In December 2024, Rabeel Warraich, founder of Sarmayacar, took the stage at Karachi’s inaugural electric vehicle conference, organised by the Climate Action Centre, to advocate for a venture-backed model to tackle climate change. Just months later, his firm has been quietly removed from what is meant to be Pakistan’s most ambitious experiment in climate startup finance, a $50 million project backed by the United Nations’s Green Climate Fund (GCF).

What began as a flagship public-private partnership is now a public-sector scramble. With no fund manager, no institutional venture capital commitment, and no clear timelines, the National Rural Support Program (NRSP), the project’s accrediting entity, is now looking for a new private-sector partner to fill the vacuum left behind.

Sarmayacar was initially named as the executing entity for the $40m Climaventures fund, a critical component of the overall project that would distribute up to $2m each to 15-20 scaling climate-tech startups, pooled from the project’s other component, the venture accelerator, which is to fund up to 100 idea-stage startups with up upto $50,000 each. However, following a quiet due diligence process that Sarmayacar says took them by surprise, the partnership collapsed before implementation even began. Sarmayacar, once front and centre in media reports surrounding the fund, had been missing in action for the last few months as the six-month deadline for GCF and NRSP to sign the Funded Activity Agreement (FAA) approached.

Now, NRSP has confirmed that a six-month extension has been granted by the GCF to sign the FAA, giving the project more time to restructure and find a replacement fund manager. When asked why the partnership with Sarmayacar failed, NRSP declined to comment on the contents of the due diligence report, citing confidentiality. Sarmayacar, for its part, confirmed that it was asked to sign a non-disclosure agreement before the review process began.

The vacancy at the GCF-backed Climaventures Fund is not just logistical; it’s existential. The fund was built on a model of private capital mobilisation and institutional credibility. Though NRSP’s involvement as an accrediting entity provided administrative cover, the approved proposal’s central premise was a market-led solution to Pakistan’s climate crisis. A sovereign guarantee wasn’t the selling point; the private sector was.

What was intended as Pakistan’s flagship public-private partnership for climate may be looking at a potential collapse following Sarmayacar’s exit

Despite the willingness of other venture capital (VC) funds to cash out on the management fee of a $40m fund, none of Pakistan’s active VCs have a track record of raising a sector-specific $25m fund, let alone deploying it into early-stage climate startups. Even fewer VC firms have the necessary experience managing institutional capital tied to development finance and the patience required to work with the bureaucracy on development projects.

GCF’s approval of NRSP’s proposal for $25m anchor funding was conditioned on another $25m being raised by the Climaventures fund, and while GCF’s processes allow for up to 18 months to raise the first half and another 18 months to raise the rest, a preliminary requirement is to have a fund manager with the status of ‘general partner’. After all, active VC funds domiciled in Pakistan are in the single digits, and most of them lack a history of raising a fund as large as $25m. And nearly all of them have no established track record with Climate Ventures.

Though NRSP’s involvement as an accrediting entity provided administrative cover, the approved proposal’s central premise was a market-led solution to Pakistan’s climate crisis

The NRSP official also confirmed that they are not limited to domestic fund managers, noting that even Sarmayacar is a Netherlands-domiciled fund. Gobi Partners, Indus Valley Capital, i2i Ventures and Zayn VC are the remaining foreign-domiciled VC funds exclusively focused on the Pakistani market.

This was supposed to be Pakistan’s flagship public-private partnership for climate, a landmark effort to bridge development finance with venture capital to create venture-backed incentives for climate action. But with no public acknowledgement from NRSP and details surrounding the selection of a new partner, the silence around the project’s ‘potential’ collapse is louder than the partnership ever was.

The writer is a business journalist based in Karachi and reports on emerging economies

Published in Dawn, The Business and Finance Weekly, June 10th, 2025