ARCTIC COUNCIL
PROJECT SUPPORT INSTRUMENT
Patrick Huber, representing the Chair of the PSI
Magnus Rystedt, Vice Chair PSI representing the PSI Fund Manager
5 October 2016
Portland, ME, USA
PURPOSE OF THE PSI
The Project Support Instrument (PSI) is a financing instrument for the purpose of mobilising and
channelling financing for prioritised Arctic Council projects responding to the Declaration of the Fourth Ministerial meeting of the Arctic Council in Reykjavik 2004, that, inter alia, “Emphasized the need for
reinforcing efforts to finance circumpolar cooperation, supported the Project Support
Instrument (PSI) concept as a mechanism to enhance
the process of identifying, mobilizing and transferring
financing for specific priority Arctic Council projects…”
MANDATE FOR FUNDING MECHANISM
Fourth Ministerial Declaration, Reykjavik 2004
The PSI is to “focus on actions against pollution in the Arctic. The instrument is a voluntary, non-exclusive
mechanism for financing specific priority projects that
have already been approved by the Arctic Council. The PSI may make use of a broad range of funding
arrangements to include grants and revolving instruments.”
• Request SAOs establish pilot phase of the PSI
• Requests SAOs to develop PSI Guidelines
• Arctic Council Member States expected to provide most of the funding for the PSI
• Contributions can also be accepted from domestic
and international banks, IFIs, private foundations and
private enterprises
ESTABLISHMENT OF THE PSI
April 2005 PSI established by SAOs at Yakutsk, RF with a target capitalization of 3 million Euro and a 3- year time horizon
May 2005 Ministers appoint NEFCO as the Fund Manager (FM) for the PSI
Aug. 2005 FM makes first call for contributions to the PSI
2005 – 2008 FM develops Rules of Procedures, PSI Guidelines and Contributor Agreement Nov. 2008 SAOs adopt PSI governance documents 2009 – 2011 PSI Contributors achieve agreement on
conditions for the PSI
PSI BECOMES OPERATIONAL
2009 – 2011 Iceland, Finland, Norway, Sweden, and Sami Parliament contribute to and join the PSI
Oct. 2011 FM concludes the Agreement with Russia June 2012 United States joins the PSI
2012-2014 PSI conducts series of preparatory PSI Committee (PCOM) meetings
July 2014 With contribution from Russia, PSI goes operational with 5-year pilot period
Sept. 2014 First PSI projects approved
April 2015 First PSI black carbon mitigation
project installation was completed (Tundra
Agricultural Cooperative)
TUNDRA AGRICULTURAL COOPERATIVE
KARELIA CLUSTER
PSI PROJECT SELECTION CRITERIA
Project has been approved by the Arctic Council
Project will lead to concrete actions toward pollution prevention, abatement, and elimination with measurable positive effects on the environment of the Arctic
Potential for replication and scale
Potential of the recipient to implement the project according to plan
Potential of the PSI to leverage other funding
Risk Assessment
Availability of local approval(s )
Further details in the PSI Manual online
P S I
G O V E R N A N C E S T R U C T U R E
PSI COMMITTEE
UNITED STATES – CHAIR FINLAND – VICE-CHAIR
ICELAND NORWAY NEFCO
RUSSIAN FEDERATION SAMI PARLIAMENT
SWEDEN
N E F C O B O A R D C o n t r i b u t o rs t o t h e P S I :
Sign agreement and provide funding
Contribution confirms PCOM membership
PCOM approves, maintains project oversight
Supported by NEFCO as Fund Manager
A R C T I C C O U N C I L W O R K I N G
G R O U P S N E F C O
F M
S A O s
PSI ALLOCATIONS (TENTATIVE) 2014-2019 WORK PLANS
Arctic Council Project Areas Percent of funds Hazardous Waste & pollution
prevention 40
Mercury mitigation demonstration 25 Clean Production, Energy Efficiency,
SLCP, BC 20
Other areas 6
Standard Costs (overhead, etc) 9
CURRENT PSI CONTRIBUTIONS
No Contributor Deposits EUR Comment
1 Finland 200 000.00 Received
2 Iceland 8 298.76 Received ICEK 1M
3 Norway 237 729.27 Received
4 Russian Federation 10 000 000.00 Received
5 Sweden 271 565.31 Received SEK 3M
6 United States 622 359.00 Received $.86 Mil; Act. $1Mil
7 NEFCO 1 350 000.00 Received
8 Sami Parliament 12 987.26 Received NOK 100 000
9 Interest 24 238.80
10 TOTAL 12 727 178.00 Target 3 Million EUR
11 Amount Committed 2 800 000.00 PCOM decisions on FID, admin 12 Used Funds 302 302.85 Projects, legal fees, bank fees, etc.
Total Available 9 927 178.00 Total - commitments
PSI PROJECT CYCLE
Arctic Council Approved Project
Fund Manager -Expression of
Interest (EOI) - Final Investment
Decision (FID)
PSI Committee (PCOM)
Project Implementation
FM informs project leads; option to
resubmit If not
approved If project approved
Report Back to
PCOM Report Back to
Working Group
via project leads
OVERVIEW OF PSI Work 2015-2016
2 projects at 6 unique installations have been
completed and 2 feasibility studies completed – ACAP EG SLCP
5 projects have received approval for funding
11 projects have received expression of interest for
future PCOM approval subject to further development
Outreach is being made to the Arctic Council Working
Groups on the activities of the PSI and the availability
of funds through the PSI
Overview of PSI Work 2015-2016
Project Total (€) investment/PSI Funding Current Status Valday Cluster. SLCP , Karelia, RF
- Justozero, 12 solar cells + ancillary
- Kimovaara,149 solar cells +ancill.
- Lindozero, 24 solar cells + ancill.
- Vozhmozero, 32 solar cells + ancill.
- Voinitsa, 48 solar cells + ancillary Tundra Indigenous People Project;
Hybrid Wind-diesel and LED lights replacing mercury lamps.
Feasibility Study “Mapping
Substituting Solutions for Diesel Power Plants in the Arctic and North-West Russia”
Feasibility Study "Dolgoshcheliye Diesel Energy Conversion Study"
4,200,000/1,120,000
100,000/95,000
30,000
70,000
Completed.
Acceptance:
21 January 2016 28 January 2016 23 January 2016 19 January 2016 PCR Q4 2016
Completed June 2015
Completed March 2015
Completed
April 2015
PSI NEAR TERM (2016) ADDITIONAL WORK
Hazardous Waste –
• Project proposal on pesticides (FIN, RF)
• PCB Feasibility Studies (RF, NEFCO)
Energy Efficiency / Climate – SLCP
• HFC incl. inventory – End-of-Life Equipment (RF-SE)
• Dolgoschelye - Leshukonskoye Investment (RF-US)
• Flaring (Oil, Gas; waste, possibly other) (NO, RF, SE)
• Bio-mass burning (RF, SE)
• Renewable Energy – Circumpolar
• Black Carbon Assessment
Other
• Sanitation / Clean Water – Circumpolar
• CAFF Arctic Migratory Bird Initiative
EXPERIENCE WITH THE PSI
Projects can be successfully implemented under PSI
• Installations and 2 mapping projects complete Improvements are under-way:
• Increased communications between FM and WGs
• More clarity to AC Working Groups on funding availability
Funding is available and the PSI COM welcomes
projects proposals from all WGs
THANK YOU
Overview of PSI Work 2015-2016
Table 2 –Projects with Approved PSI Funding
No Project Date of PSI
Approval Total (€) investment/
PSI Funding Current Status 1
2
3
Component 1 PCB Project Evaluation.
The aim is to realize synergy with the Russian Railways (RR) PCB Destruction Facility in cooperation with UNIDO, & to demonstrate environmentally sound destruction of PCBs. The Component 1 includes preparation of TOR, feasibility studies, updating of inventories.
AIA Community based Black Carbon Assessment - Feasibility study
Component 1 SCWO - Pesticides Feasibility Study
PCOM 4
13 October 2015
PCOM 5 22 March 2016
PCOM 5 22 March 2016
[RR-UNIDO-GEF Project is estimated
€31 600 000]at PSI Funding for Component 1 is up to €400,000
PSI 137,500
PSI 100,000
Meeting with RR, UNIDO & MNRE. 22 June 2016. ToR under development with the stakeholders. A Memo of Understanding for access to site and data is to be established.
An “Assessment and proposal for PSI project initiation by the Fund Manager” was shared with AIA in early May 2016. Awaiting necessary feedback from AIA.
Work is progressing in cooperation with the EGHW. The scoping and fact finding phase has resulted in the a ToR (Draft 15.07.2016) for the tests as well as a preliminary
technical assessment of the SCWO to enable further action.
Overview of PSI Work 2015-2016
Table 2 (cont.) –Projects with Approved PSI Funding
No Project Date of PSI
Approval Total (€) investment/
PSI Funding Current Status
4
5
Valday Cluster Mitigation of SLCP / Black Carbon, Karelia, Russian Federation (RF)
(vi) Valday-Polgo: Hybrid wood gasification -diesel generators and revamp of DHsystem
Valday Cluster Mitigation of SLCP / Black Carbon, Karelia (RF)
(vii) Reboly: Construction of a small hydropower plant
PCOM 2 – 7 Oct. 2014
PCOM 2 – 7 Oct. 2014
[4,200,000/1,120,000]
(included in above]
Under clarification of access to biomass.
Under negotiations with the energy company.
Overview of PSI Work 2015-2016
Table 3 –Projects needing further work for approval by PCOM
No Project Date of PSI
Approval Total (€) investment/
PSI Funding Current Status
1
2 3
4
Removal of Mercury from Non-ferrous Smelter Plant (UMMC Chelyabinsk Zinc Plant) .
PCB Project – RR – UNIDO
Dioxin and dust removal Vorkuta Cement
Syktyvkar Dyrnos Landfill Methane Gas Mitigation
n.a.
n.a.
n.a.
n.a.
Total [3,500,000]
Total [31,600,000]
Total [5,000,000]
Total [9,000,000]
1) A Workshop on "Technical Information Exchange on Mercury Abatement in the Metallurgical
Industry", was held in Yekaterinburg in April 2015.
Currently, changes to the Workshop Report are under discussion that may make it acceptable to the Russian Federation.
2) Two outreaches made to UMMC, latest in June 2016. Awaiting response. Critical issue at present is to reach agreement with UMMC regarding
participation in the project
Subject to outcome of Component 1 work
Study on “Air emissions of dioxins/furans, dust, black carbon and heavy metals from Vorkuta Cement Plant when using conventional and
complementary fuels” implemented; Study on
“Demonstration project targeting dioxins and other pollutants at the Vorkuta Cement Plant” to be finalised during 2016.
Project scope and ToR for feasibility study under development with the City of Syktyvkar and the Ministry for Natural Resources and Environmental Protection of the Komi Republic.
Overview of PSI Work 2015-2016
Table 3 (cont)–Projects under work for approval of PCOM
No Project Date of PSI
Approval Total (€) investment/
PSI Funding Current Status
5
6
7
8
Super Critical Water Oxidation Destruction of Pesticides.
Arctic Oil and Gas Flaring, Feasibility Study Black Carbon - Conversion from Diesel in Dolgoshcheliye and Leshukonskoye.
Feasibility Study - Arctic Water Supply, Sewer, Waste and Renewables; SDWG: Arctic Remote Energy Networks Academy (ARENA) regarding reducing black carbon emissions from diesel in rural Arctic communities;
SDWG: Improving Health through Safe and Affordable Access to Household Running Water and Sewer (WASH)
n.a.
n.a.
n.a.
n.a.
Total [1,400,000]
[300,000]
Total [1,500,000]
Total [400,000]
Pending output of Component 1 work
Under development for possible consideration at PCOM 6
Pilot investment project builds upon the US project on BC. May incorporate all or elements of the AIA Community-Based Black Carbon and Public Health Assessment Project (EG IPCAP). ToR for feasibility study drafted in consultation with project owner ArchOblEnergo, and contract being prepared for selected consultant
On hold awaiting further SDWG commitment.
Overview of PSI Work 2015-2016
Table 3 (cont)–Projects under work for approval of PCOM
No Project Date of PSI
Approval Total (€) investment/
PSI Funding Current Status
9
10
11
12
AIA Community Based Black Carbon Health Assessment
Mercury Workshop in Russia (GEF)
Dioxin Inventory, technical support for RF Compliance
Overall project areas P1-P10 As approved by SAO Haparanda (Sweden) meeting decision, 15 Nov. 2012
n.a.
n.a.
n.a.
n.a.
[511,500]
Total [195,000]
[1,600,000]
n.a.
Pending output of approved FS, see above. Amarok?
On hold. SAO has been asked for guidance by ACAP whether it would be worth for the EG to promote this project further.("Amarok 2016" 2.2 Mercury Control Technology Workshop)
Amarok 4. Phase III (Dioxin/Furan PSG) Reduction/Elimination of Emissions of Dioxins and Furans in Russia with a focus on Northern regions / Amarok 4.2 P2345 - Inventory programs, control technologies and other support to Russia's compliance with international convention requirements
Eventual projects are to be developed by NEFCO in cooperation with Arctic Council Working Groups / Expert Groups (WG/EG) for eventual PSI Committee approval. PCOM 6 is to be held on the 27th of September 2016. Deadline for submission of project proposals for NEFCO’s assessment was 26 July 2016.
