* Utility says prefers focusing on its own projects

* Sector peer RWE says still committed

FRANKFURT, April 11 (Reuters) - German utility E.ON

EONGn.DE said it would stop working with the Desertec Industrial Initiative (DII), a German industrial group that aims to import solar and wind power from deserts, the latest in a series of blows to the project.

Germany's biggest utility will not renew its contract, which expires at the end of the year, it said in a statement on Friday.

When the DII was set up in 2009, shareholders said they aimed to provide up to 15 percent of Europe's power by 2050 from solar and wind parks in North Africa and the Middle East, saving 33 billion euros ($45.8 billion) in costs per year.

E.ON now plans to focus solely on its own projects in the future, although still keeping an eye on developments of renewable energy markets in Africa and in the Middle East, the utility said.

Critics such as the head of the German Energy Agency have said the Desertec project, with an expected budget of 400 billion euros, is too expensive to be practical, among other objections.

Siemens SIEGn.DE and Bosch ROBSCJ.UL quit the consortium in 2012 after the two companies had made investments of their own in solar power, which proved unsuccessful after the sector was hit by global overcapacity and price declines.

Last year the Desertec Foundation, a supporting non-profit initiative, also pulled out due to a row over strategy, communication and management style. ID:nL5N0F71C9

But utility RWE RWEG.DE , another shareholder, said on Friday its backing for the initiative had not been shaken. "We still believe in the future of the project," a company spokesman said.

Other remaining partners in the DII project include Munich Re MUVGn.DE , Deutsche Bank DBKGn.DE , ABB ABBN.VX and Shell

RDSa.L .

($1 = 0.7204 Euros)

(Reporting by Kirsti Knolle; Editing by Marilyn Gerlach and Jane Baird)

((kirsti.knolle@thomsonreuters.com)(+49 69 7565 1262)(Reuters Messaging: kirsti.knolle.thomsonreuters.com@reuters.net www.reuters.com ))

Keywords: EON DESERTEC