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BRUSSELS Fri Oct 31, 2014 4:32pm GMT

Zimbabwe President Robert Mugabe addresses supporters outside his ZANU PF party headquarters in Harare, October 30,2014.

Credit: Reuters/Philimon Bulawayo

BRUSSELS (Reuters) - The European Union will take another step towards normal relations with Zimbabwe from Saturday by ending restrictions on aid, paving the way for 234 million euros (183 million pounds) of new funding, the bloc said on Friday.

The 28-nation EU has been gradually easing sanctions on Zimbabwe to encourage political reform, although it has kept an asset freeze and a travel ban on veteran President Robert Mugabe and his wife Grace, as well as an arms embargo.

The EU suspended budgetary support and aid for projects in the southern African country in 2002 in response to human rights violations and what it said were attempts by the Zimbabwean government to prevent free elections.

Ten years later, the EU suspended these sanctions but did not immediately reopen the development aid taps.

The restrictions on EU aid will expire altogether on Saturday, the EU said, enabling the bloc, for the first time since 2002, to make multi-year aid commitments to Zimbabwe and to work with the government on how the money will be spent.

The Zimbabwe government and the EU are preparing a 234 million euro aid programme covering the period until 2020 "aimed at helping Zimbabwe become a more democratic and prosperous country," an EU statement said.

The programme will focus on health, agriculture-based economic development, governance and institution-building.

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European Union to end curbs on aid to Zimbabwe