“An estimated 218.2 billion yen ($2.06 billion) of taxpayers’ money will be needed to cover the interest on loans extended to Tokyo Electric Power Co. to deal with the Fukushima nuclear disaster.”
April 10, 2018
An estimated 218.2 billion yen ($2.06 billion) of taxpayers’ money will be needed to cover the interest on loans extended to Tokyo Electric Power Co. to deal with the Fukushima nuclear disaster.
The Board of Audit said TEPCO will require a maximum of 34 years to pay off loans totaling 13.5 trillion yen that were provided by financial institutions through the government.
The prediction was made based on an interest rate of 0.1 percent, but the rate could rise.
“The financial burden might increase,” a Board of Audit official said.
The government borrows funds from financial institutions and provides them to TEPCO effectively as interest-free loans via the Nuclear Damage Compensation and Decommissioning Facilitation Corp. Through the arrangement, the utility can pay compensation to evacuees of the accident at the Fukushima No. 1 nuclear plant and cover costs for decontamination and other procedures.
The ceiling for those funds was 9 trillion yen in 2013, but the limit was raised to 13.5 trillion yen by 2016.
Profits from TEPCO’s sales of its shares, as well as electricity fees collected by power companies across Japan, will be used to pay back the huge debt. But all interest payments will be covered with taxpayers’ money when the government repays the loans.
The Board of Audit estimates the TEPCO shares will be sold over a period from 19 to 34 years.
If the stock price rises, the loans will be repaid earlier, but a lower share price could lead to a delay in repayment.
During the repayment period, the government will have to pay 143.9 billion yen to 218.2 billion yen in interest, according to the forecast.
Another prediction put the amount of interest between 131.8 billion yen and 202.0 billion yen.
The Board of Audit in 2015 estimated the interest would total 126.4 billion yen.