Business

Tepco to get $11bn government aid after plan approval

Residents of Kawauchi village inside the no-go zone head home to collect their belongings
Image caption Radiation leaks had resulted in thousands of people being forced to evacuate the area around the plant

Tokyo Electric Power Company (Tepco) is to receive 900bn yen ($11.5bn; £7bn) in bailout funds after the government approved its business plan.

The funds are part of the government's bailout plan for Tepco, which has just reported a six month loss of 627bn yen.

The earthquake and tsunami in March damaged its Fukushima Daiichi nuclear plant, resulting in radiation leaks.

It may have to pay $100bn (£62bn) in compensation claims relating to those leaks.

About 80,000 people living with 20km (12 miles) of the Fukushima plant were forced to abandon their homes after the radiation leaks and many businesses were forced to shut down.

Tepco reported a net loss of 627bn yen for the six months from April to September, due to the costs of dealing with the crisis at Fukushima.

That figure compares with a net profit of 92.3bn yen in the same period last year.

'Thorough restructuring'

The losses, coupled with the huge compensation claims it faces, had raised concerns about the long-term prospects of the company, prompting the government to step in to bail out the company.

The government set up a special fund to help Tepco compensate the victims and maintain its operations.

However, the government had asked the company to submit a business plan indicating how it intended to turn around its fortunes, in order to receive the funding.

"I urge Tepco and the bailout fund to implement sincere compensation and thorough restructuring, taking into account that they are borrowing a massive amount of money from Japanese citizens," Japan's trade minister Yukio Edano said.

The company submitted its proposal last week, saying it would help it cut almost 2.5tn yen in costs over the next 10 years.

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