Toxic Assets - Nuclear Reactors in the 21st Century

Financing reactors and the Fukushima nuclear disaster

Publication - 12 June, 2012
This report looks at the March 2011 Fukushima nuclear disaster from an investors’ point of view. It identifies the long-known technological, management, governance and other institutional deficiencies that were instrumental in turning a predicted natural misfortune into a nuclear nightmare.

The owner of the Fukushima Daiichi plant, Tokyo Electric Power Company (TEPCO), lost 90% of its market capitalisation, had its bonds rated as junk and is currently in the process of being at least partly nationalised. Investors and financiers of nuclear utilities all over the world saw their investments eroded.

Had analysts and credit-rating agencies looked beyond short-term cash flows and paid attention to the many early warnings, they would have been able to save investors from major losses.

Nuclear power plants are potentially toxic assets for their investors and financiers. Quite uniquely, they can give rise to liabilities that can exceed their owner’s equity a hundred-fold or more. The probability of a devastating accident is around one major disaster in a decade based on the five core meltdowns since the 1950s, and this number does not even take into consideration the growing risks of ageing reactors.

Greenpeace worked on this report with BankTrack, who organised the background research paper that looked at who financed TEPCO before the Fukushima Daiichi nuclear disaster either through shares, bonds or loans.

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