January 23, 2012 / 10:09 PM / in 6 years

UPDATE 1-Japan to double guarantee on loans to Tepco - Nikkei

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Jan 24 (Reuters) - Japan decided on Monday to double its repayment guarantees on private-sector banks’ loans to the state-backed nuclear accident compensation fund to up to 4 trillion yen ($51.94 billion) next fiscal, The Nikkei business daily reported.

The Nuclear Damage Liability Facilitation Fund is considering injecting around 1 trillion yen into Tokyo Electric Power Co as early as this summer, effectively nationalizing the operator of the crippled Fukushima Daiichi nuclear plant, the newspaper said.

The fund intends to borrow the required funds from private-sector lenders, and the government guarantees will allow it to do so at lower interest rates, the daily said.

The Ministry of Economy, Trade and Industry, which oversees the compensation fund, had pushed for a 5 trillion yen guarantee for fiscal 2012, but the figure was brought down to 4 trillion yen by the Finance Ministry, The Nikkei said.

Set up in September, the fund secured a maximum of 2 trillion yen in guarantees for the first six months. The amount was doubled for fiscal 2012 to ensure it could operate for the full year. ($1 = 77.0100 Japanese yen) (Reporting by Ashutosh Pandey in Bangalore; Editing by Roshni Menon)

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