State to raise ceiling on TEPCO loans to 9 trillion yen

December 19, 2013


The government is set to offer more financial assistance to Tokyo Electric Power Co. to help it deal with the Fukushima nuclear crisis, a move many decry as a taxpayer-funded bailout.

A key step will be an increase of the ceiling on interest-free loans through the state-backed Nuclear Damage Liability Facilitation Fund to 9 trillion yen ($87 billion) from 5 trillion yen.

The government will also pay for cleaning up areas affected by radioactive fallout beyond the 2.5 trillion yen to be borne by TEPCO, operator of the stricken Fukushima No. 1 nuclear plant.

It will spend an additional 1.1 trillion yen on construction of intermediate storage facilities for radioactive soil and debris collected through decontamination work.

“The roles of the government and TEPCO will be clearly defined to advance rehabilitation of Fukushima without delay,” said a draft of government guidelines for accelerating recovery from the nuclear accident.

In line with the new government policy, TEPCO plans to focus on decommissioning the Fukushima No. 1 plant and controlling the growing stockpile of radioactive water on the site.

At a board of directors’ meeting on Dec. 18, the utility decided to delist the No. 5 and No. 6 reactors of the Fukushima No. 1 plant as of Jan. 31, 2014, to eventually decommission them.

The company already decided to decommission the No. 1 through No. 4 reactors, which were crippled by the March 2011 Great East Japan Earthquake and tsunami.

TEPCO plans to turn the plant complex into an autonomous division within the company that will specialize in decommissioning and dealing with contaminated water, as early as next fiscal year.

The plan will be included in TEPCO’s new rehabilitation plan, to be compiled by the company and the Nuclear Damage Liability Facilitation Fund as early as Dec. 27.

The utility will use the No. 5 and No. 6 reactors as a research and testing ground for robotic and other technologies required for decommissioning the four other reactors.

The government has called on TEPCO to carry out reforms as preconditions to its proposed assistance to counter criticism from the general public and lawmakers that it is bailing out the struggling company.

“Bold strategies” cited by the government include the shift to a holding company under which the power generation and transmission divisions are separately managed, and alliances with other companies to cut fuel costs.

The government also plans to ask TEPCO’s creditor banks to cooperate with its reform measures.

Under the current framework, TEPCO is expected to pay all the funds required for decommissioning, decontamination and compensation to nuclear disaster victims.

It can borrow up to 5 trillion yen for compensation and decontamination through the Nuclear Damage Liability Facilitation Fund, which owns a majority of TEPCO shares.

Under the new arrangement, the maximum amount of government loans will be raised to 9 trillion yen under the fiscal 2014 budget. TEPCO will draw on loans to pay compensation, estimated to total 5 trillion to 6 trillion yen.

As for decontamination, the company will be responsible only for the work already planned, which will limit its payments to 2.5 trillion yen. Additional cleanup activities will be done as public-works projects.

The government plans to reduce the utility’s burden further by allocating gains from future sales of TEPCO shares owned by the Nuclear Damage Liability Facilitation Fund.

TEPCO, meanwhile, has set aside 1 trillion yen for decommissioning and radioactive-water measures and will secure an additional 1 trillion yen during the next 10 years.

The government plans to help the company in fighting contaminated water by spending 69 billion yen on construction of frozen soil walls and other measures.

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The No. 5 and No. 6 reactors at the Fukushima No. 1 nuclear power plant (Asahi Shimbun file photo)

The No. 5 and No. 6 reactors at the Fukushima No. 1 nuclear power plant (Asahi Shimbun file photo)

  • The No. 5 and No. 6 reactors at the Fukushima No. 1 nuclear power plant (Asahi Shimbun file photo)

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