Demystifying PM KUSUM Component A: Land Leasing and Green Debt Syndication for Rural Developers

Unlocking Rural Solar Potential

The Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM KUSUM) scheme represents one of India’s most ambitious renewable energy policies, aiming to add over 30,000 MW of solar capacity in rural areas. Component A of the scheme focuses on setting up decentralized ground-mounted, grid-connected solar power plants with capacities ranging from 500 kW to 2 MW.

For rural developers, local agricultural cooperatives, and individual farmers, Component A offers a stable, high-yield opportunity to lease underutilized land and secure long-term power purchase agreements (PPAs) with state distribution companies (DISCOMs).

Key Land Leasing and Clearances Milestones

• Eligible Land: Ground-mounted installations can be established on barren, agricultural, or fallow lands. If agricultural land is used, it can be elevated to allow dual-use farming underneath.


• DISCOM Tender Allocations: Local state utilities issue tenders for capacity allocation. Bidders must secure land title deeds or long-term lease agreements (for a minimum of 25 years) before participating.


• Power Evacuation Approvals: Secure interconnection feasibility study approval from the nearest 33/11kV DISCOM substation, guaranteeing bay allocation.

Green Debt Syndication for Rural Assets

Securing project debt is often the highest hurdle for rural solar developers. Because PM KUSUM assets are smaller (0.5MW to 2MW), traditional underwriters apply high interest premiums or demand excessive collateral. At Renmatrix, we syndicate green debt by preparing compliant Detailed Project Reports (DPRs) that satisfy public sector banks, securing competitive interest margins and flexible DSCR metrics.