Prime Infra, not Piki Lopez, requested standard ‘Key Man’ provisions in hydro deals

First Gen Corporation clarifies the Change of Management Control (CMC) provisions in its agreements with Prime Infrastructure Capital, Inc. (Prime Infra), for the development of two critical Prime Infra hydro power projects.

The CMC provision, which some quarters call a “poison pill,” serves as a significant protection mechanism for a business partner. It is recognized as a relatively standard provision often in contracts for projects in industries such as energy and infrastructure which involve huge investments.

The provision is also known as the “Key Man Clause,” because the success of projects under contracts with this provision depends heavily on the competence, relationships or reputation of certain individuals --- the key men --- whose continued active involvement is deemed essential by the party requesting the clause.

In the case of First Gen’s agreement with Prime Infra subsidiary Prime Hydropower Energy Inc. (PHEI), it is First Gen Chairman and CEO Federico “Piki” R. Lopez or FRL and his designees that Prime Infra recognizes as people from First Gen who play these key men roles.

FRL and his team will help assure the joint development with PHEI of 2,000 megawatts of capacity in two pumped storage hydro projects --- the 600-MW Wawa in Rizal and 1,400-MW Pakil in Laguna.

As confirmed by a First Gen disclosure to the Philippine Stock Exchange last April 14, a CMC will occur in the following six instances:

• FRL or his designee is not the CEO of First Gen; or
• the members of the First Gen’s Executive Committee cease to be FRL designees; or
• FRL is not the proxy of First Gen entitled to vote all of First Gen's shares in the hydro project companies;
• FRL is not a director of First Philippine Holdings Corporation; or
• Designees of FRL no longer constitute at least a majority of the members of First Gen’s board; or
​• FRL or his designees are not First Gen Directors in PHEI.

If a CMC with respect to First Gen occurs during the construction period of the Wawa and Pakil projects and until the first anniversary of their commercial operations date, Prime Infra shall have the right to cause First Gen to sell its PHEI shares to Prime Infra at a discount.

It was not First Gen but Prime Infra that requested the inclusion of the CMC or Key Man provisions.

Prime Infra’s request for inclusion of the CMC provisions shows the level of trust and confidence that Prime Infra has in FRL and his management team.

This reaffirms Prime Infra’s earlier statement in early February 2026, when it highlighted the importance of forging a partnership with First Gen in developing the two hydro projects of PHEI.

Prime Infra described First Gen as a “seasoned local energy player” and a “trusted partner with a strong track record in power generation.” Prime Infra said that First Gen’s track record will “help execute these critical energy projects safely, efficiently and on schedule.”

Under the leadership of FRL, First Gen also has consistently proven profitability with its earnings exceeding P100 billion during the past five years.