PESHAWAR:TheInternational 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 IFADfunded 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 KP-RTEP project director, the IFAD as well as Economic Affairs Division (EAD) have written to the KP government, raising concerns over the change of leadership 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 moveahead with its decision or rescind its orders.
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 controversialposting 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 cofinanced 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 ofNovember 2023, the project was classified as an actual problem project due to its prolonged startup 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 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.