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Fukushima Daiichi: Japan asks banks to help Tepco with loans

Fukushima Daiichi: the massive loan burden for Tokyo Electric Power Co and it's creditor after the Fukushima Daiichi disaster exceeded $23.4 billion. The Japanese government is asking other banks to help ease the burden despite risk in return.

By Sumio Ito and Kiyoshi TakenakaReuters / May 13, 2011

Fukushima Daiichi: Japanese Prime Minister Naoto Kan (r.), Economic and Fiscal Policy Minister Kaoru Yosano (c.) and Chief Cabinet Secretary Yukio Edano (l.) at Parliament's upper house in Tokyo on May 2. Parliament's $48 billion tsunami recovery budget only covers a fraction of the cost of what was the most expensive disaster ever. Mr. Edano asked banks to help with loans to Tepco, Friday.

Kyodo News/AP/File

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Japan's top government spokesman said on Friday he expects banks to be asked to help ease the burden faced by Tokyo Electric Power Co to cope with massive compensation claims from victims of the crisis at its Fukushima Daiichi nuclear plant.

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"The accident occurred on March 11. Accidents like this are factored into loans made prior to that. Naturally, I expect financial institutions to be asked for cooperation in light of Tokyo Electric's new financial standing," Chief Cabinet Secretary Yukio Edano told a regular news conference.

Edano's comment comes after the government agreed earlier on the day to set up a fund with taxpayer money to help Tokyo Electric compensate victims of the crisis at its tsunami-crippled nuclear plant and avoid financial collapse.

Tepco's main creditor bank, Sumitomo Mitsui Banking Corp, and other lenders provided Tokyo Electric with $23.4 billion in emergency loans in the immediate aftermath of the disasters.

"Loans extended to Tokyo Electric after the accident are different, and this must be known well among the Japanese people," Edano said, in response to a question about the possibility of some loans being forgiven.

"As for loans made before March 11, this is still a matter between private companies and I want to watch what I say. But, like you said, I don't think it (banks not forgiving any loans made before March 11) would win the people's understanding."

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