---
title: "Multilateral Fund (Montreal Protocol) — Definition & Meaning"
description: "The Multilateral Fund supports developing countries in phasing out ozone-depleting substances under the Montreal Protocol."
url: "https://modeldiplomat.com/learn/glossary/multilateral-fund-montreal-protocol"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Multilateral Fund is the financial mechanism of the Montreal Protocol that funds developing countries' phase-out of ozone-depleting substances and hydrofluorocarbons.
- How does the Multilateral Fund differ from the Global Environment Facility?
- Who contributes to the Multilateral Fund and how are amounts set?
- What is the 'agreed incremental cost' principle the Fund uses?
- How did the Kigali Amendment change the Fund's mandate?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Positions at a glance

### Supporters

Concrete results anchor the Fund's record. Since 1991 the Multilateral Fund has approved cumulative funding exceeding US$5 billion, supporting more than 145 developing countries. China's halon and CFC production-sector closures, financed through sectoral agreements managed by the World Bank, were among the largest single undertakings. The 2021–2023 replenishment was set at US$540 million, agreed at the Meeting of the Parties, while a subsequent triennium added dedicated resources for the Kigali Amendment phase-down of hydrofluorocarbons (HFCs). India's Ministry of Environment, Forest and Climate Change implements its HCFC Phase-out Management Plan through the Fund, and the Indian Ozone Cell coordinates national projects. The Kigali Amendment, adopted in October 2016 and entering into force on 1 January 2019, expanded the Fund's mandate to HFCs—potent greenhouse gases—while maintaining the ozone-focused architecture.

### Opponents

The Fund operates on a replenishment cycle. Every three years the Parties negotiate and adopt a fixed contribution budget—the replenishment—funded by mandatory assessed contributions from non-Article 5 (developed) Parties, calculated on the United Nations scale of assessments. Contributions flow to a Treasurer, a role discharged by the UN Environment Programme. Governance rests with the Executive Committee, a 14-member body composed of seven Article 5 and seven non-Article 5 Parties, which meets up to three times yearly to approve country programmes, project funding, and policy. An Article 5 country prepares national phase-out plans and submits project proposals through one of the four Implementing Agencies. The Executive Committee reviews proposals against cost-effectiveness thresholds and agreed incremental-cost guidelines, approves disbursement, and monitors verified results against agreed reduction milestones, releasing tranches only when targets are met.

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Example

In October 2016, Parties to the Montreal Protocol adopted the Kigali Amendment, expanding the Multilateral Fund's mandate to finance developing countries' phase-down of hydrofluorocarbons, with India and China among the largest beneficiaries.

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