Padang Ekspres net-Tokyo Electric Power Co. Executive Vice President Norio Tsuzumi, right, bows in apology to evacuees at a shelter in Tamura, Fukushima Prefecture, on Tuesday. The evacuees' homes are in neighborhoods around the quake-stricken nuclear power plant. (Tsuyoshi Shimoji)
Three of Japan's leading banks are planning to extend emergency loans worth more than 1 trillion yen ($12.3 billion) to Tokyo Electric Power Co. to help the utility tide over its difficulties stemming from the mega-earthquake and tsunami.
Sources said the Bank of Tokyo-Mitsubishi UFJ (BTMU), Sumitomo Mitsui Banking Corp. (SMBC) and Mizuho Corporate Bank are in the process of arranging the funding at TEPCO's request.
The funds will likely be made available as early as this month.
SMBC, Mizuho Corporate Bank and BTMU are considering loans of 600 billion yen, 500 billion yen and 300 billion yen, respectively.
TEPCO asked the banks for emergency lending last week because of the huge costs associated with repair work for the crippled nuclear power plant in Fukushima Prefecture as well as thermal power plants that were severely damaged in the Great East Japan Earthquake of March 11, the sources said.
The government is also preparing to extend loans via public financial institutions to help the utility weather the current severe power shortage as well as the crisis at the Fukushima No. 1 nuclear power plant.
TEPCO is expected to require more than 1 trillion yen for the repairs, purchase of heavy fuel oil for thermal power generation and other costs.
But there are concerns that it will not be able to raise sufficient funds by issuing corporate bonds, as it did before, due to a loss of credibility from the nuclear power plant accident.
Four major trust banks, along with Shinkin Central Bank, are also considering joining the move, bringing the total lending to possibly 2 trillion yen.
The government is preparing to help fund TEPCO's operations with crisis response loans.
To extend the low-interest loans, the government has to raise funds by issuing investment-and-loan bonds. It lends the money to the Japan Finance Corp., which in turn extends loans to businesses via the Development Bank of Japan, Shoko Chukin Bank and other institutions.
The bonds will be redeemed with the money repaid by the borrowers, but there is a possibility that taxpayer money may have to be tapped in case of a loss.
The government will lift the loan's ceiling of 2 billion yen per borrower so more funds can be extended to TEPCO and other businesses hard hit by the quake and tsunami.
The government is also planning to expand the total fund from the current 1.5 trillion yen to several trillion yen.
Meanwhile, TEPCO Executive Vice President Norio Tsuzumi on Tuesday offered the company's "sincere apologies" to about 600 residents of neighborhoods around the nuclear power plant who had been forced to evacuate to a gymnasium in Tamura city, in the prefecture, because of the risk of radiation exposure.
It was the first direct apology by a TEPCO executive to citizens forced to leave their homes within a 20-kilometer radius of the stricken plant.
Residents heard the apologies without fuss and asked the company to do its utmost to tackle the crisis so they can return to their homes soon.