The National Rural Support Program has ended its partnership with Sarmayacar for the management of the $40 million Climaventures climate fund following the results of a final due diligence process. The fund, which is supported by the Green Climate Fund, had selected Sarmayacar as the executing entity during the pre-implementation phase. According to an NRSP official, the decision to remove Sarmayacar was triggered by a third-party report that met GCF’s “zero tolerance” criteria, though further details remain undisclosed. Sarmayacar expressed that they were blindsided by this final review, which they say came without prior notice or direct communication from GCF.
NRSP’s confirmation of Sarmayacar’s removal from both the fund and the associated $10 million venture accelerator creates an urgent need to appoint a new fund manager ahead of the September 2025 deadline to sign the Funded Activity Agreement. GCF had previously granted a six-month extension beyond the original March 2025 deadline. The Climaventures initiative was part of multiple climate finance proposals submitted by NRSP, Pakistan’s accredited entity to GCF, especially after Pakistan served as Co-chair of the GCF Board in 2023.
Sarmayacar had initially been invited by NRSP almost two years before GCF’s final approval of the proposal in October 2024. Its CEO, Rabeel Warraich, stated that both NRSP and GCF had vetted their qualifications and selected them based on the track record of their first fund, experience of their general partners, and prior investments in climate-relevant startups. NRSP had reportedly conducted its initial due diligence within a short time frame, subsequently presenting Sarmayacar as a ‘prospective partner’ and later assigning them the role of executing entity.
Sarmayacar’s responsibilities extended to core project functions, including development of a pipeline of investable opportunities, preparation of the fund structure paper, term sheet, and Limited Partnership Agreement. According to Rabeel, Sarmayacar had already incurred related costs and featured prominently throughout the approved proposal.
Tensions reportedly escalated when Sarmayacar initiated PR campaigns following GCF’s board approval in October 2024. NRSP officials stated that these communications were premature, misleading, and carried out without consultation. Some reports, including a Reuters piece and a paid press release, inaccurately described the fund as being committed to Sarmayacar rather than to NRSP, which held the role of accredited entity. NRSP noted that these actions violated communication protocols, especially given that the FAA had not yet been signed and the partnership was not formalized.
Sarmayacar maintains that all media communications reflected publicly disclosed information at the time and were intended to secure additional funding needed to complement GCF’s $25 million anchor commitment. Rabeel emphasized that no false statements were issued and any discrepancies stemmed from third-party interpretations. NRSP, however, pointed out that there was no need for urgency as GCF allowed up to 18 months for each half of the fundraising.
The final due diligence, initiated without direct engagement with Sarmayacar, was described by Rabeel as unexpected. NRSP confirmed it was carried out by a third party and later approved by the GCF Secretariat. Sarmayacar was required to sign a Non-Disclosure Agreement, restricting its communication on the matter. While Rabeel said no major operational changes had occurred at Sarmayacar, NRSP implied that the personnel landscape around the project had shifted.
With the fund manager role now vacant, NRSP faces a challenge in securing a qualified replacement that understands Pakistan’s startup and climate investment dynamics. Despite the setback, Sarmayacar intends to continue prioritizing climate and sustainability across future funds and initiatives.
