Japan’s Ministry of Economy, Trade and Industry has announced a new initiative to ease access to public funding in the nuclear sector, with state-backed loans covering up to 30% of the total needed for long-term projects. This measure is intended to revive an industry largely stalled since the Fukushima disaster.
Since 2011, out of the 54 nuclear reactors Japan once operated, only 14 out of 33 technically available units have resumed service. The complexity of new safety standards and local opposition have slowed restarts, but several indicators point to a gradual recovery. Niigata Prefecture is expected to vote soon on restarting two of the seven reactors at the Kashiwazaki-Kariwa plant, the world’s largest nuclear facility.
A structured financial boost for operators
The proposed scheme adds to the existing decarbonisation support mechanism, which only allowed partial investment recovery. A ministry working group has suggested this support could go beyond 30% for large-scale projects. Public funding is expected to help operators upgrade safety systems or launch new reactor construction.
The need is significant. Japan aims to increase the share of nuclear energy in electricity production to 20% by 2040, up from around 10% today. To reach this target, an additional 15 to 16 reactors need to be restarted. This expansion is seen as essential to meet a projected 6% increase in electricity demand, driven notably by artificial intelligence data centres.
A favourable context despite constraints
Prime Minister Sanae Takaichi strongly supports nuclear development, aiming to reduce reliance on imported fossil fuels, which still generate 60% to 70% of the country’s electricity. Delays in offshore wind deployment, energy security priorities and climate goals are also fuelling nuclear momentum.
According to the World Nuclear Association, restarting a reactor costs between $700mn and $1bn, with Japan’s seismic safety standards likely pushing costs to the upper range. Public funding between 30% and 50% may be required to ensure economic feasibility.
Ageing fleet and financing of new builds
By 2050, about 14 gigawatts (GW) of nuclear capacity will reach the operational age limit of 60 years, highlighting the need for next-generation reactor development. So far, only Kansai Electric Power Co has announced a new reactor project, to be financed through bonds, loans and other instruments.
Building a 1 GW nuclear reactor in Japan is estimated to cost around $7bn. According to Wood Mackenzie, such large-scale projects typically seek to finance 50% to 80% of their cost through debt. Hideki Masui, President of the Japan Atomic Industrial Forum, noted that it takes up to 20 years to complete a nuclear project, with no revenue during that period.
Among the planned restarts, two 1.36 GW reactors at the Kashiwazaki-Kariwa site are expected to return to service in 2026 and around 2030. The Tomari-3 reactor operated by Hokkaido Electric Power Co has also received approval from the prefectural governor. Other units operated by Chubu Electric Power Co, Tohoku Electric Power Co and Hokuriku Electric Power Co are still awaiting regulatory decisions.
