Economic Revitalization of Khyber Pakhtunkhwa and FATA (ERKF)

The Economic Revitalization of Khyber Pakhtunkhwa and Federally Administered Tribal Areas (ERKF) Project was designed to support the Government of Pakistan in the economic recovery and revitalization of the crisis-affected areas of KP and FATA (now called the Merged Areas (MA)  by creating sustainable employment opportunities through rehabilitation of small and medium enterprises (SMEs), investment mobilization, and institutional capacity building.

The crises in the country resulted in enormous destruction, internal migration/displacement, and massive loss of livelihoods. The adverse effects of these crises were much more pronounced in KP and MA than the rest of the country. ERKF Project became effective in October 2011 as an emergency response project and since then has supported revitalization of the private sector enterprises in the crisis-affected regions through direct support for the Small and Medium Enterprises (SMEs), investment promotion and institutional capacity building. The project is administered by the World Bank (WB) as a Grant and funded through the KP/FATA/Baluchistan Multi Donor Trust Fund (MDTF) established in year 2010 to support the 2010 Post Crisis Needs Assessment (PCNA) report.

SMEDA is implementing the SME Development component of the project to revive and upgrade the SME sector of the province. The project interventions results in increasing the income of the SMEs and also boost employment opportunities by addressing the potential demand for the matching grants from the region's private sector. Two types of MG support are being provided under this Component, namely (1) Up-gradation and (2) Rehabilitation. The Up-gradation grant has further two categories of Up-gradation grants i.e. Individual and Cluster/CFC.

The beneficiary feedback and Third Party Monitoring Agent (TPMA) reports verified that the ERKF Project contributed significantly towards the Strategic Objectives (SO) 1 i.e. Build responsiveness and effectiveness of the State to restore citizen trust and SO-2 i.e. Stimulate employment and livelihood opportunities of the 2010 PCNA Report.

The Projects Round-1 was from Oct 2011- March 2017 and Round-2 is from April 2017 – June 2020. The Round-2 of the project is being extended for another two years i.e. July 2020- June 2022.

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