First Gen Corp. has clarified that the controversial "key man" provision in its hydropower partnership with Prime Infrastructure Capital Inc. was initiated by Prime Infra, not by First Gen's management. The clause, which has drawn scrutiny amid an ongoing leadership dispute within the Lopez family, is described as a standard safeguard in major energy contracts.
In a statement, the Lopez-led energy firm explained that the change of management control (CMC) clause—sometimes labeled a "poison pill"—reflects Prime Infra's need to ensure continuity for two critical pumped storage hydro projects. These include the 600-megawatt Wawa facility in Rizal and the 1,400-megawatt Pakil project in Laguna.
Prime Infra specifically identified First Gen chair and CEO Federico "Piki" Lopez and his team as essential "key men" for project delivery. The provision outlines triggers that could activate the clause, such as Piki's removal from leadership roles, board positions, or voting control. If triggered during construction or up to one year after operations begin, Prime Infra could require First Gen to sell its stake at a discounted rate.
"The inclusion of the clause signals Prime Infra's confidence in Piki's leadership and track record in executing complex energy projects," First Gen emphasized.
The clarification comes as tensions within the Lopez family escalate, with majority stakeholders in Lopez Inc. questioning deal provisions they claim could expose the group to approximately ₱23 billion in potential losses. First Gen maintains the clause is a customary risk-mitigation tool, not an extraordinary condition imposed by its leadership.