Lopez Family-led First Gen Corp. (FGEN) has secured a massive P24.75 billion in standby credit support from the Sy Family’s BDO Unibank, Inc. to back its investment in pumped storage hydropower projects.
FGEN said Friday that BDO issued standby letters of credit (SBLCs) of P9.9 billion and P14.85 billion to support its acquisition of a 33 percent stake in Prime Hydropower Energy, Inc. (PHEI), through its wholly owned subsidiary FGEN Aqua Power Holdings, Inc.
The investment is part of a scaled-down P61.875 billion deal with Enrique Razon Jr.’s Prime Infrastructure.
PHEI, which will own the assets after restructuring, is developing two major projects: the 1,400-megawatt (MW) Pakil pumped storage project in Laguna and the 600-MW Wawa project in Rizal.
However, FGEN noted that the SBLCs come with conditions set by BDO to ensure leadership stability across the First Philippine Holdings (FPH) group. This means a major leadership change, particularly involving CEO Federico R. Lopez and his key executives, could trigger a default on the group’s existing loans.
The company added that the arrangement “demonstrates the bank’s recognition that the continued active involvement of Federico R. Lopez in the FPH group is necessary, vital, and indispensable.”