By Amie Ferris-Rotman

HERAT, Afghanistan (Reuters) - The European Union threw its weight behind developing Afghanistan's small but promising private sector this week, in the hope that business can usher in stability and peace once foreign troops leave by the end of next year.

In the largest ever EU visit outside the capital Kabul in 12 years of war, a 21-country delegation of envoys jetted to the western city of Herat on Sunday, whose flurry of business activity is largely seen as a rare success story in desperately poor, insurgency-plagued Afghanistan.

War and tens of billions of dollars in constant aid have made Afghanistan a ward of the international community, though vast potential mineral resources and pent-up business desire amongst educated youths mean the environment could be changing.

The EU chose Herat for its trip as "we are encouraged by the province's vision, its ability to attract foreign investment", the bloc's representative to Afghanistan, Vygaudas Usackas, told Herat governor Daoud Saba at his summer home overlooking the city, where high-rise apartments glistened in the sun.

Saba, appointed three years ago largely for his expertise in minerals, called his large and fertile province, one of 34 in the country, a "stand-alone island".

Herat's $1-billion a year economy, mostly from agriculture, industry and mining, led the province to contribute almost a fifth of the country's revenue last year.

"Afghanistan is slowly, slowly becoming another country, moving from the Kabul-centric way of things," Italian ambassador Luciano Pezzotti, whose embassy and military organized the EU trip to Herat, told Reuters.

The fourth-largest contributor to the NATO-led war, almost all of Italy's 3,000 troops are in Herat.

German ambassador Rudiger Koenig said Herat, which enjoys better security than the Taliban strongholds of the south and east, should serve as a "blueprint" for the rest of the country.

Despite Western sanctions denting the economy of much richer Iran, with which Afghanistan shares a long and porous border, Herat enjoys robust trade with its Muslim neighbor and is expected to more than double its output over the next decade, spurred by the private sector, Saba said.

In 2012, 8.4 percent of Afghanistan's annual GDP of around $20 billion was from the private sector, according to the Asian Development Bank, up 1 percent on the year before.

Its "made in Herat" goods, particularly white marble, own-brand Super Cola, and the country's most successful ice cream company, "Herat Ice Cream", have already come to symbolize quality beyond Herat's borders.

Britain-based firm Cashmere Fibres International Limited is expected to soon move its dehairing facility to Herat, the embassy said, in a bid to boost the private sector.

(Reporting by Amie Ferris-Rotman; Editing by Ron Popeski)