CAMP FOSTER, Okinawa — The Japanese government on Wednesday earmarked $420 million for utility upgrades that could pave the way for moving U.S. Marines from Okinawa to Guam.

The money is slated for Guam wastewater, power and water utility improvements that would allow military construction to start on the island and eventually support 8,600 Marines who will be transferred from Okinawa.

The funding is part of a total of $740 million that Japan has agreed to pay for the upgrades and is included in a draft version of its national budget for 2011 put together by the Diet this week. The budget must still be approved by Prime Minister Naoto Kan, who is expected to sign off on it before the end of the year.

The U.S. has called the utility funding a crucial first step that was needed before construction efforts could begin next year. The Guam Joint Program Office, which manages the military buildup on the island territory, was not available to comment on the funding decision Thursday.

Guam has substandard utilities that often suffer water and electricity outages that could make the planned buildup difficult.

A piece of the Japan utility funding will pay to tap wells on military land and connect the supplies to Guam public water utilities, according to Gen. David Bice, former director of the joint office, who spoke to Stars and Stripes earlier this year.

It will also pay for upgrades to substandard sewage treatment facilities on Guam, said Paul Shintaku, executive director of the Guam Buildup Office.

“The U.S. EPA says nothing happens without these [sewer] upgrades,” Shintaku said Thursday.

It was unclear Thursday whether the money budgeted by Japan would be a loan to Guam.

Japan has agreed to contribute a total of more than $6 billion in funding, investments and loans to the Guam buildup, which is designed to reduce the number of U.S. forces on Okinawa and relieve the island from shouldering the majority of military bases and personnel in Japan.

Japanese government officials could not be reached for comment Thursday due to a national holiday.

Guam has strongly opposed any requirements that it pay back utility loans and interest related to military buildup construction, Shintaku said.

“I don’t think that’s what folks here were thinking, that we would pay back interest,” he said. “There is some confusion.”

Simon Sanchez, chairman of the Guam Consolidated Utilities Commission, said Thursday that the Department of Defense and the government of Japan are still negotiating the terms of the funding, which could come in the form of a loan from the Japanese Bank of International Cooperation.

“We should know something more after the New Year,” he said.

The money budgeted Wednesday will be some of the first major Japanese funding of the military realignment, including $497.8 million Japan agreed to pay in September for military construction on Guam.

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