Multilateral Fund for the Implementation of the Montreal Protocol

In 1990, the Montreal Protocol established the Multilateral Fund for the Implementation of the Montreal Protocol to assist developing countries in achieving their compliance commitments with respect to the elimination of the production and consumption of ozone-depleting substances.

The Fund is financed by 49 industrialized countries, including Italy, on a three-year basis. In the three-year period 2018-2020, the total budget of the Fund is 540 million dollars and the share of the Italian contribution - established on the basis of the UN contribution scales - of which the Italian contribution amounts to 28,336,500 $ (or € 8,751,822 per year).

Italy also participates in the Executive Committee of the Fund: the body responsible for developing and overseeing project guidelines, promoting and monitoring the implementation of operational policies, and managing the Fund's finances by establishing disbursement methods.

The Fund finances projects for technological conversion, technical assistance, institutional strengthening, training, and information in 147 developing countries (referred to as “Article 5 countries” under the Protocol). Since its inception, the Fund has provided a total of $3.6 billion in financing, eliminating over 488,909 metric tons of ozone-depleting substances through 7,000 projects

In the current phase, the activities of the Multilateral Fund are focused on financing the timeline for the reduction and elimination of hydrochlorofluorocarbons (HCFCs) as governed by the Montreal Protocol. It should also be noted that, based on the amendment to the Montreal Protocol approved in Kigali in October 2016, efforts are underway to include hydrofluorocarbons (HFCs) among the substances subject to phased reduction. Although HFCs do not harm the ozone layer, they have a high global warming potential.

Projects seeking funding from the Multilateral Fund must align with the “Programme for the Elimination of Ozone-Depleting Substances,” which each developing country is required to prepare to qualify for funding. Projects are submitted by the country itself, with support from implementing agencies. If the projects meet the current guidelines and procedures, they are forwarded to the Executive Committee for approval. The implementation of the projects, from inception to completion, is the responsibility of the agencies.

 It should be noted that the Fund only covers the incremental costs of a project, as determined by the Committee’s rules for each application sector. These costs represent “the additional cost of a conversion related to environmental performance”: essentially, the extra costs associated with choosing one technology over another for its superior environmental characteristics.

Italian companies that excel in innovative environmental technologies replacing HCFCs used in the foam, refrigeration and air conditioning, heat pump, and solvent sectors can internationalize their know-how by becoming suppliers to the United Nations implementation agencies.

The agencies that implement the industrial reconversion projects approved by the Board of Directors of the Multilateral Fund publish the projects they need to carry out and the technical components required to replace ozone-depleting technologies on their websites. Therefore, for Italian companies or other interested entities looking to participate in tenders related to projects financed by the Multilateral Ozone Fund under the Montreal Protocol, it is advisable to monitor the dedicated project and tender portals on the websites of the following international organizations: United Nations Development Programme (UNDP); United Nations Industrial Development Organization (UNIDO); World Bank (using keywords like “HCFC”, “HPMP”, “Montreal”); and United Nations Environment Programme (UNEP).

According to Annex IX, point C.9, of Decision IV/18 from the Fourth Meeting of the Parties to the Montreal Protocol, each donor country may allocate up to 20% of its annual mandatory contribution to bilateral cooperation, provided that such cooperation activities are strictly related to the implementation of the Montreal Protocol's provisions and comply with the criteria for eligible incremental costs defined by the Executive Committee of the Fund (ExCom). This provision was implemented into the Italian legal system through Law 409/2000.

Since 2000, Italy has allocated a portion of the 20% share of its annual mandatory contribution to 21 countries, prioritizing sectors deemed to be of particular strategic interest for promoting technological know-how and capacity building on-site, while also leveraging Italian experience and excellence. From a technical perspective, these projects form specific sectoral components of the multi-year programs presented by developing countries for the elimination of ozone-depleting substances, supported by the implementation agencies accredited to the Multilateral Fund, namely UNIDO, UNDP, the World Bank, and UNEP. The projects, regarding the component financed by Italy, are defined through agreements between Italy (MATTM) and the implementation agencies (particularly UNIDO and UNDP) that focus on technology transfer opportunities to enhance the capabilities of the 'Italian System.' International calls and notices are then published and managed directly by the implementation agencies.

Currently, projects are underway with: Ghana, Mexico, Brazil, China, Iran, Argentina, Maldives, Rwanda, Lesotho, Tunisia, Nigeria.

In most cases, these are countries with which the MATTM has also signed bilateral collaboration agreements for the implementation of projects to combat and adapt to climate change.