Japan approves fresh $8.9 billion in aid to Fukushima nuclear plant

Japan today approved a fresh $8.9 billion in aid for the operator of the Fukushima nuclear plant as the company said it expected losses of a similar amount this year.

The decision would allow TEPCO to stay solvent, but it will continue to run up costs as it struggles to clean up the mess from the reactor meltdowns and arrange for compensation claims following the 11 March quake and the nuclear crisis that followed.

The ¥690 billion aid package was announced after Tokyo Electric Power revised its estimate of the amount that would be needed to compensate victims of the worst nuclear accident in a generation, from ¥ 1.01 trillion to ¥1.7 trillion.

The new government infudeion would come in addition to the ¥890 billion yen in aid that it had already agreed to extend to the troubled utility, making a total ¥1.58 trillion. The company would need to find other sources of cash to plug the gap.

Announcing its earnings forecast for the year to March, TEPCO said today it expected to lose ¥695 billion yen, worse than its previous forecast of a ¥600 billion shortfall due to the expanded compensation.

TEPCO hiked the estimate of the amount of money that would be needed following the government widening the eligibility criteria for claimants and altering the evacuation zone restrictions around the stricken Fukushima Daiichi nuclear plant.