An Indonesian energy heavyweight is attempting to acquire a foothold in the Philippines.
"Barito Renewables wants to expand its presence in the country," a company spokesperson said. The talks are ongoing, and there is no guarantee a final deal gets done.
Barito Renewables is part of the Barito Pacific Group, a conglomerate with holdings in energy, mining, and infrastructure. The company's aggressive bid reflects its ambition to become a dominant player in Southeast Asia's renewable energy sector.
This potential acquisition comes amid a broader push for clean energy across the region. Geothermal power offers stable, baseload electricity with low emissions, and the Philippines is the world's third-largest geothermal producer. EDC's fields supply a significant portion of the nation's renewable capacity.
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Geothermal energy offers a consistent baseload power supply, contrasting with the intermittency of solar and wind. The Philippines' significant geothermal resources position it as a key market for investors seeking reliable clean energy. Barito Renewables' move for EDC highlights the growing strategic importance of geothermal in Southeast Asia's energy transition.
Barito's parent also has coal mining operations, which may raise questions about the group's environmental strategy, but its financial strength provides the resources needed for such a large deal. The involvement of institutional investors like Macquarie and GIC suggests that any transaction will be heavily scrutinized for favorable terms.
Meanwhile, Energy Development Corp. is one of the Philippines' largest geothermal producers, with a portfolio that includes some of the country's most significant geothermal fields.
First Gen has long been overseen by the Lopez family, which has supported EDC, and its stock decline this year may influence its willingness to sell.
Its parent, Barito Pacific Group, also has substantial interests in coal mining and infrastructure, providing financial backing for this bid. EDC's portfolio of significant geothermal fields makes it a valuable target in a region where renewable energy demand is rising.
As the third-largest geothermal producer globally, the Philippines has long attracted renewable energy investment. EDC's geothermal fields provide stable baseload power, complementing intermittent solar and wind.
This year has been tough for Barito Renewables. The steep decline in its share price - about 65% so far - reflects market doubts about its valuation and the coal exposure of its parent company. Yet its market capitalization remains around $25 billion, giving it ample capacity to finance this takeover attempt.
First Gen remains under the Lopez family's leadership.
The Lopez family's longstanding control of First Gen has been a defining feature of the Philippine energy landscape. Selling EDC would mark a significant shift, potentially opening the door for greater foreign investment in the country's geothermal sector. Given the region's rising clean energy demand, this deal could reshape competitive dynamics in Southeast Asian renewables.
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