A state-backed bailout fund has agreed in principle on a new turnaround plan for Tokyo Electric Power Co. that features more financial support from the government as Tepco gropes to contain the Fukushima No. 1 nuclear plant disaster, but the plan also assumes reactors will be restarted.
Lenders responded Thursday by extending the utility ¥500 billion.
The Nuclear Damage Liability Facilitation Fund and Tepco declined comment Wednesday on details of the plan, which still needs to be approved by the government, but sources said it was based on the assumption that reactors at Tepco’s massive Kashiwazaki-Kariwa plant in Niigata Prefecture will be restarted beginning in July.
Amid calls from the fund and Tepco that it is impossible for a single private company to shoulder all the costs stemming from the triple meltdown, the government said Dec. 20 it will provide more financial aid to make sure the utility doesn’t face funding difficulties.
The decisions will include whether to raise the ceiling for interest-free loans Tepco is allowed to receive from the fund to ¥9 trillion from the present ¥5 trillion. That decision has already received preliminary approval.
Tepco, with the help of other atomic utilities, will continue to repay the loans it has received for compensation purposes, so far estimated at ¥5.4 trillion.
The decontamination costs outside the Fukushima plant are being paid from the national coffers on behalf of Tepco, but the government will seek to recoup its money by selling Tepco shares currently owned by the fund.
Tepco President Naomi Hirose declined comment Wednesday on the content of the business plan but said, “As the government has decided to take a step forward (in supporting us), we must move three or four steps ahead to carry out our responsibilities.
“We must achieve compensation, decontamination, the decommissioning of the Fukushima plant, while supplying electricity in a stable manner — all at the same time . . . the plan has included some specific measures to implement them,” Hirose said.
The fund is expected to submit the plan to the government Friday, with Economy, Trade and Industry Minister Toshimitsu Motegi likely to approve it in January.
Based on the assumption that Tepco will be able to move into the black under the new turnaround plan, 11 financial institutions, including banks and insurers, extended Tepco ¥500 billion in loans Thursday.
Of the total, ¥300 billion constitutes fresh loans, while ¥200 billion was extended for loan rollovers.
The banks include Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group and Mizuho Financial Group.
There is no guarantee, however, that the rehab plan will put Tepco’s business back on track, especially because it remains uncertain if any of the seven Kashiwazaki-Kariwa reactors will be allowed to be restarted.