MNRE Extends PM-KUSUM Financial Closure Deadline to 30 November 2026

The Ministry of New and Renewable Energy (MNRE) has given developers under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) two more months to tie up project finance. Through an order issued at the end of September 2026, the Ministry has extended the last date for achieving financial closure of projects under Component A and Component C from 30 September 2026 to 30 November 2026. The final completion deadline of 31 March 2027, however, has been left unchanged.

What the new order says

The financial closure deadline for Component A and Component C projects is now 30 November 2026.
The completion deadline remains 31 March 2027 for projects where the Power Purchase Agreement (PPA) was signed or the Notice to Proceed (NTP) was issued on or before 31 December 2025.
The Ministry has stated that no further extension of the completion timeline will be granted beyond 31 March 2027.

The decision follows representations from stakeholders about difficulties in reaching financial closure, chiefly delays in loan appraisal and sanction by lenders, along with other project development issues.

The components affected

PM-KUSUM, launched on 8 March 2019, has three components:

Component A: 10,000 MW of decentralised, grid-connected solar or other renewable power plants of 500 kW to 2 MW, set up on farmers’ land by individual farmers, groups, cooperatives, panchayats or Farmer Producer Organisations, with power sold to the DISCOM.
Component B: Installation of 14 lakh standalone solar agricultural pumps.
Component C: Solarisation of 35 lakh grid-connected agricultural pumps, through Individual Pump Solarisation (IPS) or Feeder Level Solarisation (FLS).

Components A and C are structured as grid-connected generation projects backed by PPAs and bank lending, which is why the financial closure milestone is decisive for them.

How the timeline evolved

The scheme was originally designed to add 30.8 GW of solar capacity by 2022. After pandemic-related disruptions, it was extended to 31 March 2026 with a revised target of 34,800 MW and total central financial support of ₹34,422 crore.

As the March 2026 sunset approached, developers and state agencies reported that banks could not complete lending within the remaining time. In March 2026, MNRE issued revised timelines after consulting the Department of Expenditure, which clarified that committed liabilities under the current scheme would be carried forward into the proposed PM-KUSUM 2.0. For projects with PPA or NTP on or before 31 December 2025:

Financial closure for Component A and Component C (FLS) was extended to 30 September 2026, with commissioning by 31 March 2027.
Commissioning for Component B and Component C (IPS) was set at 30 September 2026.

States were also asked to coordinate with banks and financial institutions to expedite lending.

The latest order shifts only the financial closure milestone. Because the completion date is fixed, developers who close financing in November will have roughly four months to complete construction and commissioning.

Where the scheme stands

According to MNRE’s year-end review for 2025, as on 30 November 2025:

Cumulative solar capacity under the scheme reached 10,203 MW, of which 6,515 MW (about 64%) was added during 2025.
Component A recorded 667.31 MW, including about 270.33 MW added in 2025.
Over 9.42 lakh standalone solar pumps had been installed under Component B.
Over 10.99 lakh grid-connected pumps had been solarised under Component C.
Expenditure in 2025 stood at ₹2,706 crore, about 38% of the total funds released since launch.

The pump-based components show clear momentum, while Component A remains well short of its 10,000 MW target. This gap explains why financing timelines have become the scheme’s central constraint.

Bridge to PM-KUSUM 2.0

MNRE held a stakeholder consultation on PM-KUSUM 2.0 with State Implementing Agencies on 11 September 2025, which concluded with consensus on the need for a technically robust, financially viable and farmer-centric framework for the next phase. In August 2026, the Ministry also invited comments on a draft specification for solar pump controllers, indicating technical upgrades ahead.

The current extension therefore works as a bridge, allowing projects already awarded under the first phase to reach completion while the next phase is finalised.

What it means for stakeholders

Developers: Two additional months to secure loan sanctions, but no relief on the completion date. Any further delay in financing now directly compresses construction time.
State Implementing Agencies and DISCOMs: Need to fast-track documentation, coordinate closely with lenders and align PPA timelines with the revised milestones where required.
Lenders: The speed of loan appraisal will largely determine how much awarded capacity is actually built.
Farmers: Timely commissioning secures the additional income and reliable daytime power for irrigation that the scheme is designed to deliver.

Conclusion

The November deadline offers short-term relief to a financing-constrained pipeline. With 31 March 2027 declared final, the coming months will decide how much of the awarded Component A and C capacity is commissioned under the current phase before PM-KUSUM 2.0 takes over.