Government Allows a Final Extension for Solar Projects Under KUSUM Program

Projects that miss the extended deadline will be withdrawn


The Ministry of New and Renewable Energy (MNRE) has granted a final extension to solar projects pending installation under Component A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program to September 30, 2023, citing the difficulties faced by farmers in accessing finances during the initial phase.

However, the extension will only include projects where the beneficiary has reported financial closure to the state implementation agencies on or before March 31, 2023. For projects which miss the extended deadline, the balance capacity will be withdrawn and reallocated to the states based on fresh proposals.

The final extension covers projects approved by the MNRE under Component A of the PM KUSUM program during the financial year 2019-20.

Under this component, renewable energy-based power plants of a capacity of 500 kW to 2 MW are to be set up by individual farmers, groups of farmers, and panchayats on barren land.

In its official memorandum, the ministry said that under the program, various loans were only recently granted to farmers, and most of them are still under process, making it difficult for the farmers to commission these projects on time.

India, an agricultural powerhouse, through these programs, intends to engage its farmers in the energy industry and utilize the vast landmass for renewable energy installations.

The MNRE had previously granted an extension up to December 31, 2022, due to the constraints in accessing finances owing to the impact of the COVID-19 pandemic on lenders.

In May last year, in order to support the projects under the KUSUM program, the MNRE scrapped the need for a separate performance bank guarantee for solar projects to be set up under Component A of the program.

Per the amended guidelines, developers must submit an earnest money deposit (EMD) of ₹100,000 (~$1,210) in the form of a bank guarantee with the expression of interest. Once a developer wins the bids, the EMD will be converted into a performance bank guarantee.

Union minister of Power and New and Renewable Energy, R K Singh, while addressing world ministers at the 53rd World Economic Forum (WEF) annual meeting in Davos, highlighted India’s efforts towards pushing clean energy use in farming.

According to Mercom’s India Solar Tender Tracker, 3.58 GW of solar project capacity has been tendered under Component A of the KUSUM program.


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