Philippines sold state geothermal giant PNOC-EDC in 2007 for P58.5bn to the Lopezes

PNOC Energy Development Corporation, the geothermal arm of state-run Philippine National Oil Company, was created in 1976 under presidential decree as the country's geothermal exploration and development arm, and ran major steam fields including Tongonan, Palinpinon and BacMan.

Under the power-reform law the government put EDC up for sale. The attempt slipped from 2005 into late 2006, when EDC ran an initial public offering on the Philippine Stock Exchange: 4.5 to 5.2 billion shares at P3.20 each, the top of the range, raising at least P14.4 billion, with a tenth of shares set aside for small investors.

On 22 November 2007 the government awarded its remaining 60% to a Lopez-led consortium - First Gen, Dutch Spalmare Holdings (a vehicle of Iceland's Reykjavik Energy Investments) and Prime Terracota - for P58.5 billion, beating the Gotianun-led FDC Geo-Energy bid of P48.52 billion backed by AES. The Finance department expected to net P47 billion, with part of the proceeds funding exploration at parent PNOC.

The purchase lifted First Gen's total generating capacity to around 3,000 MW and handed the Lopez group control of the country's dominant geothermal producer through a listed vehicle.

IPO raised P14.4bn in Dec 2006 (P3.20/share, 4.5-5.2bn shares); the 60% auction drew P58.5bn, about P10bn above the runner-up; First Gen capacity reached ~3,000MW.

The two-step design - IPO first, control auction second - let the public participate while leaving the prize with whoever paid most.

EPIRA mandated the sale of generation assets, so the department of finance had both legal cover and a fiscal target.

Competing tycoon groups with foreign partners (AES, Reykjavik Energy) bid the price up about a fifth above the runner-up.

EDC's operating plants meant bidders were buying cash flows, not promises - the opposite of most power-privatization white elephants.

Sell the crown jewel while it shines: a functioning profit-maker drew a competitive auction and a premium price, turning a state company into the anchor of a listed private group.

EDC became the geothermal backbone of First Gen's clean-energy portfolio and kept developing its fields: it took over the Tongonan and Palinpinon plants in 2009-2010 and had the BacMan complex fully operational by 2014. The sale remains the reference transaction of the Philippine power privatization programme, and EDC's share price made the retail tranche of the 2006 IPO a national investing story.