XL Telecom forays into Power Sector

Thebullishtrends: XL Telecom shares are trading at Rs.519. XL Telecom & Energy Ltd has decided to enter into POWER GENERATION SEGMENT with initial investments in Spain, the current global destination for Grid Connected Solar Energy.

Saptashva Solar Ltd, a wholly owned subsidiary of the Company will establish a series of "Solar Farms" for Power Generation 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".

The solar farms proposed to be established in the first year would require a total investment of about Euro 168 Million or Rs 10 Billion. The project is expected to have debt equity ratio of 1:4 and would largely get funded by local banks. As the investments are being made in the wholly owned subsidiary of XL Telecom & Energy Ltd, the Company do not envisaging any dilution in the parent Company on account of this investment.

Spain offers significant opportunities in Solar Power Generations with its target of about 1,200 MW solar farms every year. Spain Government supports the investments in Solar by offering land on a long lease basis and also subsidized long term Bank loans.