Tepco to divert $7.2 billion from 10-year capex budget to Fukushima: sources

Reuters News
Posted: Nov 29, 2013 5:39 AM
Tepco to divert $7.2 billion from 10-year capex budget to Fukushima: sources

By Taro Fuse

TOKYO (Reuters) - The operator of the Fukushima nuclear plant plans to rechannel 740 billion yen ($7.24 billion) from its 10-year capital investment budget to address problems at the crippled facility such as a buildup of contaminated water, people involved in the matter said on Friday.

Tokyo Electric Power Co (Tepco) will also divert another 790 billion yen from the 6.6 trillion yen capital spending plan to invest in promising businesses and secure overseas resource supplies, the sources told Reuters on condition of anonymity.

A Tepco representative declined comment on the company's plans.

Tepco, which has posted more than $27 billion in net losses since the Fukushima plant was wrecked by the March 2011 earthquake and tsunami, is racing to revise its business revival plan by next month to meet a deadline set by its lenders.

People familiar with the matter said on Friday that Tepco's business plan will forecast profits that fall short of minimum levels set by its banks but that the lenders are likely to ease their lending conditions to allow fresh financing for the embattled utility.

Earlier this week, sources said Tepco expects to make a recurring profit between $1.5 billion and $2 billion annually for a 10-year period, assuming it can restart its biggest nuclear plant, Kashiwazaki Kariwa, which is on the Japan Sea Coast and was not damaged by the 2011 disaster.

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The diverted portion from the capital spending budget includes 750 billion yen for investments such as overseas power generation facilities, domestic coal-fired plants and gas-related energy businesses, the sources said.

The remaining 400 billion yen is slated for special operational purposes such as new safety measures at the Kashiwazaki Kariwa plant, which the company hopes to restart next year, and beefing up its power grid, the sources said.

(Additional reporting by Kentaro Hamada; Writing by William Mallard; Editing by Edmund Klamann)