Thursday, December 27, 2007

XL Tele......

I gave a call of XLTele at mmb @127 in Aug and it is now 523.
Well,more news are coming out.
Read on:
Hyderabad, Dec. 26 XL Telecom through its subsidiary Saptashva Solar Ltd has firmed up a forward integration project to establish grid connected ‘solar farms’ in Spain and Portugal with an investment of Rs 1,000 crore.
Basically a solar panel manufacturer, XL Telecom earlier this year diversified into solar cells and batteries as part of backward integration plan. The company is now looking at forward integration project that would make it a systems integrator and also generator of power, according to Mr Vasudeva Rao, Executive Director of XL Telecom.
This would help the company generate higher revenues through this value addition and also steady income. Mr Rao told Business Line that the Rs 1,000-crore project is designed to set up solar farms in Spain and Portugal as both these countries encourage establishment of these farms and banks and financial institutions and Government extend several subsidies.Funding mode
Of the Rs 1,000 crore, Rs 800 crore is being raised through debt from Spanish banks and the rest would be through XL Telecom equity, he said.
While the first farm of about 3 MW would be ready and operational by March 2008, the company expects to set up 28 MW of generation capacity by December 2008 and is targeting 200 MW in a couple of years.
Asked why Spain for solar farms?
Mr Rao said that this is among a few European countries which has grid connected solar farms and offers a much higher tariff for solar power. In addition, banks lend at attractive 5-6 per cent as against 11 per cent in India.
Typically, most conventional energy power projects have power purchase agreements for about 10-15 years, but these non-conventional energy farms would have PPA for 25 years. In addition, Governments in Spain and Portugal are also offering land at subsidised rates, making it quite attractive, he said.
“However, while we are now focussing on Spain, we would also look at other countries in Europe which are very aggressively promoting establishment of solar farms,” Mr Rao said.
Within a year of setting up plants, these farms could provide a return of about 20 per cent. XL Telecom recently concluded a FCCB issue of $40 million to part fund its 120-MW solar cell unit, and is currently on course to achieving revenues of Rs 650 crore during the fiscal.

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