The Montreal Protocol multilateral fund is considering a proposal to extend concessional finance to industries for the phasing out of consumption and production of ozone depleting substances (ODSs).
This assistance would be in addition to the grant-in-aid provided by the Fund for the purpose.
Under the Montreal Protocol, CFC ( chlorofluorocarbon) and other ozone depleting substances are required to be replaced by non-ozone depleting substances within a fixed time-frame.
The Fund has so far provided only grants to industries for the purpose.
The proposal to provide concessional loans, in addition to grants, to industries has been proposed by the developed countries, who feel that the grant assistance is too meagre to fully meet industries' fund requirement.
They fear that funds constraints may delay the ODS phaseout programme, further accentuating global warming dangers. So they want to open up an additional channel of assistance from the Montreal fund through a scheme of concessional finance.
The proposal was discussed at the 25the executive committee meeting of the Fund, which concluded in Montreal at the end of July.
According to sources, India and some other developing countries voiced opposition to the proposal.
They pointed out that the proposed concessional loan would add to the existing foreign loan burdens of the developing countries and make them more vulnerable to an external debt trap.
But the developed countries are going ahead with the proposal.
They even asked the World Bank to carry out a study on the subject.
The World Bank, in turn, asked IFC to do the job.
The IFC report was taken up for discussion at the meeting of the 25th executive committee, the highest decision making body of the Montreal Protocol multilateral fund for such matters.
No decision was, however, arrived at. The developed and developing countries are evenly represented in the 14-member executive committee.
This is one of the main reason obstructing an easy decision in the matter, as there is clash of interests of the developing and the developed countries. The issue is expected to be taken up at the next quarterly meeting of the Fund executive committee in November.