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The Multilateral Fund for the Implementation of the Montreal Protocol provides funds to help developing countries comply with their obligations under the Protocol to phase out the use of ozone-depleting substances (ODS) at an agreed schedule. ODS are used in refrigeration, foam extrusion, industrial cleaning, fire extinguishing and fumigation. Countries eligible for this assistance are those with an annual per capita consumption of ODS of less than 0.3 kg a year, as defined in Article 5 of the Protocol. They are referred to as Article 5 countries.
The Montreal Protocol was agreed in 1987 after scientists showed that certain man-made substances were contributing to the depletion of the Earth's ozone layer, which protects life below from damaging ultraviolet radiation. The Multilateral Fund was established by the London Amendment to the Protocol in 1990.
The phase-out of ODS will enable the ozone layer to repair itself.
The Fund was the first financial mechanism to be borne from an international treaty. It embodies the principle agreed at the United Nations Conference on Environment and Development in 1992 that countries have a common but differentiated responsibility to protect and manage the global commons.
In 1986, industrialized countries consumed 86 per cent of the most important ODS, the chlorofluorocarbons (CFCs). They agreed to contribute to the Fund in order to help Article 5 countries achieve the Protocol's goals. Article 5 countries committed themselves to joining the global effort to restore the depleted ozone layer. This global consensus forms the basis of the operation of the Multilateral Fund that confines the liability of the Fund to costs essential to the elimination of the use and production of ODSs. An important aspect of the Fund is that it funds only the additional (the so-called 'incremental') costs incurred in converting to non-ODS technologies.
The Fund is managed by an Executive Committee with an equal representation of seven industrialized and seven Article 5 countries, which are elected annually by a Meeting of the Parties. The Committee reports annually to the Meeting of the Parties on its operations.
Financial and technical assistance is provided in the form of grants or concessional loans and is delivered primarily through four 'implementing agencies':
- United Nation Environment Programme (UNEP)
- United Nations Development Programme (UNDP)
- United Nations Industrial Development Organization (UNIDO)
- World Bank
Up to 20 per cent of the contributions of contributing Parties can also be delivered through their bilateral agencies in the form of eligible projects and activities.
The Fund is replenished on a three-year basis by the donors. Pledges amount to US$ 2.1 billion over the period 1991 to 2005. Funds are used, for example, to finance the conversion of existing manufacturing processes, train personnel, pay royalties and patent rights on new technologies, and establish national Ozone Offices
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