Lithuania and Japan's Hitachi signed on Friday a deal on construction of a nuclear plant in Lithuania to replace its only nuclear power station, closed in 2009 under an EU deal.

The investment is put at up to 5.0 billion euros ($6.7 billion) and the plant is projected to generate 1,300 megawatts.

The allocation of shares is yet to be agreed among the Baltic energy companies and Hitachi, but the law says that Lithuania must hold at least 34 percent.

The old plant provided 70 percent of Lithuania's electricity, and today the Baltic state imports more than half of its electricity needs.

Lithuania, which joined the EU and NATO in 2004, still relies on Russia for all its natural gas, which fires its power plants.

Its ties with its communist-era master have been rocky since it broke from the crumbling Soviet Union in 1990, and it has been locking horns with Russian gas giant Gazprom over pricing this year.

"This investment will create much jobs and will give impetus to our economy. This project also addresses one of the biggest challenges, allowing us to be more independent in the electricity market," Prime Minister Andrius Kubilius said on Friday.

The project also involves Lithuania's fellow ex-Soviet Baltic states Latvia and Estonia, which likewise joined the EU in 2004.

Masaharu Hanyu, vice-president of Hitachi, signed an accord in Vilnius with Lithuanian officials. A final deal is expected to be signed formally by the end of June, after receiving the Baltic state's parliament approval.

"We welcome this important milestone in the project and wish to emphasise our appreciation of the cooperative and supportive spirit in which the project has proceeded to date," Hanyu told reporters in Vilnius.

It marked the end of talks that opened July, when Lithuania invited Hitachi in alliance with General Electric to start talks, rejecting a bid by the US-based Westinghouse Electric, owned by Japan's Toshiba Corporation.

The accord includes provisions on rights and obligations for Lithuania and investors, enabling the project to continue with further design, licensing and site preparation activities, according to a government statement.

The government said that the final investment decisions and the start of construction were expected in 2015, and the target was for the plant to be operational by 2020-2022.

Lithuania closed its only nuclear power plant, a Soviet-era facility near Visaginas in the northeast, in December 2009, under the terms of its European Union entry five years earlier.

In another Soviet hangover, Lithuania long lacked power connections with Western Europe, although it is now connected to Finland's grid thanks to a Baltic Sea link via Estonia.

There are also plans to build an undersea cable to Sweden by 2015, and to hook Lithuania to neighbouring Poland's grid.