MANILA, Philippines – Three independent directors of Federico “Piki” Lopez-led First Gen Corporation (First Gen) defended their decision to support the Lopez power firm’s investments in two pumped-stored hydroelectric projects of Enrique Razon’s Prime Infrastructure Capital (Prime Infra). 

In a joint statement released to the media on Tuesday, June 16, by First Gen, Alicia Rita Morales, Edgar Chua, and Manuel Ayala insisted that they fulfilled their “fiduciary duties to First Gen by exercising objective and independent judgment in evaluating” the two projects, namely, the 600-megawatt (MW) Wawa Pumped Storage Hydroelectric (PSH) project in Rizal province and the 1,400-MW Pakil PSH in Laguna province.

Morales was elected independent director in May 2018 and is on her eighth term. Chua was elected independent director in May 2021 and is on his fifth term. Ayala was elected independent director in May 2025 and is only on his first term. 

“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,” the three independent board directors said. 

“We went over the projected earnings from the projects, and we are convinced that annual earnings from First Gen’s 33% stake in both PSH projects, estimated at P16 billion upon project completion, have solid basis.”

The two PSH projects are set to be completed by 2030. There will be no income from First Gen’s investments until the projects are up and running. 

The joint statement was issued after the Lopez family majority comprising 71% of ultimate Lopez family parent firm Lopez Inc. described the investments in Prime Infra as a “horrible” deal for First Gen since it meant paying Prime Infra P50 billion as “transaction premium” or an entry fee to join Prime Infra’s hydropower business. 

The Lopez majority, which is feuding with Piki Lopez, had also questioned whether First Gen’s independent directors had approved the deals with Prime Infra or were “properly disclosed to them.” 

They also asked whether the independent directors were given enough information to study the deals and “properly do their job in protecting the interest of the company and its shareholders.”

On the P50-billion transaction premium, the three independent directors said that at the time the investments were made, the two PSH projects had “already achieved significant development milestones at the cost of Prime Infra, which include achieving financial close, obtaining development rights and authorizations, securing offtake agreements, and commencement of construction.” 

“These milestones 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 premium recognizing the achievement of these milestones is a typical consideration in M&A [Mergers & Acquisitions] transactions, which is part of the acquisition cost,” they said. 

They also reiterated that the Change of Management Control provision requested by Prime Infra in the deals, which the Lopez majority calls “poison pill,” was a “relatively standard clause in contracts for energy infrastructure involving large investments.” 

“Lastly, we believe that the P61.87-billion valuation that First Gen and Prime Infra agreed upon in exchange for First Gen’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.

The three board directors concluded: “We, therefore, stand four-square behind our decision to support both projects, which all members of First Gen board unanimously approved.” 

For a more in-depth view on this topic, read former Rappler business editor Lala Rimando’s recently published article in the link below:

– Rappler.com

(Disclosure: First Gen independent director Manuel “Manny” Ayala is a founding member of the board of Rappler.)

Below are other articles on the Lopez family feud you may have missed:

• Debt, discipline, and daring: Inside the Lopez Group’s high-risk bets
• The Lopezes, presidents, and the cost of dissent
• Who writes the Lopez story? How lawyers, headlines, and ABS-CBN shape a family war
• How to make yourself very expensive to fire: The Lopez cousins’ war
• First Gen sat on a P23.5-billion Lopez clause for 60 days, then the family went to war
• From ‘king’ to ‘steward’: How Piki Lopez answered the Lopez family rift question
• [Vantage Point] First Gen shareholders need an antidote to a ‘poison pill’
• When the ASM has no election: What the Lopez family dispute means for every investor