German utility firm RWE is pulling out of Bulgaria's nuclear plant project in Belene, in which it was to hold 49 percent, the government in Sofia announced on Wednesday.

The economic crisis, a lack of funding and no definitive agreement with Russian company Atomstroyexport, which was to build the plant, were among the reasons for RWE's withdrawal, said Galina Tosheva, director of the national energy holding, which includes all the main state-owned energy companies.

RWE also confirmed the news to Dow Jones Newswires.

"We have terminated the joint venture agreement with (Bulgaria's state-owned electricity utility) NEK today because of problems financing the project," said Stephanie Schunck, spokeswoman for the company's power generation unit RWE Power.

Bulgaria will now "invite foreign investors after the project's funding has been established," Deputy Economy and Energy Minister Maya Hristova told a press conference on Wednesday.

The new government, which took office in July, has said it is re-examining the project in the northern Bulgarian town of Belene and is considering the sale of part of its 51-percent share.

Bulgaria and Atomstroyexport signed an initial 4.0-billion-euro (5.9-billion-dollar) deal for the plant last January but failure to find funding severely delayed construction.

Atomstroyexport officials meanwhile disclosed that the cost of construction for Belene's two 1,000-megawatt reactors had risen to 6.0 billion euros, while Bulgaria put the price for the plant and its adjacent infrastructure at between 9.0 and 10 billion euros.

Bulgaria has only one nuclear plant currently, in Kozloduy, with a capacity of 2,000 megawatts and saw the building of the Belene site as a means to regain its position as a leading electricity exporter in the Balkans.

The country was forced to drastically lower its electricity exports after the closure of four of Kozloduy's six reactors ahead of its entry into the EU.

Bulgaria has so far received 550 million euros from the EU as compensation for the closure and the European Commission proposed this week to disburse an additional 300 million euros to its poorest newcomer.

RWE's withdrawal from the Belene project is also considered a hard blow to the company's ambition to invest in nuclear energy in order to lower its CO2 emissions record.

The owner of a number of highly polluting coal-fired plants, RWE needs to either diversify its electricity production or enter the expensive trade of CO2 emissions.