The target for the first year is 28 MW capacity. The medium-term target for the company is to install about 200 MW in the two countries.

XL Telecom, a solar photovoltaic panel manufacturer, also started producing solar cells and batteries. The company is now proposing to integrate its expertise by taking up power generation. Opportunities in other countries are also being explored with a view to making use of the benefits offered to go up the solar value chain.

The first year’s solar farms would have debt equity ratio of 1:4 and local banks in those countries would fund the projects. However, the company was not envisaging any dilution due to the proposed investment, said Dinesh Kumar, Managing Director, here on Wednesday.

The project would have a 25-year power purchase agreement with a local utility company. Mr. Kumar said the first full year’s operation would generate Rs. 1,000 crore (17.740 million euro) with 20 per cent margins in the next 25 years. The first solar farm of 2.3 MW would be implemented before March 2008 and the remaining before the end of the next calendar year.

Spain was targeting 1,200 MW from solar farms every year and was liberally providing the opportunity by supporting the investments in this segment with long-term leased land and subsidised interest rates on bank loans, he said.

The company secured orders for Rs. 2,635 crore for the supply of 16 MW solar panels to the European market and the order should be executed before June 2008. It had recently concluded its FCCB issue of $40 million to part fund its 120-MW solar cell unit, with a total expenditure of Rs. 3,000 crore.