Audit Report of HCFC Phase-Out ODS III Project Grant # TF Ministry of Environment Amman - Jordan for the year ended 31 December 2016

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Public Disclosure Authorized Public Disclosure Authorized Audit Report of HCFC Phase-Out ODS III Project Grant # TF013968

1 Public Disclosure Authorized Public Disclosure Authorized Audit Report of HCFC Phase-Out ODS III Project Grant # TF Ministry of Environment Amman - Jordan for year ended 31 December 2016 Public Disclosure Authorized Public Disclosure Authorized

2 TABLE OF CONTENTS 1. Independent Auditor Report II. IIL Statement of Cash Receipts & Payments Notes to Financial Statement 2

ft To Ministry of Environment HCFC Phase-Out ODS III Project P127702 Amman, Jordan INDEPENDENT AUDITOR REPORT Opinion We have audited accompanying special Purpose project financial statement

3 ft To Ministry of Environment HCFC Phase-Out ODS III Project P Amman, Jordan INDEPENDENT AUDITOR REPORT Opinion We have audited accompanying special Purpose project financial statement comprising of statement of Cash Receipts Payments of HCFC Phase-out ODS III Project P Grant # TFO for year ended 31 December 2016, explanatory notes for period n ended. (a) The general purpose cash receipts project financial payments statement Of Project presents for fairly, year in all ended material to 31 respects, accordance December with International 2016 in Public of Sector accounting Accounting Stards, under cash basis (b) Internal control over financial reporting direct payments involved in reimbursement preparation can of be replenishments, period relied upon to support related withdrawals for (c) The project guidelines was in all material provisions respects governed in compliance by Grant with laws, agreement regulations, Basis for opinion We conducted our audit in accordance with responsibilities International Stards under those on Auditing provisions (ISAs). stards Our responsibilities are furr for audit described of in statement auditor's project section management of our report. We in accordance are independent with of Accountants' International Code Ethics Stards Board ethical of Ethics for Professional Accountants, of responsibilities in accordance with this we code. have We fulfilled believe our that or have obtained is sufficient audit evidence appropriate to provide we a basis for our opinion. Project Management responsibilities Project Management is responsible for preparation for for such fair internal presentation control of as management statement determines is preparation necessary of a to statement enable that error. is free from material misstatement, wher due to fraud or Auditor's responsibilities Our objectives are to obtain reasonable assurance about wher statement is free from material misstatement, wher due to fraud or error, to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error are considered material if, individually or in aggregate, y could reasonably be expected to influence economic decisions of users taken on basis of se documents. As part of an audit in accordance with ISAs, we exercise professional judgment maintain professional skepticism throughout audit. We also:

4 . ~. '~ Identify assess risks of material misstatement, wher due to fraud or error, design perform audit procedures responsive to those risks, obtain audit evidence that is sufficient appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or override of internal control. 2. Obtain an understing of internal control relevant to audit in order to design audit procedures that are appropriate in circumstances, but not for purpose of expressing an opinion on effectiveness of organization's internal control. 3. Evaluate appropriateness of accounting policies used reasonableness of accounting estimates related disclosures made by management. 4. Evaluate overall presentation, structure contest of project financial statements including disclosures, wher financial statements represent underlying transactions events in a manner that achieves fair presentation, 5. Obtain sufficient appropriate audit evidence regarding financial information of project activities within project to express an opinion on financial statements. We are responsible for direction, supervision performance of project audit. We remain solely responsible for our audit opinion. We communicate with project management regarding, among or matters, planned scope timing of audit significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Or matter: This report is intended solely for information use of World Bank, Government of Jordan, Ministry of Environment related project management. Mohammad Qazzaz License # Mar h 2017

5 HYDROCHLOROFLUOROCARBON (HCFC) PHASE - OUT project (ODS III) WB Grant P Statement of Cash Receipts & Payments for year ended 31 December 2016 amounts in USD Year Dec 2016 Financine 2016 Cumulative initial Deposit Transferred from WB 300,000 WB to Designated Account (Replenishments) 435, ,767 Direct Transfers from WB to Contractors Total Financing 435, ,767 Expenditures Category (1) Sub-grant to Beneficiary Enterprises 288, ,520 Category (2) Consultants Services, Training, Goods Incremental Operating Cost under Component 2 of projects 93, ,130 Category (3) Consultants Services, Training, Goods Incremental Operating Cost Recurrent Cost under Component 3 of projects 75, ,127 Total Expenditures 457, ,777 Net Fund (Surplus/Deficit) 90,990 * The attached disclosures are integral part of this statement

HCFC Phase-Out ODS III Project Grant # TF013968 Ministry of Environment Amman - Jordan Notes to Financial Statements 31 December 2016.

6 HCFC Phase-Out ODS III Project Grant # TF Ministry of Environment Amman - Jordan Notes to Financial Statements 31 December General Background Grant Amount: USD 2,783,149 reduced to USD 1,422,299 effective June 2016 Agreement Date: 20 May 2013 The Hashemite Kingdom of Jordan ratified Montreal Protocol on Substances that Deplete Ozone Layer both its London Copenhagen Amendments. Jordan also ratified Montreal Beijing Amendments. The National Ozone Unite (NOU) in Ministry of Environment (MoEnv) has been empowered to monitor implementation of ozone depleting substances (ODS) phase-out activities in Jordan in order to fulfill obligations under Montreal Protocol. The meeting of parties in 2007 decides to phase-out (HCFCs) as follow: 1. Freezing consumption in 2013 according base line consumption in ( ). 2. Redacting 10% in 2015 according baseline. 3. Redacting 35% in 2020 according baseline. 4. Redacting 67.5% in 2025 according baseline. 5. Redacting 97.5% in 2030 according baseline. 6. Redacting 100% in In November 2011, Multilateral Fund for Implementation of Montreal Protocol (MLF) approved Jordan's HCFC Phase-out Management Plan (HPMP), which constructs a detailed picture of HCFC consumption uses by substance product, presents patterns of growth identifies priority sectors for receiving MLF funding achieving its first reductions. HCFC consumption in Jordan is made up of primarily HCFC-141b HCFC-22 for manufacturing in foam refrigeration air-conditioning (RAC) sectors, respectively, as well as HCFC-22 for servicing installed refrigeration air-conditioning equipment. The HPMP assumed an average HCFC growth rate of 15%. Using historical consumption figures for each major sector (foam RAC manufacturing, servicing) however, variations were seen with growth rate for HCFC-22-based manufacturing of AC units coming out in front at an estimated 28%. Of total HCFC-22 consumed in 2010, 25 tons, or 43%, went to AC manufacturing alone. Industrial trends in Jordan neighboring countries confirm growing dem for air-conditioning with two new enterprises starting operations in , enlarging sector to six HCFC-based manufacturers. The Bank has been engaged with Jordan on Montreal Protocol implementation since early 1990s. The first Jordan ODS Phase-out Project (P005238) saw creation of institutional regulatory framework for implementing Protocol as well as implementation of first investment activities targeted at reducing CFC consumption. The ODS Phase-out II Project (P049706) continued in same vein through support for enhancing institutional 6

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8 As for reporting of this grant project management reports project operations in accordance with International Public Sector Accounting Stards, under cash basis of accounting. Translation of currencies, Functional currency for project operations is Jordanian Dinars (JOD) translated into United States Dollars (USD) at prevailing exchange rate of USD I = JOD.708, maintains accounts in USD. The project also reports all transactions in USD. 3. Designated Account Ministry of Environment opened a bank account (3193/3660/1) designated account with Central Bank of Jordan. in USD as a project Initial Deposi : Initial Deposit from World Bank of USD 300,000 was transferred to Designated Account in February 2014 Disb nements: Disbursements made from Designated Account during period are illustrated below in USD: Beginning Balance Add: 112,950 World Bank Replenishment Deduct: 435,127 Payments for Expenditures (457,087) Ending Balance 90, Uses of grant funds per part (component) in USD: Cumulative Available Fund Component Budget Balance Invest. in HCFC-22 Consui-nption Reduction Component2 524, , ,480 Tech. Assist. policies AC Sector plan Mgt. 100, , ,170 Component 3 Institutional Strengning 278, , ,872 Total Expenditures 902,777 1,422, ,522 8

9 5. Contract Listing fohoe Stableo n sine The USD: Staso f gne act cntracts under grant as of 31 December 2016 is illustrated in 9

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FOR THE YEAR ENDED 31 DECEMBER 2017

FOR THE YEAR ENDED 31 DECEMBER 2017 Public Disclosure Authorized Public Disclosure Authorized AGRICULTURAL COMPETITIVENESS IMPROVEMENT PROJECT INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD) LOAN No. 8286-AZ REPORT OF INDEPENDENT