Get documents about "PROJECT COVER SHEET - Download as DOC
Document Sample
PROJECT COVER SHEET
COUNTRY: Kazakhstan IMPLEMENTING AGENCY: UNDP
PROJECT TITLE: Terminal Umbrella Project - Conversion from CFC-11 to Water-based Technology in the
Manufacture of Rigid Polyurethane Foam for thermal insulation in Kazakhstan
SECTOR : Foam
SUB-SECTOR : Rigid Foam
ODS USE IN SECTOR (1998) : 150 ODP tons
ODS USE AT ENTERPRISES (1998) : 104.9 ODP tons
PROJECT IMPACT (ODP to be eliminated) : 104.9 ODP tons
PROJECT DURATION : 3 years
TOTAL PROJECT COST IMP Customers
Incremental Capital Cost : US $ 225,000 950,000
Contingency (10% of net ICC) : US $ 22,500 94,125
Incremental Operating Cost : US $ N/A. 416,079
Total Project Cost : US $ 247,500 1,460,204
LOCAL OWNERSHIP : 100 %
EXPORT COMPONENT :0%
REQUESTED GRANT : US $247,500 (IMP) and $821,365 (customers)
GRANT-EFFECTIVENESS : US $ 7.83/kg ODP/y *
AGENCY SUPPORT COSTS : US$ 85,509
TOTAL COST TO GEF : US$ 1,154,374
STATUS COUNTERPART FUNDING : Letters of Commitment pending
MONITORING MILESTONES : Included in document
NATIONAL COORDINATING AGENCY : National Ecology Center for Sustainable Development of the
Republic of Kazakhstan, Ministry of Environment
PROJECT SUMMARY
IMP, a Kazakhstan polyurethane systems house, will convert its systems to CFC-free systems along with fourteen (14) of
its customers. These enterprises used 104.9 t CFC-11 in 1998 to manufacture rigid foam for insulation applications. The
production is to be converted to a ―permanent technology‖—water based formulations. The enterprises will replace
existing low- pressure dispensers by high-pressure ones (29 dispensers = $740,000) and coating applicators for each
dispenser ($210,000). IMP will install storage/transfer systems ($60,000) and blending equipment ($60,000) as well as
testing equipment ($10,000). Other costs include trials ($10,000) and technology transfer to IMP ($20,000) and to the
sprayfoam contractors ($45,000). Incremental operating costs of $416,079 will be incurred, but are not eligible under GEF.
Prepared by: Mary Courtney/Bert Veenendaal Date: August - December 1999
Reviewed by: Dr. Hubert Creyf Date: December 24, 1999
* As per established MLF policy, the Cost Effectiveness applies only to the customers, not to the systems supplier.
Original/18 December 1999
PROJECT OF THE GOVERNMENT OF KAZAKHSTAN
TERMINAL UMBRELLA PROJECT - CONVERSION FROM CFC-11
TO WATER- BASED TECHNOLOGY IN THE MANUFACTURE OF
RIGID POLYURETHANE FOAM FOR THERMAL INSULATION IN KAZAKHSTAN
1. PROJECT OBJECTIVE
The objective of this project is (i) to phase out the use of CFCs in the manufacture of polyurethane foam
for thermal insulation in Kazakhstan and (ii) to make the necessary technology employed and systems
needed, locally commercially available to affordable prices.
2. SECTOR BACKGROUND
GENERAL
Kazakhstan ratified the Montreal Protocol 26 August 1998 and became a Party on 24 November 1998.
The preparation of a Country Program to ensure the fulfillment of its obligations as a Party to the Vienna
Convention and to the Montreal Protocol, is practically finalized. The program will conform with the
requirements for technical assistance and funding from the Global Environmental Facility (GEF).
Currently Kazakhstan consumes about 1305 ODP t/y of ozone depleting substances. The foam sector
accounts for 150 t/y (11.5 %). From this about 105 t (70 %) is used for thermal insulation and 45 t (30 %)
for comfort applications. The dominant thermal application is the use of rigid PU spray foam. Here is
lesser use in the manufacture of simple commercial refrigeration appliances. The dominant comfort
application is the use of flexible PU slabstock foam in the manufacture of furniture and bedding.
The Government of Kazakhstan is considering several measures to comply with its obligations under the
Montreal Protocol phase-out schedule, such as:
Import restrictions
Collection of more accurate information on ODS use—the current information is incomplete
An incentive and disincentive policy to encouraging the use of ODS-free technologies. The
preparation of technical support and investment programs with GEF funding is considered
one most effective incentives.
FOAMS FOR THERMAL INSULATION APPLICATIONS
As mentioned, the dominant use of foams for thermal insulation is in spray foam applications with lesser
use in the manufacture of simple commercial refrigeration appliances such as display cabinets. Recently,
the production of laminated foam panels for cold storage has also been considered—an application that
was so far addressed through the insulation of existing storage facilities through spray foam.
Most of the spray foam is used for pipe insulation, due to the large oil industry, the emphasis on central
heating systems and the ambient temperature extremes in different seasons.
Based on a lack of technical proficiency and ability to invest, the equipment used is most often low-priced
spray foam equipment (Russian or self made) and based on imported systems (Russia, Germany).
RPF – Final 2 215 12/24/99
Recently, an agreement with Russia has been signed that will not allow the export of systems and
equipment containing, or made for the purpose of processing, CFCs. This may promote increased use of
CFC-free—mostly HCFC-141b based—systems but could also lead to the import of CFCs or CFC-
containing systems from India or China. It will certainly not lead to the use of non-ODP systems, as these
are much higher in costs. The manufacture of local systems from imported (Russia, China, India,
Germany) base-chemicals could mitigate this price penalty and is therefore seen as crucial in a complete
elimination of ODS in the foam sector.
3. PARTICIPATING ENTERPRISES BACKGROUND
3.1 IMP
IMP (Insulation Materials Production Inc.) is a 100% Kazakhstan owned enterprise. The principal
business activities of the enterprise include:
Manufacture/sales of PU systems for spray foam and pour-in-place (PIP) applications
Manufacture/sales of PU pipe coating systems
The company is also developing a production of panels and rigid/flexible/block foam. As this business
segment is not contributing to the current baseline production, it has not been included in the investment
part of the project. Technical support to assure that these systems will operate on non-ODS technologies
is, however, foreseen. The systems manufacturing business is operational and intends as the only facility
in Kazakhstan to develop CFC-free systems. Note that currently, CFC-free systems are available only
through import, are very expensive and virtually completely based on HCFC-141b. IMP policy is to
develop water-based systems at cost-effective prices.
Systems use for 1999 included 20 t CFC-11 purchased to mix with systems and 10 t of imported systems
containing about 2 t CFC-11.
3.2 SPRAY/PIP FOAM MANUFACTURERS
There are fourteen rigid foam manufacturers participating in the project. Except one, they all produce
spray foam. Background information on each company is presented in the following table. Information
on baseline equipment and chemical consumption is presented in Annex 1. All participants are 100%
Kazakhstan owned and are either founded before 1995, or have evolved from a predecessor company
established prior to 1995.
COMPANY FOUNDED EMPLOYEES PRODUCTS
AIDMAR 1982 as the trust 4 Roof, pipe and general
Almatyingstroy‖. construction insulation
Privatized 1996
ALMATA ENG & CONSTR 1982 as the trust ―Alma- 9 Pipe insulation
Ataingstroi‖. Privatized 1998
ALMATYINGSTROY 1982 as the trust ―Alma- 25 Pipe insulation for power plants
tyingstroi‖. Privatized 1995
ALMAZ February 1995 8 Inside insulation of buildings for
cold storage, roof/pipe insulation
CHIMSTROL 1959 as the trust 85 General construction, pipe
―Chemkenstroi‖. Privatized in Installation/insulation
1992; Limited Partnership (LP)
RPF – Final 2 315 12/24/99
in 1998
CHOLODINVEST 1992 16 Spray foam contractor
GLOBUS 1993 2 Spray foam contractor
LIK CORPORATION 1991 150 Pipe insulation, manufacture of
refrigerated display cabinets
MONTAZHNIK 1972 as the trust 300 Construction, central heating
―Montagselstroi‖ Systems and contract
Privatized in 1993. Maintenance – spray foam
OLIMP May 1995 5 Spray foam contractor
SHEBER 1992 8 Pipe insulation
SIM January 1995 8 Largest spray foam contractor in
Kazakhstan
SPRETSREMONT 1986 as the trust ―Spetsremont‖. 55 Spray foam contractor and
Privatized 1996 general repair shop for industrial
activities
TRADEMARKET 1993 5 Spray foam contractor
The founding dates indicated in the table show the establishment of the predecessor government-run
organizations, as well as the dates of privatization for those enterprises, which are successors of
previously state-owned (―trust‖) enterprises.
4. PROJECT DESCRIPTION
This project will eliminate the use of CFCs in the manufacture of polyurethane foam at fourteen foam
manufacturers (See Annex-1) with the support of their local systems supplier, IMP. The average annual
use per participating manufacturer is less than 10 t. It has been shown in projects in other countries that
small enterprises are most cost-effectively addressed as part of a group project, centered on their systems
supplier, who provides technology transfer for the individual enterprises. The main reasons that an
umbrella approach involving a local system house will be more cost-effective are as follows:
Support by international technology providers would incur larger costs for fees and travel;
International technology providers may incur language and cultural challenges;
PU systems are currently mostly imported in Kazakhstan. Conversion to a non-ODS system
would cause a large increase in operating costs, which are not covered under GEF policy. In such
a case, most enterprises would elect to convert initially to the most economic option available,
HCFC-141b. However, GEF strongly discourages the use of interim technologies. Local
production of non-ODS systems would significantly reduce the costs and make their use feasible;
A local system house is in itself eligible for technical and financial assistance to phase-out the use
of CFCs but may hesitate as long as it does not have information when and how its customers will
convert. By tying this to the conversion of its customers, such support can be provided much
more effective.
Therefore, inclusion of a local systems supplier is an essential part of the success of this project.
IMP:
IMP will develop, with the assistance of a UNDP/UNOPS Process Expert, water based formulations for
its rigid foam application customers, and will, after successful conversion, offer only CFC-free
formulations. IMP-related investments include additional storage and premixing facilities. In addition, a
K-value tester to measure insulation properties in-situ is foreseen, so that the required thickness of the
RPF – Final 2 415 12/24/99
product can be determined. The project also includes costs for trials and technology transfer for IMP as
well as (by IMP) to the local spray foam manufacturers.
Enterprises:
Existing equipment has been identified for participating enterprises. All of the participating enterprises
have currently low-pressure, self-made or low-priced Russian, equipment. The low-pressure dispensers
are proposed to be replaced by high-pressure dispensers in order to maintain insulation values to the
extent possible. In order to maintain reasonable aging properties of the finished product, one-component
spray coating equipment will be used to coat the finished spray foam. A breakdown of budget per
enterprise is included in Annex-2 and Annex-4, Table D. Participating enterprises will be provided with
a letter of commitment that has to be signed to assure eligibility in the program (ref. Annex-5).
Replacement equipment will be purchased as part of a combined procurement effort to assure the lowest
possible prices. After completion of equipment installation, technicians will return to conduct production
trials. After a phase in time (approx. 3 months) during which the enterprises can deplete CFC inventories
and destroy replaced equipment, certification visits will be arranged.
Incremental operating costs related to higher systems costs will be incurred. An estimate of these
increased costs is provided in Annex-3 (general) and Annex-4D (individual), although it should be noted
that no funding is requested to cover incremental operating expenses.
5. TECHNOLOGY OVERVIEW AND SELECTION
5.1 OVERVIEW
ODS phaseout technologies for rigid PU foams in thermal insulation applications are:
CLASSIFICATION LIQUID TECHNOLOGY GAS TECHNOLOGY
LOW ODP TECHNOLOGIES HCFC-141b HCFC-22
(―INTERIM‖) HCFC-141b/HCFC-22
NON-ODS TECHNOLOGIES (CYCLO)PENTANE, WATER, HFC-134a
(―PERMANENT‖) LIQUID HFCs (-365,-245fa)
The selection of the alternative technology is governed by the following considerations:
a) Proven application and reasonable maturity of the technology
b) Cost effective conversion, in view of one-time as well as recurrent costs
c) Local availability of the substitute, at acceptable pricing
d) Support from the local systems suppliers
e) Critical properties to be maintained in the end product
f) Meeting established standards on environment and safety
HCFC-141b has an ODP of 0.11. Its application is proven, mature, relatively cost-effective and systems
that fit the enterprise’s applications are locally available. HCFC-141b can, however, be destabilizing in
higher concentrations, being a strong solvent, which would lead to the need to increase the foam density.
As an interim option, its application is discouraged under GEF policy.
RPF – Final 2 515 12/24/99
HCFC-22 has an ODP of 0.05 and is under ambient conditions a gas. It is not suitable for spray foam
applications. As an interim option, its use is discouraged under GEF policy.
HCFC-141b/HCFC-22 blends can reduce the solvent effect of HCFC-141b alone and therefore allow
lower densities while maintaining acceptable insulation values. The blends are, however, not available in
Kazakhstan or neighboring countries. On-site multi-component blending would significantly increase the
one-time project costs. In addition, the technology is not proven for spray foam applications. Being an
interim option, the same restrictions as for HCFC-141b would apply.
HYDROCARBONS are a preferred solution only when feasible from a safety and cost effectiveness
standpoint. The relatively high investments for safety costs tend to limit pentane use to relatively large
CFC users, which makes the option not applicable for this group project. In addition, the use of pentane
is limited to those enterprises whose facilities can be adapted to meet safety requirements, and can be
relied on to maintain safe operations. The use of hydrocarbons in spray foam applications is not suitable.
WATER-BASED systems are more expensive (up to 50%) than other CFC-free technologies due to
reductions in insulation value (requiring larger thickness) and lower cell stability (requiring higher
densities). Water-based formulations tend to be most applicable in relatively less critical applications,
such as in-situ foams and thermoware. Water based formulations are currently only available by
importation, resulting in high operational costs.
LIQUID HFCs do not currently meet requirements on maturity and availability. Trials show that systems
based on these permanent options would be feasible in spray foam applications.
HFC-134a is under ambient conditions a gas. It is not offered in the applicable regional area as a
premixed system and would require an on-site premixer. It is not proven for spray foam applications. It is
also less energy efficient, and expensive compared to most other technologies.
5.2 SELECTION
Based on the above discussion, the use of water based systems is the only currently feasible, permanent
option for the rigid foam applications (thermal) that can be recommended. The system house as well as
the foam-manufacturers did accept this selection.
5.3 IMPACT ON PRODUCTION PROCESS
IMP:
Additional storage tanks and transfer systems, as well as blending equipment and related transfer systems will
be necessary. IMP will also require testing equipment in order to assist its customers in converting to the new
technologies while maintaining to the extent possible the product performance.
Enterprises:
In water blown foams, increased polyol viscosity poses a mixing problem with the current low-pressure
air operated mixing heads. High-pressure dispensing equipment will be required to accommodate this
change. High-pressure equipment will also result in smaller cell structure, thus helping to maintain the
insulating properties of the products to the extent possible. Ratios between material components (polyol,
isocyanate) will change, necessitating a change in fixed gear ratio, or preferably a switch to variable ratio
dispensing equipment. Changes in reactivity and system viscosity will alter the spraying behavior, and
will require extensive trials to ensure proper processing and finished insulation quality.
RPF – Final 2 615 12/24/99
The CO2 created in the water blown foams has a higher permeability than CFC-11. The foams will have
poor aging properties compared to CFC-11 based foams. The surface of the foam may be covered with
an elastomeric skin, to provide better aging properties to the water blown spray foam. It is proposed
providing one component spray units for each dispenser to spray a one-component elastomeric layer on
the top of the sprayed foam to reduce CO2’s permeability.
The enterprises will experience higher operating expenses, due to the need to apply thicker coatings to
achieve the desired insulating properties. This increases the use of systems, hence, increases the costs.
6.0 PROJECT COSTS
6.1 CALCULATION OF INCREMENTAL CAPITAL COST
The total actual investment costs are US$ 247,500 for IMP and US$ 1,044,125 for the customers. This
includes a 10% contingency on the net incremental capital costs, with an appropriate deduction for lack of
baseline equipment where necessary. Details of incremental capital costs are provided in Annex-2.
Deductions and contingency costs per enterprise are reflected in the Table in Annex 4D.
6.2 CALCULATION OF INCREMENTAL OPERATING COST
Incremental Operating Costs are estimated at US$ 416,079 for the customers included in the project for a
2 year operation (NPV @ 10%). The calculation is explained in Annex-3. These costs are calculated for
illustrative purposes only. They are not eligible for coverage by a grant under GEF guidelines.
6.3 COST EFFECTIVENESS (CE)
Cost-effectiveness for the project is US$ 9.87/kg ODP. This is calculated in Annex-4. The calculation is
based on the eligible costs for the customers (incremental capital costs). The capital costs for the supplier
do not factor in to the cost effectiveness, as it is a supplier of chemical components, not a consumer.
6.4 PROPOSED GEF GRANT
The proposed grant request is for US$ 821,365 for the customers and $247,500 for IMP. The grant is
based on the incremental capital costs and provision for contingencies for the systems supplier, and on the
maximum allowable grant for the enterprises based on total ODP phased out, category threshold and
special allowances for terminal umbrella projects. Individual grants per enterprise are detailed in Annex
4D. For a terminal umbrella project, the allowable cost-effectiveness per enterprise is up to 200% of the
category threshold, although the overall cost effectiveness still must meet the category threshold. The
grant requested for the enterprises is, in this case, limited to the maximum allowable for the ODS phased
out and the category threshold. During implementation, the grant will be apportioned by the implementing
agency in coordination with the enterprises and according to the guidelines of the Fund. The eligible GEF
grant when applying these MLF-based stipulations will therefore be:
Maximum Grant, Customers: US$ 821,365
Capital Costs, IMP: US$ 225,000
Contingency for IMP(10% on ICCs): US$ 22,500
Subtotal: US$ 1,068,865
Executing Agency Fee (8% of subtotal): US$ 85,509
Grant Total: US$ 1,154,374
RPF – Final 2 715 12/24/99
However, MLF would in projects like these allow the use of HCFC-141b and not insist on a non-ODS
technology. It is therefore requested that the GEF consider funding this project at a higher level than the
threshold allows, preferably at the level of the eligible project costs for the enterprises. The project
would have been much less expensive in the event the enterprises had been allowed to convert to an
interim substance (HCFC-141b). Please note also that this conversion, despite all possible cost-mitigation,
will incur significantly higher incremental operating costs, which will be borne by the enterprises
themselves, without reimbursement, per GEF rules. If consideration would be given allowing funding of
all eligible capital costs for the enterprises, this would mean US$ 1,044,125, instead of US$ 821,365 in
recognition of the effort to convert to a non-ODS solution.
7. PROJECT IMPLEMENTATION AND MONITORING
UNOPS, on behalf of UNDP, will oversee the implementation of this project and provide technical
support. Implementation is expected as follows:
Activity Quarter
1 2 3 4 5 6 7 8 9 10 11 12 14
GEF Project approval X
Submit Project doc. for signature X
Project document signature X
Equipment specification verification X X
Equipment procurement X X
Installation/retrofitting of equipment X X
Training X X X
Testing and trials X X
Production Start-up X
Phase-In X X X
Project completed X
Completion report X
MILESTONES FOR PROJECT MONITORING
TASK MONTH*
(a) Project document submitted to beneficiary 3
(b) Project document signature 4
(c) Bids prepared and requested 6
(d) Contracts Awarded 12
(e) Equipment Delivered 21
(f) Training Testing and Trial Runs 27
(g) Commissioning 36
(h) Submission of project completion report 42
* as measured from project approval
RPF – Final 2 815 12/24/99
8. PROJECT IMPACT
This project will eliminate the use of 104.9 t ODP at baseline conditions. The project employs
commercially available and environmentally acceptable technology. Annex 6 details any special
environmental requirements.
9. ANNEXES
Annex-1: Enterprise Baseline Data
Annex-2: Calculation of Incremental Capital Costs
Annex-3: Calculation of Incremental Operating Costs
Annex-4: Calculation of Cost Effectiveness
Annex-5: Company Letter of Commitment
Annex-6: Environmental Assessment
Annex-7: Technical Review
RPF – Final 2 915 12/24/99
ANNEX 1
ENTERPRISE BASELINE DATA
COMPANY EQUIPMENT SYSTEM CFC-11 ACTION DISPOSAL PLAN
(t/y) (t/y) PROPOSED
IMP 3 tanks, N/A. N/A. additional N/A.
2 preblenders, testing blending
equipment equipment
AIDMAR Spray LPDs (4) 60 12 Replace 4 Destroy 4
ALMATA ENG & Self-made Spray LPD 20 4 Replace 1 Destroy 1
CONSTR.
ALMATYINGSTRY Spray LPD 20 4 Replace 1 Destroy 1
ALMAZ Spray LPDs (5) 60 12 Replace 4 Destroy 4
(four functioning)
CHIMSTROI Spray LPDs (2) 80 16 Replace 2 Destroy 2
CHOLODINVEST Pena-9M Spray LPDs 90 10.4 Replace 4 Destroy 4
(4)
GLOBUS Pena-9M Spray LPD 12 1.5 Replace 1 Destroy 1
LIK CORP. Spray LPD 10 2 Replace 2 Destroy 1
Hand pour for display
cabinets
MONTAZHNIK Pena-90 Spray LPD 15 3 Replace 1 Destroy 1
(1)
OLIMP Pena-90 Spray LPDs 10 2 Replace 1 Destroy 1
(2)
SHEBER Spray LPDs (2) 20 4 Replace 2 Destroy 2
SIM Kress Spray LPD 150 30 Replace 2 Destroy 2
Vladimir LPD
SPETSREMONT Spray LPDs (2) 10 2 Replace 1 Destroy 1
(one functioning)
TRADEMARKET Pena-90 Spray LPDs 10 2 Replace 1 Destroy 1
(2) (one functioning)
TOTAL 567 104.9
RPF – Final 2 1015 12/24/99
ANNEX 2
CALCULATION OF INCREMENTAL CAPITAL COSTS
IMP: Investment Costs Summary
( Costs in US$)
Item Unit Cost Quantity Sub-total
1
1.1 Blending Equipment, including transfer 60,000 1 60,000
1.2 Storage Tanks, including transfer 1 60,000
1.3 Testing Equipment 10,000
1.4 Civil Works 20,000
2 Training and Technical Assistance
2.1 Trials 10,000
2.2 Technology Transfer & training for IMP 20,000
2.3 Technology transfer to spray foam 45,000
contractors (14)
CAPITAL INVESTMENT COSTS 225,000
RPF – Final 2 1115 12/24/99
Customers: Investment Costs Summary
Customer Item Quantity Cost Total Amount
AIDMAR 7 kg spray HPD 4 25,000 100,000
Skin Applicator 4 7,500 30,000
ALMATY ENG. & 7 kg spray HPD 1 25,000 25,000
CONSTRUCTION Skin Applicator 1 7,500 7,500
ALMATYINGSTROY 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
ALMAZ CO. 7 kg spray HPD 4 25,000 100,000
Skin Applicator 4 7,500 30,000
CHIMSTROI 7 kg spray HPD 4 25,000 100,000
Skin Applicator 4 7,500 30,000
CHOLODINVEST 7 kg spray HPD 4 25,000 100,000
Skin Applicator 4 7,500 30,000
GLOBUS 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
LIK 7 kg spray HPD 1 25,000 25,000
12 kg PIP HPD 1 35,000 35,000
Skin Applicator 1 7,500 7,500
MONTAZHNIK 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
OLIMP 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
SHEBER 7 kg spray HPD 2 25,000 50,000
Skin Applicator 2 7,500 15,000
SIM 12 kg spray HPD 1 30,000 30,000
7 kg spray HPD 1 25,000 25,000
Skin Applicators 2 7,500 15,000
SPRETSREMONT 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
TRADEMARKET 7 kg spray HPD 1 25,000 25,000
Skin Applicator 1 7,500 7,500
TOTAL: 950,000
RPF – Final 2 1215 12/24/99
ANNEX 3
CALCULATION OF INCREMENTAL OPERATING COSTS
Incremental operating costs are calculated based on the increased isocyanate usage when converting to all
water blown foam. The effective replacement ratio is 1 part CFC-11 by 1.5 parts MDI. An increase in
systems usage of 7.5% is used, based on the need for thicker coverage to get similar insulating value. The
systems price is based on actual reformulation and component prices.
Before: 104.9 t CFC-11 @ US$ 2.50 = 262,250
After: 157.35 t MDI @ US$ 2.50 = 393,375
42.52 t additional systems @ US$ 2.54 = 108,001
Incremental Operating Costs/y = 239,126
2 year IOCs (NPV @ 10%) = 416,079
RPF – Final 2 1315 12/24/99
ANNEX 4
ODS CONSUMPTION AND COST EFFECTIVENESS CALCULATION
A. ODS SAVINGS:
Average ODP ODP TONS
Consumption
CFC-11 104.9 MT/y 1.0 ODP/kg 104.9 MT ODP
Total ODP weighted savings 104.9 MT ODP
B. PROJECT COSTS:
IMP Customers TOTAL
Incremental investment costs(ICC) 225,000 950,000 1,175,000
Contingency (10%) 22,500 94,125 116,625
Incremental operation costs (IOC) 0 416,079 416,079
Deductions 0 (8,750) (8,750)
TOTAL 247,500 1,451,454 1,698,954
DEDUCTIONS AMOUNT
Safety Costs 0
Foreign Ownership 0
Exports to non-Article 5 countries 0
Baseline conditions (25% of dispenser cost – LIK) 8,750
Age of baseline equipment 0
C. COST EFFECTIVENESS:
Total eligible incremental project costs: US$ 1,282,875
Threshold for the sector: US$ 7.83/kg ODP
Eligible incremental MF grant: customers US$821,367
IMP 247,500
Cost Effectiveness: (ICC)-deductions/ODP Savings: US$ 9.87/Kg ODP (Customers only)
RPF – Final 2 1415 12/24/99
D. COST-EFFECTIVENESS AND GRANT CALCULATION PER ENTERPRISE
The following table shows the applicable costs and grant effectiveness calculated per enterprise. The following assumptions were used in
calculating the costs:
ICCs: from Annex 2
Contingencies: 10% of net ICC
IOCs: as calculated in Annex 3
Eligible Project Costs: ICC minus Deductions
COMPANY Technology SYSTEM ODP ICC IOC Deductions Total Project Eligible Grant Grant
(t/y) eliminated (1) Costs Project Costs Requested Effectiveness
(t/y) (2)
AIDMAR Water 60 12 143,000 45,988 0 188,988 143,000 143,000 11.92
ALMATA ENG & Water 20 4 35,750 15,329 0 51,079 35,750 35,750 8.94
CONSTRUC
ALMATYINGSTRY Water 20 4 35,750 15,329 0 51,079 35,750 35,750 8.94
ALMAZ Water 60 12 143,000 45,988 0 188,988 143,000 143,000 11.92
CHIMSTROI Water 80 16 143,000 61,318 0 204,318 143,000 143,000 8.94
CHOLODINVEST Water 90 10.4 143,000 52,452 0 195,452 143,000 143,000 13.75
GLOBUS Water 12 1.5 35,750 7,240 0 42,990 35,750 23,490 15.66
LIK CORP. Water 10 2 73,375 7,665 8,750 81,755 64,625 31,320 15.66
MONTANZHNIK Water 15 3 35,750 11,498 0 47,248 35,750 35,750 11.92
OLIMP Water 10 2 35,750 7,665 0 43,415 35,750 31,320 15.66
SHEBER Water 20 4 71,500 15,329 0 86,829 71,500 62,640 15.66
SIM Water 150 30 77,000 114,970 0 191,970 77,000 77,000 2.57
SPETSREMONT Water 10 2 35,750 7,665 0 43,415 35,750 31,320 15.66
TRADEMARKET Water 10 2 35,750 7,665 0 43,415 35,750 31,320 15.66
567 104.9 1,044,125 416,101 8,750 1,460,941 1,035,375 967,660 9.22
(1) Deductions are taken as appropriate for hand mix baseline conditions (25% of the equipment cost).
(2) The grant requested is calculated as the lower of the eligible project costs, or the maximum allowable grant based on ODS phased out times
200% of the category threshold (7.83). Since the project is a terminal umbrella, a threshold of 200% of the usual threshold is applied.
RPF – Final 2 1515 12/24/99
ANNEX 5
COMPANY LETTER OF COMMITMENT
Agreement of Participation in project (fill in project number when known) - Group Project for
Conversion to CFC-free Technology in the Manufacture of Polyurethane Foam
_____(company name)________, represented by _____________________ , hereby confirms
having received a copy of the CFC phaseout project, prepared on its behalf as part of a group
project and on behalf of the government of Kazakhstan by the United Nations Development
Program (UNDP).
____(company name)______________ hereby acknowledges the following:
a) It agrees that the UNDP/UNOPS will implement the project as approved by the Global
Environmental Facility and as described in the project document, for which
_____(company)_____ will be a beneficiary;
b) It accepts the project as proposed in the project document;
c) It will completely phase out the use of CFCs upon project completion;
d) It will use only zero-ODP technologies as stipulated;
e) It will dispose of any equipment that has been replaced under this project in compliance with
the stipulations that have been drawn up in the project document;
f) It will provide funds for items that are included in this project but are specifically excluded
from funding by the Global Environmental Facility (GEF) as well as for items included in the
project and required for a successful completion but that, while eligible, exceed the available
budget and contingencies;
g) It will allow monitoring inspections by the UNDP or designate during project implementation
and thereafter to verify proper implementation and subsequent operation without the use of
CFCs.
………………………….
(date)
……………………………………………………….
(Authorized Signature)
RPF – Final 2 1615 12/24/99
ANNEX 6
ENVIRONMENTAL ASSESSMENT
For the water based foams, the blowing agent is carbon dioxide, which poses a negligible
additional environmental threat. Because the CO2 is from a chemical source, it contributes
(albeit by a negligible amount) to global warming.
There is currently no regulatory action required for this project.
RPF – Final 2 1715 12/24/99
ANNEX 7
TECHNICAL REVIEW
RPF – Final 2 1815 12/24/99
Related docs
