Nigerian power generating company Geregu Power Plc tapped Siemens Energy for three generator transformers to shore up operations at its flagship thermal facility, weeks after settling overdue debt obligations. The deal aims to protect electricity supply to Nigeria’s unstable national grid as the generating firm navigates a shakeup and tight balance sheet pressures.

A crucial plant overhaul

Under the contract, the European industrial group will handle the end-to-end design, manufacturing, testing and transport of units for the plant’s GT11, GT12, and GT13 generating bays. Technical crews from Geregu will supervise factory acceptance testing abroad before the machinery ships out to the plant site in Ajaokuta, Kogi State.

The upgrade shields the 435-megawatt gas plant from recurring equipment failures that regularly plague regional operators. Nigerian Sen. Abdulaziz Yari backed the procurement push to preserve grid connectivity and guarantee asset uptime. The facility relies entirely on three aging Siemens V94.2 gas turbines to feed electricity into the transmission network.

Defusing default risks

The capital expenditure lands directly after Geregu ended a tense, weeks-long default on its N40.09 billion ($29.7 million) Series 1 Senior Unsecured Bond. The utility disbursed N6 billion ($4.45 million) to settle overdue claims with creditors without issuing a public release, according to market sources familiar with the matter.

Mohammed Sani Jaoji assumed the acting chief executive role on Aug. 17, taking the corporate helm as the electricity generator grappled with sagging top-line revenue and ownership changes. His early days were defined by pressing cash demands, culminating in the quiet coupon payment that prevented an immediate showdown with institutional creditors.

Restructuring the debt load

Company directors said the board completed a thorough review and reconciliation of all outstanding obligations, supply arrangements, and operational liabilities. Geregu remains in talks with capital market regulators and financial advisers while trying to run the Ajaokuta plant profitably under heavy macro headwinds and currency fluctuations.

The cleared debt note stems from a N100 billion ($74.1 million) multi-instrument bond program launched on July 28, 2022. Yielding a 14.5 percent coupon rate, the paper matures in July 2029, leaving the company with multiyear servicing demands as it balances capital upkeep with investor payouts.