” In a show of confidence, the nation’s top three banks and other financial organizations who have been funding embattled Tokyo Electric Power Co. have agreed to extend 280 billion yen ($2.26 billion) in loans to the utility for the fiscal year.
The entities concluded that TEPCO, the operator of the crippled Fukushima No. 1 nuclear power plant, has been successful in cutting costs.
The utility has secured a pretax profit and been in the black for two years in a row, even without the restart of its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture.
TEPCO plans on becoming a holding company in the next fiscal year comprised of three subsidiaries that will split its fuel supply and thermal power generation, electric power transmission, and electricity retailing into separate businesses.
Shareholders will vote on the plan at their meeting on June 25.
The banks and other lending institutions have expressed support for the plan, saying they believe the utility’s decision to separate its power generation and transmission businesses before its competitors do so will strengthen its ability to compete in the industry after power deregulation is introduced nationwide.
TEPCO had been asking the banks and other financial bodies for funding to help with debenture redemption and capital investments.
For the two years starting this fiscal year, it said it needs a total of 1.3 trillion yen to fund the projects. The company also plans in fiscal 2016 to issue its first debenture since the 2011 Great East Japan Earthquake and tsunami triggered the Fukushima nuclear disaster.
However, TEPCO has been unable to significantly improve its profitability without the restart of the Kashiwazaki-Kariwa nuclear power plant, as its ongoing cost-cutting efforts have limits. ”