Hyderabad-based XL Telecom & Energy Ltd is upbeat on the prospects of developing solar power projects in Europe. It very recently set up a 1.6-mw solar power plant at Majorca in Spain, making it the first Indian company to set up a solar project on foreign soil.
Speaking to Projectmonitor, K. Vasudeva Rao, Executive Director, XL Telecom & Energy Ltd, said that it marked the beginning of an eventual target of setting up 300-mw of solar power capacity in European countries, including Spain, Italy and France, among others.
The Majorca plant, set up with an investment of €9.5 million (around Rs 62 crore) is expected to generate revenues of €19 million in its initial life. The plant will be owned and operated by Saptashva Solar S.L., a wholly-owned subsidiary of XL incorporated in Spain. The new plant has also resulted in XL Telecom & Energy achieving full integration in the solar power business; from solar panels to modules to power generation.
Maintaining that Europe had a very high potential for solar power projects, Rao said that this was also matched by attractive incentives offered. In Spain, for instance, incentives for solar power generation could be as high as Rs 26 per kwh (Indian equivalent), he explained.
When asked if the current global slowdown would affect XL's fund raising for overseas projects, Rao said that the situation was not "that bad," albeit admitting that the pace of project implementation would depend on how quickly financial closure is achieved.
Besides setting up solar power plants through Saptashva, XL is also supplying solar panels to other solar power developers in Europe. As of March this year, XL's order book stood at Rs 675 crore, mainly catering to European countries. XL Telecom would be the EPC contractor for all solar power projects developed by Saptashva, besides undertaking the EPC works for other developers, Rao elaborated.
Discussing plans of developing solar power projects in India, Rao said that the current incentive scheme announced by the ministry for new and renewable energy for grid-connected solar power plants was not "very attractive" and also lacked clarity. "Our immediate focus would be the European market," he said.
To support the growing demand for solar panels, XL has invested $75 million in setting up a 120-mw solar cell manufacturing plant in Hyderabad, Andhra Pradesh. The plant is expected to operate at full capacity by December this year, Rao noted.