise the profile of ODS among small and medium-sized enterprises, and broke down traditional barriers between government and business in Turkey. 7.7 Overall Borrower performance: Overall Borrower performance was highly satisfactory. 8. Lessons Learned Administration of the grant through a local, non-governmental agency was generally positive-Turkish companies had confidence in TDF, and responded well to TDF supervision of the fund supporting ODS phaseout. TDF's performance in this regard was very good. Reaching a policy consensus, and inter-agency coordination, often takes longer than anticipated. In PODS-I, the MOE needed to coordinate with the Ministry of Finance and the Ministry of Foreign Trade. This took longer than expected, as did the (highly-successful) process of developing a policy consensus with business on the National Ozone Plan. The funds allocated to public and industry awareness campaigns were inadequate due to higher media costs than estimated in the Project. The Project Evaluation Process of the MP Executive Committee is Slow-Many organizations complained that a very long period elapsed before their proposals were considered. MP Proposal Evaluation Guidelines are Incomplete-In some cases the Executive Committee does not have guidelines by which to evaluate proposals. Delays by the MP Executive Committee in approving Turkey's pending Refrigeration Plan have meant that Turkey may need to increase 2000 ODS imports by 56 tons. The delays can also lead to loss of interest by companies. 9. Partner Comments (a) Borrower/implementing agency: Ministry of Enviromnent: The Project was very effective in supporting the activities of the Ministry, which is the main coordinating and implementing body of the Country Program, and in developing the sound environmental policy for early phase-out. Although the project has been satisfactory in meeting the project objectives and supporting the activities to meet the commitments made, the contradictions in the decisions of ExCom (e.g. incremental operating cost compensation claims), project deferrals and late or no response to the needs of early phase-out (e.g. non-approval of commercial refrigeration projects and non adoption -9-  of refrigerant management plans for high volume ODS consuming countries) had a negative effect on complete phase-out which was the primary objective pronounced in the policy. This may cause some components of the policy not to be implemented effectively and thus create a negative effect on meeting the overall objective of the Montreal Protocol. This may also impede the acceptance of greater commitments to ODS phase-out by other proactive Article 5 countries. Technology Development Foundation: Project was highly satisfactorily in meeting the project objectives and supporting the activities of TDF. As per defined roles in the project, TDF: * Informed industry about the requirement of phasing out ODS, alternative technologies and financial assistance through seminars and demonstration projects. * Prepared new investment projects and supervise / monitor them for successful phaseout with an innovative mechanism. * Acted as a financial intermediary for the disbursement of funds. Lessons learned: * Private sector, including SME's, highly interested with a fund implemented by a non-governmental organization (NGO) * Fund implementation through local executing agency is important for success. * NGO type local executing agencies have no red-tape, so that, they can give quick response to the needs of industry. * Very lean organizational structure supported by a large pool of consultants reduces office cost and service expenditures. * Clearly defined role and mechanisms for a local executing agency important for success. 3 Tailor-made products and services is more important working with different sectors. (project design, support, guidelines, for procurement, monitoring, reporting and certification) i Facilitative role of the World Bank team is important for success. Developing and enhancing partnership and creating new opportunities in environmental areas would lead to successful results in implementing new programs as per gained experience of project implementation and established strong structure of TDF. (b,) Cofinanciers: N/A (c) Other partners (NGOs/private sector): N/A 10. Additional Information - 10-  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: Wlkftor1MIAf poijeed jn last PSR ; AtIM es Estimate $/kg of ODP Phased-out at Arcelik $6.25* $5.63* Total annual ODP Phased-out at Arcelik (in 858 Metric Tonnes* 937 Metric Tonnese the first full year of zero-ODS operations) Establishment of ODS Recovery & Recycling Installation of 60 recoverytrecycling units Only 10 units installed, project terminated facilities via Arcelik due to lack of cost-effectiveness Enhanced industry awareness and support Through Ozone Panel meetings 5 Ozone Panel meetings conducted for ODS phase-out Long-term policy and regulatory actions for Only preparation of a regulatory framework High consensus-building regulatory action ODS phase-out was projected and National Ozone Policy were achieved and MOE's institutional capacity to implement regulabtions was enhanced. *Projected estimate is from the PODS-I Project Appraisal Document (PAD) of December 1993; Actual estimate is from Arcelik for 1997 in its Project Completion Report of May 1998. Output Indicators: I_IcatorlM ix Pr*ctd In lost PSR ActuaULatest Estimate Promulgate ODS regulatory framework and Regulatory framework by June 30, 1994 Regulatory framework was issued in July National Ozone Policy 1998 and the National Ozone Policy was published in the National Gazette on July 25, 1999 Develop and implement ODS monitoring September 30, 1994 December 1999 system Prepare an ODS Public Awareness As soon as feasible December 1999 Campaign No. of ODS phase-out projects prepared by Not projected 30 projects TDF for financing under PODS-Il No. of industry awareness/demonstration Not projected Industry awareness/demonstration projects projects were carried out for foams, refrigeration, solvents and halons sedors. No. of ODS sector surveys Not projected ODS sector surveys were conducted in the foams, refrigeration, solvents and MeBr sectors. Prepare strategy for the regulaton of ODSs March 31, 1994 October 1996 in Turkey Preparation of information booldets in Not projected Booklets were prepared on the ozone layer, Turkish guidelines for industry, and eligibility criteria for funding under the Montreal Protocol End of project - 11 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) qppraisal ActuallUtest Percentage of Estimate Estimate Appraisal Project Cost By Component Lt$ million US$ million Goods 1. (a) Arcelik 3.92 4.29 109 1. (2) TDF 0.20 0.11 53 1. (c) MOE 0.05 0.00 0 Consulting Services 2. (a) Arcelik 1.45 0.99 68 2. (b) TDF 0.30 0.32 107 2. (c) MOE 0.25 0.07 30 Special Account 0.00 0.32 Total Baseline Cost 6.17 6.10 Total Project Costs 6.17 6.10 Total Financing Required 6.17 6.10 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method& Expenditure Category ICB other2 N.Bf.F Total Cost 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 4.17 0.00 4.17 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 1.99 0.00 1.99 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 ____________________ ___ (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.00 0.00 6.16 0.00 6.16 (0.00) (0.00) (0.00) (0.00) (0.00) - 12 -  Project Costs by Procurement Arrangements (ActuallLatest Estimate) (US$ million equival nt) Expenditure ICS Procurement Method N.E.F. Total Cost Category ~~~~~NCB Other' 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.00 4.39 0.00 4.39 (0.00) (0.00) (0.00) (0.00) (0.00) 3. Services 0.00 0.00 1.38 0.00 1.38 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.00 0.00 5.77 0.00 5.77 (0.00) (0.00) (0.00) (0.00) (0.00) " Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 21 Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Comonent(in US$ million equivlent) Percentage of Appraisal Appraisal Estimate ActuaU/Latest Estimate i__________________ Bank Govt CoF. Bank Govt. CoF. Bank Govt CoF: Conversion of Refrigerator 4.90 5.01 102.2 0.0 0.0 Manufacturing Recovery/Reclaim of 0.40 0.23 57.5 0.0 0.0 CFC-12 in the Field Recovery/Reclaim in 0.06 0.00 0.0 0.0 0.0 Factory Arcelik Total 5.37 5.27 98.1 0.0 0.0 Institutional & 0.30 0.07 23.3 0.0 0.0 Management Strengthening (MOE) Preparation of Other 0.50 0.43 86.0 0.0 0.0 Projects (TDF) - 13-  Annex 3: Economic Costs and Benefits Not Applicable - 14 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 4 2 OE, EE, E Appraisal/Negotiation 4 2 FA, E, OO Supervision 6/94 4 FA, 00, E, EE S S 12/94 3 FA, O0, E S S 3/95 3 FA, 00, EE S S 9/95 3 FA, EE, 00 S S 3/96 3 FA, EE, 00 S S 10/96 2 EE, 00 S S 5/97 2 OO, EE S S 12/97 3 FA, OE, O0 S S 6/98 5 FA, OE, E, 00, A S S 10/98 3 OE, 00, A S S 7/99 5 FA, OE, E, 00, A S S 12/99 1 00* S S ICR 12/99 1 00 2/00 4 FA, OE, 00, A 3/00 1 IE * November 1999 supervision mission postponed until February 2000 due to earthquake in Turkey. Specialized staff skills: FA = Financial Analyst; EE = Environmental Expert; OE = ODS Expert; E = Economist; 00= Operations Officer; A = Agriculturist; IE = ICR Expert (b) Staff. | Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ (,000) Identification/Preparation 11.2 36.3 Appraisal/Negotiation 16.4 53.5 Supervision 53.8 154.6 ICR 8.0 29.9 Total 89.4 274.3 - 15 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating fMacro policies O H OSUOM O N * NA Sector Policies * H OSUOM O N O NA N Physical OH *SUOM ON ONA Financial OH *SUOM ON ONA F Institutional Development O H O SU O M O N 0 NA fEnvironmental * H OSUOM ON O NA Social F Poverty Reduction O H OSUOM O N * NA 0 Gender O H OSUOM O N * NA O Other (Please specify)