Bulgaria's government approved on Wednesday preliminary plans to install a new 1,000-megawatt reactor at its Kozloduy nuclear power plant, after another project fell through.

"The government decided to open up for investment the project for a new reactor 7 at the Kozloduy nuclear power plant," Finance Minister Simeon Djankov said after a cabinet session.

"It will be built on market principles, that is, without government money or state guarantees," he added.

The new reactor is already being built by Russian company Atomstroyexport as part of a project for a new nuclear plant at Belene, in the north, which Bulgaria abandoned in late March for lack of funding and investors' interest.

The government, which had almost paid off the new unit, said at the time that it might sell it or move it to the Kozloduy site to save on infrastructure costs.

According to experts, the licencing procedures could take as long as eight years.

The new 1,000-megawatt reactor would join two units that are still operating at Kozloduy but are due to shut down in 2017 and 2019.

Bulgaria had launched the Belene project to compensate for lost capacity after Brussels demanded the shutdown of four 440-megawatt units at Kozloduy over safety concerns on the eve of Sofia's European Union accession in 2007.

But the project was bogged down by haggling with Russia over the cost of the new plant and the inability to find a new foreign investor after the withdrawal of German utility RWE in 2009.

Bulgaria, which is heavily dependent on Russia for its oil and gas needs as well as for fuel for Kozloduy, will now seek a third-party investor for the new project, while continuing plans to extend the operational life of Kozloduy's existing units.