Kepco needs $1.7 billion loan

• 12 years ago (2011-09-28)
• David Flin

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Kansai Electric Power Co (Kepco) has said that it plans to borrow $1.7 billion to pay the higher costs of thermal power generation, which has increased with the lack of availability of its nuclear plants pending Japan’s safety review.

Kepco said that it expects to borrow $400 million from the Bank of Tokyo-Miysubishi UFJ in September, the same amount from Sumitomo Mitsui Banking Corp in October, and the remaining $900 million from trust banks and life insurers.

Kepco has been forced to increase thermal electricity production as seven of its 11 nuclear reactors remain idle following the Fukushima disaster. The suspension of its reactors will impose additional costs of Ɏ500-600 billion on the company, according to estimates by financial institutions.

Sources said that in addition to fuel purchases, the borrowings will be used to repay corporate bonds that are falling due. The sources also said that because it is not known yet when – or even whether – its nuclear facilities will be reactivated, Kepco believes that it will have to raise hundreds of billions of yen in additional money, and is negotiating loans from the government-controlled Development Bank of Japan and major commercial banks.