Environmental conservation project to reduce and phase out ozone-depleting

Government Savings Bank was part of the environmental conservation project to reduce and phase out ozone-depleting substances in Thailand according to the Cabinet resolution on October 7, 2003. GSB acted as a financial agent for this project to help relevant entrepreneurs reduce and phase out ozone-depleting substances causing global warming. An environmental conservation project unit was set up to manage a grant fund from the Ozone Projects Trust Fund (OTF) according to the Montreal Protocol on substances that deplete the ozone layer enforcing the phase-out of the production and consumption of ozone depleting substances and to participate in the campaign and raise awareness among the public to realize the importance of the ozone layer.

After successfully completing the operation for the chlorofluorocarbon (CFCs) sector consisting of both refrigerants used in automotive air conditioning systems, refrigerators, freezers, metal parts cleaners, electronic circuit board and propellants used in aerosol products, GSB was assigned by the Ministry of Finance to collaborate with the Department of Agriculture to provide financial support for entrepreneurs who use methyl bromide, another type of substance depleting the ozone layer, to switch to use phosphine in fumigating agricultural products instead as it was environmentally friendly and the depletion of the ozone layer was lower than of the methyl bromide. The project ended on December 31, 2013.

Subsequently, the Ministry of Finance assigned GSB to serve as a financial agent for the Stage I Hydrochlorofluorocarbon Phase Out Project, with a total grant fund of USD 16.85 million during 2013-2018 (6 years) according to the agreement between the World Bank and the Thai government to help entrepreneurs in the air conditioning industry and the foam production industry to modify equipment and phase out HCFCs in the production process by switching to alternative substances that did not deplete the ozone layer and had no adverse impact on the global climate. The project was successfully completed within the specified timeframe on December 31, 2018.

In 2019, the World Bank would like GSB to continue as a financial agent for the Stage II Hydrochlorofluorocarbon (HCFC) Phase Out Project to ensure continuity of the project’s operations. The World Bank submitted a request to the Public Debt Management Office to issue a letter to GSB to request for official cooperation for the project’s implementation. At the GSB Board of Directors’ meeting No. 6/2019 on June 18, 2019, the Board approved GSB to continue as a financial agent for the Stage II HCFC Phase Out Project.

Stage II project provides financial aid for the replacement of equipment and chemicals used in the spray foam and commercial refrigeration sector. The grant fund was USD 5.08 million (Including parts of the Department of Industrial Works and Government Savings Bank). The project starts from 2019 – 2023 (5 years), with a credit limit to help entrepreneurs of USD 1.92 million or approximately 57.48 million baht. Under this project, entrepreneurs will receive financial and technical assistance to switch their production processes to alternative technologies that do not deplete the ozone layer.

1. Commercial refrigeration
   There was one entrepreneur participating in the project, namely Patana Intercool Co., Ltd., with a total grant fund of USD 183,514. The company has already changed the production technology from HFC-134a refrigerant to propane (R-290), purchased tools/equipment, designed the R-290 refrigerant charging point and installed safety system. At present, the Bank has already prepared a sub-project completion report and disbursed funds to the Company totaling USD 183,514 according to sub-project grant agreement. Upon completion of the project, the Company was able to reduce the global warming potential (GWP) by 7,444.58 tCO2e (tons of carbon dioxide).
2. Spray foam
   It involves changing a chemical used in spray foam production from HCFC-141b, which will be banned from imports in 2023, to be HFO or water-based formulation. The Department of Industrial Works together with chemical suppliers (System house) will organize a workshop to provide knowledge, safety training and invite spray foam industrial entrepreneurs to join the project. According to the survey of the Department of Industrial Works, there are 6 individual entrepreneurs and 40 small entrepreneurs in the spray foam industry. Currently, there are 2 entrepreneurs who are interested in participating in the project.

Entrepreneurs interested in participating in the project must submit proposals for sub-projects (Proposal) and management plans for existing equipment/tools (Disposal Plan), including Environmental Management Plan (EMP) to the Department of Industrial Works for consideration, review, and confirmation of the eligibility for financial assistance. Afterward, the Bank will prepare an appraisal report for sub-projects (Appraisal Report), contracts as well as disbursement of grant funds to entrepreneurs throughout the project implementation period.

Therefore, this project is highly beneficial to the community and environment. It promotes community participation and raises awareness among the public to realize the importance of the ozone layer and help reduce global warming which aligns with the Bank’s policy to support the society under its role as a Social Bank.