A group of banks agreed Sept. 27 to extend 80 billion yen ($800 million) in loans to Tokyo Electric Power Co. for refinancing after the struggling utility moved toward restarting two nuclear reactors, bank executives said.
A group of banks agreed Sept. 27 to extend 80 billion yen ($800 million) in loans to Tokyo Electric Power Co. for refinancing after the struggling utility moved toward restarting two nuclear reactors, bank executives said.
The money will go to repayments due at the end of October on loans of the same amount that were extended to TEPCO before the March 2011 Great East Japan Earthquake and tsunami triggered the accident at its Fukushima No. 1 nuclear power plant.
In the coming days, about 30 banks of the group will decide how much of the 80 billion yen each will contribute. They will convey their decision to TEPCO and the government’s Nuclear Damage Liability Facilitation Fund by mid-October.
Some of the 30 financial institutions, especially local banks based in areas affected by the March 2011 disaster, remain cautious about lending to TEPCO. If those local banks balk during the discussions, some major banks said they will make up the difference, several bank executives told The Asahi Shimbun.
The decision to grant the new loans came the same day TEPCO applied to the Nuclear Regulation Authority for safety screenings of the No. 6 and No. 7 reactors at its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture. The screening process is required before the reactors can be restarted.
The financial institutions extending the loans, including three megabanks, viewed TEPCO’s screening application as a step toward generating nuclear energy and improving its financial and business operations.
TEPCO desperately needs to lift its business performance to receive loans from the banks. The utility posted pretax losses for two straight years after the nuclear accident, due largely to increased fuel costs for thermal power generation to make up for lost capacity at its idle nuclear plants.
On Sept. 27, TEPCO President Naomi Hirose said his company is also preparing to apply to the NRA for safety screenings at other reactors to bring them back online.
But even after TEPCO receives the 80 billion yen in loans, the utility still faces hurdles; loans worth 200 billion yen come due in December, and the company is seeking to borrow 300 billion yen in additional loans.
Hirose on Sept. 27 asked for further government support in a Diet hearing called to discuss the problem of contaminated water leaking at the Fukushima plant.
“If the government embarks on a full-fledged effort to solve the problems that resulted from the nuclear accident, it would be a blessing for us,” said an executive of a major bank.
However, many insist that TEPCO’s creditors and shareholders should shoulder more of the responsibilities.
“It is illogical that taxpayers’ money is used to solve problems resulting from the nuclear accident,” Tetsuya Shiokawa, a lawmaker from the Japanese Communist Party, said in the Diet hearing. “There are other things that should be done before taxpayers’ money is spent.”