ROME - Rebuilding the central Italian region of Abruzzo after last week's devastating earthquake will cost 12 billion euros ($15.9 billion), Interior Minister Roberto Maroni said.

Initial estimates by catastrophe risk modeling firm AIR Worldwide had put the damage from quake, which struck Abruzzo in the early hours of April 6, at between 2 and 3 billion euros.

At least 294 people were killed in the disaster, which left some 40,000 homeless and damaged scores of historic buildings.

Twelve billion euros: that is the amount we must find to rebuild Abruzzo, Maroni told Italian television late on Tuesday. He did not specify a time period.

The disaster struck in the midst of Italy's worst recession since World War II, with its 1.6-trillion-euro economy expected to contract for a second consecutive year in 2009.

Italy's center-right government is already battling Europe's largest debt, equivalent to more than its annual GDP. The government has said it will now offer incentives for anyone using anti-seismic technology, and has promised monthly payments to residents who lost their livelihoods.

Previous reconstruction efforts following earthquakes in southern Italian have dragged on for decades, amid allegations of corruption and Mafia involvement.