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The July 2018 peace agreement between Eritrea and Ethiopia opened new prospects for the country's socio-economic development, linked with the advancement of regional economic integration in the Horn of Africa. However, in autumn 2020 the Government put on hold the entire cooperation programmes financed by the EU under the EU Emergency Trust Fund for Africa.
The EU has supported Eritrea since its independence in 1991. This support has covered a range of areas in the past such as agriculture and food security and governance while the last cooperation programming has shifted focus to also include the issue of energy production. Though there has been considerable progress in a number of areas such as public health, and gender equality, the impact of wars and climate difficulties continue to hamper economic and social development.
There are two main priority areas under the EDF-11 programme in Eritrea – renewable energy and governance and public finance management. Another area of activity is the rehabilitation of the railway system. Problems with energy supply significantly hinder social and economic development (98% of the limited energy generation comes from imported fossil fuels; only 38% of the population has access to electricity with rates below m10% in rural areas). In addition, these transport problems cause difficulties for exports.
Within these broad priorities, a number of specific activities and programmes were agreed upon:
Energy for development – increasing generating capacity, especially from renewable sources; increased access for specific sectors such as farming and fishing through photovoltaic and wind standalone systems; studies on geothermal energy; improvements in distribution and a number of other smaller programmes. In all, this priority area accounted for €175m between 2014 and 2020, or 87.5% of the total aid given.
Governance and public finance management – here EU aid supported macro-economic planning and management, public financial management and the implementation of recommendations under the Universal Periodic Review by the UN. These actions accounted for €20m or 10% of the overall budget during the period. Capacity development in public administration was seen as the key to progress in multiple economic sectors. In addition, actions were taken to promote social development and justice.
A budget of €5m was used to support the National Authorising Officer and related initiatives.