First Gen Corporation has secured financial backing from BDO Unibank, Inc. through standby letters of credit (SBLCs) totaling PHP 24.75 billion to support its acquisition of a 33% stake in Razon-led Prime Hydropower Energy, Inc. (PHEI), strengthening its position in large-scale renewable energy development.

In a disclosure dated April 17, First Gen said its wholly owned subsidiary, FGEN Aqua Power Holdings, Inc., now holds a one-third interest in PHEI, which is developing two major pumped storage hydro projects—the 600-megawatt Wawa facility and the 1,400-MW Pakil project.

The SBLCs—amounting to PHP 9.9 billion and PHP 14.85 billion—were issued by BDO under specific conditions tied to leadership continuity within the First Philippine Holdings (FPH) group, First Gen’s parent company.

Central to these conditions is the continued leadership of Federico R. Lopez (FRL), chairman and CEO of First Gen. The agreement defines multiple scenarios that would constitute a “Change of Management Control,” including Lopez stepping down as CEO, losing board representation, or a reduction in his family’s ownership stake in Lopez Inc.

Under the terms, any such change would trigger an Event of Default across the FPH group’s outstanding loans.

“BDO’s commitment terms are clear that maintaining the role of FRL in the FPH group is critical, such that replacing FRL will trigger defaults in the loan agreements of the FPH group,” the company said.

First Gen emphasized that the structure reflects lender confidence in Lopez’s leadership and its strategic importance to the group’s operations and financial stability.

What are the implications of lender-imposed leadership covenants on long-term energy investments and governance in the Philippines? Join the discussion.

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