PESHAWAR: The International Fund for Agriculture Development (IFAD) has voiced serious concerns over the transfer of the project director of the Rs50 billion KP-Rural Economic Transformation Project (KP-RETP), insisting the move violates the provisions of the financing agreement.
The KP-RETP is an IFAD-funded project under the planning and development (P&D) department with the objective of uplifting most vulnerable rural communities in the province by focusing on high-value agriculture, skills development and economic empowerment for women and youth.
Following the transfer of the project director of KP-RTEP, the IFAD as well as the Economic Affairs Division (EAD) have written to the KP government, raising concerns over the change of leadership which was done without the input of the donor agency. Copies of both letters are available with Dawn.
The change and subsequent strong reaction from the IFAD, according to a senior official, has put the government in a quandary, unsure whether to move ahead with its decision or rescind its orders.
Insists move against financing agreement, may disrupt project implementation
The official also said that the transfer row even has potential implications for other international donor funded projects in the province with many now having second thoughts over their contractual obligations with the provincial government.
According to credible sources at heart of the controversial posting order is the alleged move to appropriate substantial sums of IFAD funds for training purposes with an engineering university in violation of its government contractual obligation with the donor. They said that the loan at 0.5pc was the cheapest loan offered in the country.
On July 20, the EAD wrote to the KP additional chief secretary for P&D department, saying IFAD has raised serious concerns regarding the transfer of project director without the prior consent of the donor in violation of conditions of financing agreement.
“The financing agreement signed between the government of Pakistan and IFAD and amended on 20th March 2025 stipulates that such level posting transfers should be done with the prior consent of IFAD and due justification,” it noted.
The EAD said that the IFAD, while expressing concerns over the slow implementation of the project, has also conveyed that the transfers of the project director at stage might result in further slowdown or halting of project activities and loss of project staff.
“In view of the above, KP government is requested to ensure effective compliance of the requirement stipulated in the financing agreement signed with the IFAD and also furnish its views/justification on the transfer of the PD In deviation of conditions of financing agreement,” it said in the letter.
On July 14, the IFAD wrote a letter to the KP chief secretary and EAD secretary, saying the KP-RETP is 157.5 million euros project financed through an IFAD loan of 74.09 million euros and co-financed through an European Union grant of 15.27 million euros.
The project was cleared by the donor’s executive board in December 2021 while financing agreement was signed in May 2022 and implementation is spread over seven years, with scheduled completion date of June 30, 2029.
The donor noted that following its supervision mission of November 2023, the project was classified as an actual problem project due to its prolonged start-up delays, slow implementation progress and significant quality gaps. It said that under this status, the project was exposed to the risk of restructuring and/or partial cancellation of the loan.
However, it said that following the implementation support missions, the project rating was upgraded to potential problem project following the IFAD supervision mission of September 2025.
The IFAD said that when the project director assumed the position of project director, the project loan disbursement stood at only 8pc (6.1 million euros) and project expenditure accounted to less than 1pc (0.7 million euros).
“Under this leadership and as of April 30, 2026, IFAD loan disbursement increased to 24pc (17.8 million euros) while actual utilisation of loan proceeds rose to 8pc (6.2 million euros), representing a substantial improvement in the project implementation performance,” it said.
The donor said that the project was expected to achieve loan disbursement and expenditure of 40pc by mid-term in June 2027 and implementation of field activities must be significantly accelerated before the next supervision mission in December 2026 to enable the project to exit its current problem status.
It also said over the last two years, the donor had made significant investment in strengthening the project director’s capacity through training and technical support on its policies and these investments enabled him to develop a comprehensive understanding of the project’s technical, operational, fiduciary and institutional dimensions.
“Replacing the project director at this critical juncture may disrupt implementation, slow decision making and potentially contribute to further turnover with the project management unit. Such disruption could undermine the considerable efforts made by both the government and IFAD to bring the KP-RTEP out of problem status,” it noted.
The IFAD also reminded the KP government that under the provisions of the financing agreement between Pakistan and IFAD, the funds prior no objection was required before the appointment or replacement of project director and other key staff of the project management unit.
“We request to consider maintaining the project director in his position to ensure continuity of leadership and effective implementation during this critical phase of the project,” noted IFAD country director for Pakistan Fernanda Thomaz Da Rocha.
Published in Dawn, July 25th, 2026
