XL Telecom, telecom and energy company, is all set to enter the Spanish power generation sector with a total investment of Rs 10 billion.

Saptashva Solar Ltd, company’s wholly owned subsidiary will make this investment.

The company has decided to establish a series of solar farms in Spain. But, initially it will establish solar farm with generation capacity of 28 mega watt (MW).

In a statement, the company said, “The medium term target is to install close to 200 MW of these farms in Spain and surrounding Portugal alone.”

The first solar farm, of 2.3 MW, would be implemented before March 2008 and the resting would be installed by the end of the year, the statement added.

The project is likely to have debt-equity ratio of 1:4, and would be financed through the local banking institutions. The project would also have a 25-year power purchase agreement (PPA) with the local power utility.

In the primary year of operations Rs 1 billion worth of power would be generated with 20 percent margins for the next 25 years, it said.

The shares of the company gained 5 percent, and marked their closure at Rs 528.80 on BSE, on Wednesday (26 Dec).