New Delhi, Dec 26: XL Telecom and Energy Ltd today said it will foray into power generation sector with an investment of Rs 10 billion on a solar farm in Spain. The investment would be through company's wholly-owned subsidiary Saptashva Solar Ltd XL Telecom plans to set up a series of solar farms in Spain with a target for the first year of about 28 MW capacity.

The medium term target is to install close to 200 MW of these farms in Spain and surrounding Portugal alone. Other countries are also being explored for establishing such farms to avail of the benefits offered and to go up the solar value chain, a company statement said.The project is expected to have debt equity ratio of 1:4 and would largely get funded by local banks. It would also have a 25-year power purchase agreement with the local utility company.

In the first year of operations Rs One billion of power would be generated with 20 per cent margins for the next 25 years, it said.

UNI