Germany has been assisting the creation of the new state of Timor-Leste since 1999. In the first few months after the withdrawal of the Indonesian troops, humanitarian micromeasures in refugee camps in western Timor (Indonesia), together with resident registration and the issue of personal IDs were promoted in Timor-Leste under a contract from the German Federal Foreign Office.

GTZ has been working here since 2000 under a commission from the German Federal Ministry for Economic Cooperation and Development (BMZ). In the initial phase, development cooperation focused on restoring the drinking water supply in Baucau and Viqueque. Projects for peace promotion, food, emergency and refugee aid were also supported. Between 1999-2002 the German Federal Government provided a total of 17.4 million euro. Since June 2002 some 8.3 million euro has been provided to develop the maritime transport sector and ferry link between Oecussi and Dili and the island of Atauro.

The effort needed to establish Timor-Leste as an independent state is enormous. In 1999 two thirds of the infrastructure was destroyed. Growth in 2000-2001 brought industrial production back to the level before the crisis. However, since the gradual withdrawal of the international organisations and decrease in aid, there has been a significant decline.

In June 2003 the maritime transport sector was agreed as a new priority area for development cooperation with the Timorian government. The work is supplemented by technical cooperation projects in the fields of drinking water supply and food security in rural areas, agricultural extension services and conflict management.
To promote small and medium-sized enterprises (SMEs), GTZ established four regional Business Development Centres in Timor-Leste under a contract from the World Bank.

The Technical Cooperation projects in progress in Timor-Leste are supported by the GTZ Office, Indonesia.