The European Union is the world’s largest aid donor, responsible for more than a half of international aid. The cooperation between the EC and Eritrea started soon after Eritrea's independence, focusing on post conflict rehabilitation programmes. The 8th European Development Fund (EDF) for Eritrea aimed at restoring macroeconomic stability and viability. The war with Ethiopia (1998-2000) and the resulting destruction of physical and social capital led to new needs in terms of post-conflict rehabilitation, which became the focal area of the 9th EDF Country Strategy Paper (CSP), with emphasis placed on both the reconstruction of physical infrastructure and the demobilisation of combatants. The 10th EDF CSP follows the rationale of moving increasingly away from post-conflict rehabilitation towards a more development-oriented approach. It reflects the priorities set by the GSE in the 'Eritrea – EU ties: broad outline of medium term cooperation programme', and is consistent with the commitment to poverty reduction enshrined in the Interim PRSP.
A total of €110 million was foreseen for the period of 2002 – 2007 under the 9th EDF. Following a mid-term review of programmes however funds were shifted towards more development-oriented activities, with the introduction of a large-scale programme of support to education and an increased focus on road maintenance and safety. A total amount of €53 million was allocated for the EC Support to the Education Sector in Eritrea, €20 million for the Post-Conflict Rehabilitation Programme (for the rehabilitation of the Hirgigo Oil Jetty and the Tesseney Water Supply Project) and €38.75 million for the Road Maintenance and Safety Programme. Remaining funds from the EDF and budgetary resources were allocated to projects supporting non-state actors (in particular the Eritrean trade unions), the Office of the Auditor General, food security, Senafe hospital re-construction and a technical cooperation facility.
For the 10th EDF,covering the period 2009-2013, a total of €122 million have been recently approved. The EC will continue to finance projects that are directly linked to the basic needs and livelihoods of the Eritrean population. Food security has been chosen as the main priority with additional important contributions allocated to governance and restoration of national heritage.
A total of €70 million has been foreseen for the food security programme. The first phase of €37 million, which is in its final stage of approval, will support measures along the production and marketing chain with emphasis on sustainable land and water development, including construction of irrigation works, support to increase production and rural income and capacity building of producer groups and governments institutions.
Under the governance sector, support amounting to €10 million will be provided to the justice sector, community courts in particular, and to the capacity building of the public administration. Moreover, additional funds of €5 million will be secured for the cultural heritage programme aiming at the preservation of cultural assets in Asmara. All these programmes are expected to begin in 2010.