M and B Switchgear of India has announced that it plans to enter the solar power generation business. The company is setting up a 2 MW solar plant in the Rajgarh district of Madhya Pradesh.

This plant will be financed through internal accruals and bank loans, and is expected to be operational by the end of 2011.

M and B has taken a bank loan of over $4.5m to finance the project. However, as the loan carries a high interest rate, experts have suggested that the margins on the investment may come under pressure.

The company also intends to add 4 MW of capacity to the solar plant after this, which it intends to fund through the proceeds of a proposed share issue.

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