First Gen independent directors back Prime Infra hydro deals

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June 17, 2026 | 12:00am

MANILA, Philippines — The independent directors of Lopez-led First Gen Corp. said they have properly discharged their duties in ensuring that the company’s hydropower deals with Prime Infrastructure Capital Inc. would benefit the company and its shareholders.

In a statement, First Gen’s independent directors, Alicia Rita Morales, Edgar Chua and Manuel Francisco Ayala, reiterated their earlier decision to support the company’s investments in two pumped-storage hydroelectric (PSH) projects by Prime Infra.

“We extend this reassurance that, as independent directors, we fulfilled our fiduciary duties to First Gen by exercising objective and independent judgment in evaluating the projects, identified as the 600-megawatt (MW) Wawa PSH in Rizal province and 1,400-MW Pakil PSH in Laguna,” the independent directors said.

“At the end of a thorough review process, we concluded that First Gen’s investment in both PSH projects will benefit First Gen and its stockholders,” they said.

Last week, the Lopez family majority said they wanted to know whether the First Gen board, especially its independent members, was given enough information in advance to study them and properly perform their duties in protecting the interest of the company and its shareholders.

First Gen’s independent directors said they reviewed the projected earnings from the projects and noted that they are convinced that annual earnings from the company’s 33-percent stake in both PSH projects, estimated at P16 billion upon project completion, have a solid basis.

Further, they said the projects with a combined capacity of 2,000 MW would likewise help ensure the security of the country’s power grid and reduce its reliance on imported fossil fuels. At the same time, the projects are also seen as helping the country reduce its carbon emissions.

“In short, these projects benefit not just First Gen stockholders but other stakeholders, including ordinary consumers. We cannot fail to mention that these projects have been amply recognized as energy projects of national significance by the government,” they said.

The independent directors likewise said that the premium recognizing the achievement of the projects’ development milestones is a typical consideration in merger and acquisition transactions, which is part of the acquisition cost.

They said that at the time of the acquisition, the PSH projects had already achieved significant development milestones including financial close, obtaining development rights and authorizations, securing offtake agreements and commencement of construction.

These milestones, they said, have effectively reduced the risks typical of large-scale infrastructure investments such that First Gen was willing to invest in the projects at the agreed valuation.

The Lopez family majority led by Gabby Lopez earlier accused First Gen chairman and CEO Federico “Piki” Lopez of committing “a horrible deal” after agreeing to pay Prime Infra P50 billion as transaction premium and P25 billion as construction equity in First Gen’s P75-billion deal to buy 40 percent of Prime’s hydropower business.

The independent directors also justified the so-called poison pills or change-of-management-control provisions requested by Prime Infra to be included in the relevant project agreements, saying that they are a relatively standard clause in contracts for energy infrastructure involving large investments.

They said “this was a reasonable stipulation to ensure that the projects are backed by the technical expertise and operational track record necessary for a successful implementation.”

Morales, Chua and Ayala said they also believe that the P61.87-billion valuation that First Gen and Prime Infra agreed upon in exchange for the former’s 33-percent ownership in the PSH projects represents “an equitable and justifiable consideration for the long years and substantial resources that Prime Infra earlier devoted to complete development activities and remove major risk and hurdles to the PSH projects.”

“We, therefore, stand four-square behind our decision to support both projects, which all members of the First Gen board unanimously approved,” they said.