EU head of delegation in Zambia, Derek Fee, said part of the funds would also be directed towards reducing poverty and improving political and economic governance.

"We are preparing the next round of aid to Zambia and we will be giving the country 380 million euros, and that figure is likely to increase by 90 million euros depending on the improvement of governance issues," he told journalists in Lusaka.

Fee said Zambia would receive the funds in the form of grants, part of which would be for direct budget support under its fifth national development plan (FNDP), a five-year government economic recovery and development programme.

Zambia is enjoying solid economic growth and has been praised by Western governments for prudent economic policies, although critics say poverty remains widespread and the country is still not reaping enough benefits from its vast copper resources.

It benefited from recent debt relief and is keen to negotiate a new poverty reduction lending programme with the International Monetary Fund in 2007.

Fee said Zambia's AIDS pandemic was serious and that the problem had been compounded by high poverty levels.

One in every five Zambians lives with HIV or has full blown AIDS while 68 percent of the country's 11,5 million live in abject poverty.

"Our two focal areas will be infrastructure development and health.

We will also support good governance and we would like to see improvements in the performance of the judiciary," Fee said.

The EU would also provide direct budget support to Zambia and provide funds for improving education and other social sectors.

Some of the funds directed towards health services would be to assist Zambia retain doctors and nurses leaving the country for better pay in Europe and the United States, Fee said.

Nampa-Reuters

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