Extension of timeline for financial closure and completion of projects under PM KUSUM scheme – reg – EQ

Summary:

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### Context and Background

The Ministry of New and Renewable Energy issued this Office Memorandum to address concerns raised by various stakeholders, including project developers, state implementing agencies, and financial institutions. The primary challenge was that banks and financial institutions were hesitant to extend loans for projects under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) scheme because the existing timeline for commissioning was set to expire on March 31, 2026. Without an extension, projects that were in the pipeline faced the risk of being stalled or canceled due to lack of financing.

To resolve this, the Ministry consulted the Department of Expenditure (DOE), which provided guidance to subsume the existing projects under the new **PM KUSUM 2.0** scheme. This approach allows for a seamless transition and provides the necessary timeline relief while maintaining the continuity of the initiative.

### Key Provisions and Revised Timelines

The extension applies only to those projects where **Power Purchase Agreements (PPAs)** or **Notification for Tariff Proposals (NTPs)** were signed or issued on or before **December 31, 2025**. Based on this eligibility, the following revised deadlines have been established:

| Component | Description | Milestone | Revised Deadline |
|———–|————-|———–|——————|
| **Component A & C (FLS)** | Feeder Level Solarisation (FLS) under Components A and C | Financial Closure | **September 30, 2026** |
| **Component A & C (FLS)** | Feeder Level Solarisation (FLS) under Components A and C | Project Commissioning | **March 31, 2027** |
| **Component B & C (IPS)** | Individual Pump Sets (IPS) under Components B and C | Project Commissioning | **September 30, 2026** |

*Note: FLS refers to Feeder Level Solarisation, and IPS refers to Individual Pump Sets.*

### Points

1. **Transition to PM KUSUM 2.0 Framework**
Existing projects under the current PM KUSUM scheme will not be governed by the old scheme beyond the extended timelines. Instead, they will be subsumed into the newly launched **PM KUSUM 2.0**. Stakeholders must align their project documentation, compliance, and reporting requirements with the framework of the new scheme.

2. **Eligibility Window for Extension**
Only projects with PPAs or NTPs finalized on or before **December 31, 2025**, are eligible for the extended deadlines. Projects that did not achieve this milestone are not covered under this extension and will need to be evaluated separately under the new scheme.

3. **Financial Closure Priority**
For Components A and C (Feeder Level Solarisation), achieving **financial closure by September 30, 2026**, is a critical prerequisite. States are specifically directed to coordinate with banks and financial institutions to expedite loan approvals. This indicates that financing bottlenecks must be resolved well before the commissioning deadline to ensure timely project completion.

4. **Staggered Commissioning Deadlines**
– **Feeder Level Solarisation (Components A & C):** Projects have until **March 31, 2027**, for commissioning, providing a six-month window after financial closure to complete execution.
– **Individual Pump Sets (Components B & C):** A shorter extension is granted, with commissioning required by **September 30, 2026**, reflecting the comparatively simpler and faster implementation nature of standalone pump solarisation.

5. **Limited Flexibility Beyond Extended Timelines**
The memorandum explicitly states that any further extension beyond the newly prescribed deadlines will be granted **only on a case-to-case basis**. This signals a firm stance by the Ministry, emphasizing that the extended timelines are final for the majority of projects, and requests for additional delays will face high scrutiny.

6. **State-Level Accountability**
State Implementing Agencies (MDs, CEOs, Directors) are directed to ensure completion within the prescribed timelines. States are expected to proactively resolve coordination issues with banks, distribution companies (DISCOMs), and project developers to avoid last-minute implementation failures.

7. **Regulatory and Compliance Continuity**
Since the projects are being subsumed under PM KUSUM 2.0, stakeholders should anticipate continuity in regulatory oversight, with potential updates to reporting formats, subsidy disbursement mechanisms, and technical standards under the new scheme. Early engagement with state and central agencies is advised to ensure smooth transition.

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