What conditions does the Indian Renewable Energy Development Agency (IREDA) attach to loans under Component A and Component B of Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)?
For Component A, IREDA wants a power purchase agreement (PPA) with the distribution company (DISCOM) that outlasts its loan, and enough land at every location before disbursement. For Component B it drops the mortgage, may waive monitoring agencies, and asks for an end-use certificate and a reserve of two quarters of interest.
Component A: what IREDA asks for
- A PPA with the DISCOM, with a tenure longer than the IREDA loan tenure, should be available when the proposal is processed, or as a pre-commitment condition.
- Sufficient land should be available for each location before disbursement, as per the Reserve Bank of India (RBI) Project Finance Directions, 2025.
- Security follows the IREDA norms for solar projects. On government land, assignment of a land user fee agreement may also be considered, where applicable.
- Eligibility is as per IREDA's general financing norms. Minimum loan amount, promoter contribution, quantum of loan, moratorium and loan period follow the norms for solar projects.
- Interest follows the prevailing IREDA matrix for rooftop solar, wind, grid-connected solar, hybrid wind and solar, and floating solar. The solar rebates apply, plus a further interest rebate printed in the document.
Component B: what changes
- Eligibility follows the IREDA norms for project specific funding (PSF) loans. Minimum loan amount, promoter contribution and quantum of loan follow the norms for solar projects.
- Loan period and moratorium are decided case by case, from the project's cash flows and its debt service coverage ratio (DSCR).
- Securities follow the solar norms, except that the mortgage is not applicable.
- IREDA may appoint monitoring agencies and carry out site inspections. A monitoring agency may be waived where the DISCOM, the State implementation agency or the relevant government agency has created online project monitoring.
- An end-use certificate is obtained against project completion milestones set at appraisal.
- A no-objection certificate (NOC) is needed from existing working capital lenders, if there are any. Pre-sanction site visits are not mandatory.
- A debt service reserve account (DSRA) equal to the interest of two quarters, in step with disbursement, is obtained. Its timelines are set case by case.
Who the Component B borrower is
In the same document, PSF loans are short and medium-term loans for renewable energy and energy efficiency suppliers, contractors and manufacturers, tied to a specific project or contract. My reading, not a line in the document: under Component B the borrower IREDA has in mind is the supplier or contractor carrying out the pump contract, not the farmer who receives the pump. Confirm this with IREDA.
Individual pump solarisation under Component C
The document prints this as the same as Component B. It then adds a line saying a PPA with the DISCOM, with a tenure longer than the IREDA loan, should be available at processing. A PPA is an odd fit for a single pump, so ask IREDA whether that line applies to pump loans.
What to have ready
- Component A: a PPA whose tenure runs past the loan, and land papers for every location.
- Component B: a milestone plan, because the end-use certificate follows the milestones set at appraisal, plus an NOC from any working capital lender.
- Component B: find out whether the DISCOM or State agency runs online project monitoring, since that is what lets IREDA waive a monitoring agency.
Example: the reserve account for a Component B loan
- Interest for one quarter, an example figure: rupees (Rs) 5 lakh
- Reserve of two quarters: 2 x 5 = Rs 10 lakh, which is Rs 0.10 crore
The quarterly interest figure is a round example, not a rate and not tied to any loan size. The document says the reserve follows disbursement and its timelines are decided case by case.
What Senseible does here
Senseible reads fuel invoices and electricity bills into monthly records. It does not lend, and it does not prepare a lender's monitoring or completion papers.
- Feeder solar loan: the two cash tests
- Diesel pump to solar pump: emissions saved
- IREDA in-principle sanction letter
- Green loan schemes for MSMEs
Last reviewed 2026-11-05. The PM-KUSUM policy was amended on 9 December 2025 and IREDA reissues its norms often. Check the current issue before you apply. The document does not name what Component A and Component B fund, so this page does not either.