By Christian Grimm and Monica Houston-Waesch

FRANKFURT--German atomic power utilities will need to pay the government 23.6 billion euros ($26.04 billion), plus interest, to finance the disposal of nuclear waste, according to a draft law viewed by Dow Jones Newswires.

The money, which can be paid in installments, will be funneled into a public state fund, releasing power companies from liabilities concerning nuclear waste.

Germany's four nuclear operators, E.ON SE (EOAN.XE), RWE AG (RWE.XE), EnBW Energie Baden-Wuerttemberg AG (EBK.XE) and Vattenfall Group would need to begin making cash payments into the fund Jan. 1, 2017. All payments must be completed by the end of 2026, according to the draft legislation.

Germany's cabinet is likely to sign off on the bill next Wednesday, allowing it to get parliamentary approval before the end of the year.

The draft legislation is closely geared to recommendations made by a special commission at the end of April. Initially, power companies had balked at the proposal's 35% risk premium above the costs calculated for waste disposal and were in talks with the government over the summer.

In September, E.ON Chief Executive Johannes Teyssen said the company would probably require capital measures to finance part of the EUR10 billion the company estimates it would need to contribute to the fund.

News of the draft law cheered investors who had been wary of the uncertainty surrounding the companies' nuclear legacies.

At 1430 GMT, RWE shares were trading up 4.9%, while E.ON SE shares were up 3.7%.

In 2011, after the disaster in Fukushima, Japan, Chancellor Angela Merkel accelerated the country's nuclear phase out, deciding to close all atomic power plants in the country by the end of 2022.

Write to Christian Grimm at christian.grimm@wsj.com and Monica Houston-Waesch at nikki.houston@wsj.com

(END) Dow Jones Newswires

October 14, 2016 11:06 ET (15:06 GMT)