Geregu Power Bond Default Raises Fresh Concerns Over Nigeria’s Electricity Sector
Geregu Power Plc has defaulted on a bond payment, marking the first corporate bond default in Nigeria’s debt market in seven years and raising fresh concerns about the financial health of the power sector.
Geregu Power Plc, one of Nigeria’s leading listed electricity generation companies, has defaulted on its bond obligations, becoming the first corporate borrower in seven years to record such a failure in the country’s debt capital market.
The development comes at a sensitive time for Nigeria’s electricity industry, as regulators and policymakers continue efforts to strengthen the sector’s finances and restore investor confidence.
Data sourced by BusinessDay showed that FMDQ Securities Exchange updated the listing status of Geregu Power’s ₦40.09 billion Series 1 Senior Unsecured Bond to reflect a credit default covering its eighth semi-annual coupon payment and scheduled fourth principal bullet repayment.
Corporate bond defaults remain relatively rare in Nigeria’s debt capital market, particularly among large companies with investment-grade ratings.
Geregu’s bond, issued on July 28, 2022, at a fixed interest rate of 14.5 percent under the company’s ₦100 billion debt programme, was scheduled to mature in July 2029.
On its website, FMDQ Securities flagged the status of the Series 1 bond as “credit default in the 8th coupon payment and 4th bullet principal repayment.”
An investment-market source familiar with the sector described the development as unusual, noting that the immediate concern is whether the default represents a temporary liquidity challenge or points to deeper operational problems within the company.
The latest development is particularly significant because it comes shortly after Geregu’s annual general meeting in Abuja on June 30, where shareholders approved a dividend of ₦9 per share, compared with ₦8.50 the previous year.
With 2.5 billion shares outstanding, the dividend amounted to approximately ₦22.5 billion, representing an 82.5 percent payout ratio.
The payout is expected to attract renewed scrutiny from bond investors and analysts following the sharp deterioration in Geregu’s financial performance.
Abdul-Aziz Abubakar Yari, former Zamfara State governor and serving senator who chairs Geregu’s board, indirectly controls about 1.921 billion shares in the company. Based on the approved dividend, his estimated dividend income was approximately ₦17.2 billion.
Meanwhile, Geregu’s financial performance has weakened significantly.
For the six months ended June 2026, the company’s profit after tax plunged 88 percent to ₦2.5 billion, compared with ₦20.27 billion recorded during the corresponding period a year earlier.
Net profit margin also declined to 13.34 percent from 23.23 percent.
Revenue suffered an even sharper contraction, falling 78.7 percent to ₦18.65 billion from ₦87.63 billion in the same period of 2025.
The deterioration was particularly severe in the second quarter, when turnover collapsed to just ₦419.1 million from ₦55.87 billion a year earlier.
The sharp decline is consistent with a significant reduction in the company’s power-generation activity and has intensified questions about its ability to generate sufficient cash to meet its financial obligations.
The last comparable corporate bond default in Nigeria occurred on March 5, 2019, when Municipality Waste Management Contractors Limited, a private company promoted by Visionscape Sanitation Solutions Limited and linked to a Lagos waste-management concession, missed an initial coupon and principal payment of approximately ₦4.5 billion.
Geregu’s default therefore represents a significant development for Nigeria’s debt capital market, particularly given the company’s status as a listed power generator and its previous investment-grade credit ratings.
The immediate focus for investors will now be on the company’s liquidity position, the condition and operational performance of its power assets, and its ability to restore cash flow and meet outstanding bond obligations.
The development could also test investor confidence in Nigeria’s corporate bond market at a time when the government and regulators are seeking greater private-sector investment in critical infrastructure, including electricity generation.
