National

Tepco loan ceiling may hit ¥10 trillion

Kyodo

The government might raise its loan ceiling for Tokyo Electric Power Co. to ¥10 trillion from the current range of ¥5 trillion to ¥9 trillion, in light of the compensation payments and radioactive decontamination work it must carry out in the wake of the 2011 Fukushima disaster, sources said Saturday.

It is also considering financing the cost of the decontamination work, currently estimated at ¥2.5 trillion, by selling Tepco shares held by a state-backed fund, the sources said.

The decision on the additional assistance for Tepco will be made later this month. The measures would be included in the utility’s new business turnaround plan to be compiled by the company and the fund by the end of the year.

Under its current loan scheme, the Nuclear Damage Liability Facilitation Fund, which provides financial assistance to the utility, is allocated a type of government bond worth up to ¥5 trillion, which carries no interest and can be cashed by Tepco when necessary.

The government is considering lifting the bond issuance ceiling by about ¥4 trillion to ¥5 trillion, with ¥2.5 trillion earmarked for decontamination and ¥1 trillion for storage facilities for radioactive waste, the sources said.

The government is studying how much additional assistance will be needed for damage compensation, they said.

To alleviate the financial burden on the operator of the crippled Fukushima No. 1 nuclear plant, the bailout fund will sell Tepco shares acquired in July 2012, the sources said.

The utility received ¥1 trillion in public funds and fell under effective state control when the fund bought its shares and acquired a majority of the company’s voting rights at the time. The capital injection was meant to help the nation’s largest utility avoid bankruptcy.

The state-backed fund hopes to gain about ¥2 trillion from the shares, assuming the rise sharply in step with efforts to increase Tepco’s revenues in the turnaround plan. The utility will shoulder the remaining decontamination costs if earnings from shares fall short, the sources said.

Before the crisis, Tepco’s shares fetched more than ¥2,000 each but have since plunged to around ¥500. Critics doubt it will rise as the fund expects.

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