Khyber Pakhtunkhwa Governance (KPG) Project Monthly Report May 2015

The project was awarded to DAI on March 2, 2015, with a budget of $22.6 million. KPG is designed to support transitional activities in the KP Province that reinforce stability, counter extremism, promote democratic advances, and create opportunities for gender equality and women's empowerment. The project's activities are tied to the KP Government's seven objectives outlined in the KP Government's Strategic Development Partnership Framework (SDPF). These objectives include economic growth and job creation, peace building and rule of law, tangible progress in pro-poor sectors, improved participation and bringing the state closer to the citizen, improved transparency and accountability, enhanced fiscal space for economic and social development, and gender equity. To achieve these objectives, DAI will deliver KPG results by developing complementary packages of assistance that reinforce both the supply and demand side of governance. The project will use four main instruments: grants under contract, programmatic short-term technical assistance, direct distribution of goods and services (DDGS), and training. During the reporting period, the project team has made significant progress in setting up the project office in Islamabad. The team has identified an office location and signed a lease agreement. The project team will move into the new premises once the procurement and installation of office furniture and equipment are completed. The project team has also held coordination meetings with several projects, including the USAID-funded Gender Equity Project and the Small Grants and Ambassador's Fund Project. The team has submitted requests for GST exemption for the procurement of office furniture and equipment and has finalized the procurement for office equipment. The project team is working on developing an institutional assessment tool to assess the capacity of potential grantees to manage grants awarded by the project. Initial contact has been made with the KP Water and Sanitation Services Peshawar (WSSP) to examine the possibility for the project to provide in-kind support to them either through an in-kind grant or via the direct procurement of goods. However, the project is facing operational challenges due to the lack of a No Objection Certificate (NOC) from the Economic Affairs Division (EAD). The application for the NOC was submitted on April 22, and a support letter from USAID was provided on May 15. The project team is continuously following up on this matter and trying to obtain the NOC as early as possible. The project team has also identified key personnel, including the Chief of Party, Director of Good Governance, and Director of Community Participation and Public Advocacy. Several individuals have been selected to fill the positions of Finance Manager, Security Manager, Procurement specialists, and Field Accountants, and EBD verification for them is underway. The project team has finalized the lease of an office premise in Islamabad and is working on finalizing the office premises in Peshawar. The team has also submitted a request to the Contracting Officer's Representative (COR) to allow the KPG project to have first preference over the equipment, vehicles, and furniture of two USAID-funded projects that are scheduled to close down in September 2015. Overall, the KPG project is making progress in setting up the project office and developing the necessary tools and instruments to achieve its objectives. However, the lack of a NOC from the EAD is a significant challenge that needs to be addressed to initiate programmatic activities in the KP province.