The Republic's Energy Minister Pat Rabbitte is seeking approval for legislation enabling the disposal of the energy division of Bord Gais.
Half of proceeds from the sale will be used for "productive" economic development, Mr Rabbitte promised.
The Minister for Communications, Energy and Natural Resources revealed that the Irish government has learnt "the hard way" from the privatisation of Telecom Eireann, and therefore plans to hold on to the networks and distribution company of Bord Gais Eireann.
"The legislation I'm bringing to government for clearance is firstly to enable the disposal of Bord Gais energy divison but secondly to create a new company, the networks company, to distribute gas," he said.
While half of the proceeds of the sale of the energy division will be used to pay down the nation's debt, 50% will be made available for injection into the Irish economy for "productive purposes".
"We must demonstrate to the Troika that the funds will be used for productive purposes, to contribute to the expansion potential of the economy," he told RTE Radio's Morning Ireland.
"My own department, the Department of Finance and the Department of Public Expenditure will draw up those plans."
According to Mr Rabbitte, "there has been a healthy interest in this company which is not surprising given it's a company with revenues of about €1.5bn", but he declined to comment on the expected sale price or on the three companies reportedly involved in the bidding war.
The minister hopes to use the funds to "inject some stimulus into the country", particularly in the digital area.
Revenues generated by the energy division of Bord Gais