New Delhi-based Moser Baer India said today its photovoltaic unit would build a 1 to 5 megawatt solar farm in the western state of Rajasthan.

Moser Baer Photo Voltaic signed a memorandum of understanding for the $25 million project with the Rajasthan government.

Moser Baer said it was also evaluating options to set up other large solar farms across countries in the South Asian Association for Regional Cooperation, or SAARC. The group includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

"MBPV aims to redefine the paradigms of solar power generation through its world class manufacturing and multi technology capabilities and demonstrate a commercially viable, grid-connected PV energy system in India through this project," said Ravi Khanna, CEO of Moser Baer Photo Voltaic.

"This project is a pioneering initiative in that direction and we believe that the SAARC region provides huge opportunity for such large sized projects."

The company, which said it's looking at strategic tie-ups with leading, global solar companies and clean energy funds, plans to implement capacity of 500 megawatts by 2010 using a mix of crystalline silicon, concentrator and thin film technologies.