Japanese government approves $12.5bn bailout for TEPCO

The Japanese government approved a 1 trillion yen ($12.5 billion) bailout for Tokyo Electric Power Co. (TEPCO) and put it under temporary state control, according to Bloomberg Businessweek.

As part of the deal, TEPCO appointed new management and pledged to cut costs while raising utility rates as it attempts to stabilize the crippled Fukushima Daiichi nuclear power plant and compensate victims of the nuclear disaster.

A compensation fund was set up to pay for damages to victims affected by the disaster at Fukushima. Other nuclear power plant operators in Japan will make annual contributions to the fund. In August 2011, the government contributed $26 billion to the fund.

The deal with the government calls for TEPCO to make 3.3 trillion yen ($41.3 billion) in cost cuts over the next 10 years. The utility has already reportedly raised rates for its corporate customers and plans to do the same for households, the article said.

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