Tepco targets $20 billion in cost cuts over 10 years

TOKYO: Japanese utility Tokyo Electric Power (Tepco) said on Monday it aims to cut about 3.1 trillion yen ($20 billion) in costs over 10 years to fiscal 2034 through restructuring measures under a revised business plan.

The government has approved the plan, which calls for raising about 200 billion yen over the next three years by selling assets.

The company also intends to pursue alliances to advance reforms, saying it will seek partners capable of growing with it.

Tepco, the operator of the Fukushima Daiichi nuclear power plant which suffered one of the world’s worst nuclear disasters in 2011, faces mounting costs to decommission the plant, clean up surrounding areas and pay compensation.

It is borrowing government funds to cover costs related to the disaster.

Potential asset sales include equity stakes and real estate holdings.

The Nikkei newspaper has said it could sell shares in Kandenko, an electrical equipment and plant equipment company that is 46% owned by Tepco.

Tepco declined to comment on specific assets.

To meet growing demand to build data centres in Tokyo, Tepco said it wanted to strengthen its capabilities across the entire data centre development value chain by collaborating with operators specialising in securing suitable sites as well as manufacturers and construction companies.

The utility is targeting recurring profit of 342 billion yen in fiscal 2034, up from 135 billion yen in fiscal 2024.

That assumes the No.6 reactor at the Kashiwazaki-Kariwa nuclear power station will restart in fiscal 2025 and the No.7 unit will restart in fiscal 2029.

Tepco revises its business plan every few years, a process requiring government approval.

The latest plan marks the first revision in more than four years.

Tepco reduced its costs by 8 trillion yen and raised 1.1 trillion yen with asset sales between fiscal 2012 and 2024.