North-West Frontier Province Urban Development Sector Project

The project design was based on the assessment of seven sample TMAs and assumptions related to support for LGO 2001 from other sources to address capacity issues. The basis of the capacity assessment was seriously compromised during implementation. The project design did not have enough flexibility and depth to fill these capacity gaps, which would have required major changes in institutional arrangements and additional funding, a possibility that was avoided during implementation. Sector loans that include policy reforms should have much more flexibility and depth to absorb the changes that accompany most reform processes.