The Japanese government Monday approved Tokyo Electric Power Company Holdings¡¯ new business turnaround plan, including cuts of ?3.1 trillion ($20.2 billion) in costs over the decade from fiscal 2025.
Tepco said the cost cuts will be achieved through business streamlining, reduced investment and asset sales. It plans to sell about ?200 billion in assets, mainly shares and real estate, within three years.
The company will also seek tie-up partners possibly to accept external capital, with the aim of securing funds for investment to meet rising electricity demand from data centers.
The plan was devised as the utility faces massive costs related to compensation and reactor decommissioning following the 2011 triple meltdown at the Fukushima No. 1 nuclear power plant.
The company¡¯s earnings projections in the plan covers the 10 years from the current fiscal year ending in March.
Tepco forecasts a net loss of ?739.3 billion for the year but expects to return to profitability the next year with a net profit of ?256 billion, based on the assumption that the No. 6 reactor at the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture is restarted.
For the final year, which ends in March 2035, Tepco projects a net profit of ?299.8 billion.
¡°The plan will serve as a starting point for Tepco, now in an extremely difficult situation, to steadily push ahead with reforms in order to fulfill its responsibilities to Fukushima,¡± Hiroya Masuda, acting chair of the management committee of state-backed Nuclear Damage Compensation and Decommissioning Facilitation, Tepco¡¯s largest shareholder, told a news conference.
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