Mumbai: XL Telecom & Energy Ltd said on Wednesday it has decided to enter the power generation sector with an investment of Rs1,000 crore on a solar farm in Spain.
The investment will be made through its wholly owned subsidiary, Saptashva Solar Ltd. The company plans to set up a series of solar farms in Spain with a generation capacity of 28 mega watt in the first year.
“The medium term target is to instal close to 200 MW of these farms in Spain and surrounding Portugal alone,” it said in its statement. The first solar farm, of 2.3 MW, would come up before March 2008 and the remaining by the end of the year, it added.
The project would have a debt-equity ratio of 1:4 and would be mostly funded by local banks, it said. It would also have a 25-year power purchase agreement with the local utility company.
In the first year of operations Rs100 crore worth of power would be generated with 20% margins for the next 25 years, it said.
Shares in XL were trading up 2.8% at Rs518 in a firm Mumbai market.