Is Indonesia's Bid for the Philippines' Largest Geothermal Company Really About Geothermal?

Indonesia's wealthy businessman Prajogo Pangestu has made an offer for the Philippines' largest geothermal producer, Energy Development Corporation (EDC). The bid, valued at over $5 billion, could be one of the largest renewable energy acquisitions in Southeast Asia. EDC's parent company, First Gen Corporation, which is managed by the Lopez family, confirmed that they have received the offer from Pangestu's PT Barito Renewables Energy Tbk company.

Although the offer was unsolicited, EDC's management stated that they are open to evaluating strategic offers. However, the more interesting question is whether this bid sends a message about Asia's energy transition and national energy security. Energy development has long occurred within national borders, but the increasing demand for electricity, industrial electrification, and expansion of data centers have raised the need for reliable low-carbon energy.

EDC is not just an energy producer, but also a company with experience in geothermal exploration, drilling, and operation. The Philippines is already one of the world's leading geothermal producers, but a significant amount of geothermal potential remains undeveloped. A similar situation exists in Indonesia, where Pangestu's Barito Renewables and Star Energy control the country's largest geothermal operator. Combining EDC under the same corporate umbrella would create an entity that combines geothermal assets and operational expertise in two of Asia's leading geothermal countries.

The Philippines wants to protect its own interests. Geothermal resources are considered natural resources under the Philippine Constitution and are subject to regulatory control regarding local ownership. Therefore, can additional capital be invested in geothermal development? Can local operations and employment be preserved? Can research activities be increased? Can the Philippines' energy security be strengthened? These questions should be asked by regulators and market observers.

Supporters of the bid may argue that larger regional companies are better positioned to finance expensive geothermal exploration and development. Critics may argue that strategic energy assets should remain under local control. Both arguments should be considered.

Source: CleanTechnica