Tepco to get $11bn government aid after plan approval

Residents of Kawauchi village inside the no-go zone head home to collect their belongings Radiation leaks had resulted in thousands of people being forced to evacuate the area around the plant
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Tokyo Electric Power Company (Tepco) is set to receive 900bn yen ($11.5bn; £7bn) in bailout funds after the government approved its business plan.

The funds are a part of the government's bailout plan for Tepco, which is expected to make a loss of 576bn yen this year.

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

It may have to pay $100bn in compensation claims due 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.
'Thorough restructuring'
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“Start Quote

I urge Tepco and the bailout fund to implement sincere compensation and thorough restructuring”

End Quote Yukio Edano Trade minister, Japan

The projected losses for the current financial year have further added to Tepco's troubles. The company had reported a loss of 1.26tn yen for the financial year ending 31 March.

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 a bid to bailout 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 indented 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 had submitted its proposal last week which it said will help it cut almost 2.5tn yen in costs over the next ten years.

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