Using an embedded Apache MINA SSHD server in a unit test to verify that your code is able to upload a file through SFTP. This unit tests uses JSch as the client to speak to an embedded Apache MINA sftp server and verifies that the upload of a text file was successful.

pom.xml

    <dependency>
      <groupId>org.apache.sshd</groupId>
      <artifactId>sshd-sftp</artifactId>
      <version>0.9.0</version>
      <scope>test</scope>
    </dependency>
    
    <dependency>
      <groupId>org.vngx</groupId>
      <artifactId>vngx-jsch</artifactId>
      <version>0.10</version>
    </dependency>
    
    <dependency>
      <groupId>org.apache.commons</groupId>
      <artifactId>commons-lang3</artifactId>
      <version>3.1</version>
    </dependency>
    
    <dependency>
      <groupId>commons-io</groupId>
      <artifactId>commons-io</artifactId>
      <version>2.4</version>
    </dependency>
    
    <dependency>
      <groupId>junit</groupId>
      <artifactId>junit</artifactId>
      <version>4.11</version>
      <scope>test</scope>
    </dependency>
    
    <dependency>
      <groupId>org.hamcrest</groupId>
      <artifactId>hamcrest-all</artifactId>
      <version>1.3</version>
      <scope>test</scope>
    </dependency>

SftpServiceTest.java

import static org.hamcrest.MatcherAssert.assertThat;
import static org.hamcrest.Matchers.equalTo;

import java.io.File;
import java.io.IOException;
import java.io.OutputStream;
import java.nio.charset.StandardCharsets;
import java.util.Arrays;

import org.apache.commons.io.IOUtils;
import org.apache.commons.lang3.StringUtils;
import org.apache.sshd.SshServer;
import org.apache.sshd.common.NamedFactory;
import org.apache.sshd.common.Session;
import org.apache.sshd.common.file.FileSystemView;
import org.apache.sshd.common.file.nativefs.NativeFileSystemFactory;
import org.apache.sshd.common.file.nativefs.NativeFileSystemView;
import org.apache.sshd.server.Command;
import org.apache.sshd.server.PasswordAuthenticator;
import org.apache.sshd.server.command.ScpCommandFactory;
import org.apache.sshd.server.keyprovider.SimpleGeneratorHostKeyProvider;
import org.apache.sshd.server.session.ServerSession;
import org.apache.sshd.sftp.subsystem.SftpSubsystem;
import org.junit.After;
import org.junit.Before;
import org.junit.Rule;
import org.junit.Test;
import org.junit.rules.TemporaryFolder;
import org.vngx.jsch.ChannelSftp;
import org.vngx.jsch.ChannelType;
import org.vngx.jsch.JSch;
import org.vngx.jsch.config.SessionConfig;

public class SftpServiceTest {

    @Rule
    public TemporaryFolder testFolder = new TemporaryFolder();
    
    private static final String USERNAME = "username";
    
    private static final String PASSWORD = "password";
    
    private SshServer sshd;
    
    @Before
    public void prepare() throws IOException {
        setupSSHServer();
    }

    private void setupSSHServer() throws IOException {
        sshd = SshServer.setUpDefaultServer();
        sshd.setFileSystemFactory(new NativeFileSystemFactory() {
            @Override
            public FileSystemView createFileSystemView(final Session session) {
                return new NativeFileSystemView(session.getUsername(), false) {
                    @Override
                    public String getVirtualUserDir() {
                        return testFolder.getRoot().getAbsolutePath();
                    }
                };
            };
        });
        sshd.setPort(8001);
        sshd.setSubsystemFactories(Arrays.<NamedFactory<Command>>asList(new SftpSubsystem.Factory()));
        sshd.setCommandFactory(new ScpCommandFactory());
        sshd.setKeyPairProvider(new SimpleGeneratorHostKeyProvider(testFolder.newFile("hostkey.ser").getAbsolutePath()));
        sshd.setPasswordAuthenticator(new PasswordAuthenticator() {
            @Override
            public boolean authenticate(final String username, final String password, final ServerSession session) {
                return StringUtils.equals(username, USERNAME) && StringUtils.equals(password, PASSWORD);
            }
        });
        sshd.start();
    }
    
    @Test
    public void testUploadingFiles() throws Exception {
        sendFile("test.txt", "abc");
        assertThat(new File(testFolder.getRoot(), "test.txt").exists(), equalTo(true));
    }

    @After
    public void cleanup() throws InterruptedException {
        try {
            sshd.stop(true);
        } catch (Exception e) {
            // do nothing
        }
    }
    
    private void sendFile(final String filename, final String contents) throws Exception {
        SessionConfig config = new SessionConfig();
        config.setProperty(SessionConfig.STRICT_HOST_KEY_CHECKING, "no");
        org.vngx.jsch.Session session = JSch.getInstance().createSession(USERNAME, "localhost", 8001, config);
        
        session.connect(PASSWORD.getBytes(StandardCharsets.UTF_8));
        ChannelSftp sftpChannel = session.openChannel(ChannelType.SFTP);
        sftpChannel.connect();
        
        OutputStream out = sftpChannel.put(filename);
        out.write(contents.getBytes(StandardCharsets.UTF_8));
        IOUtils.closeQuietly(out);
        sftpChannel.disconnect();
        session.disconnect();
    }
}

I was able to resolve this by generating the PK file using bouncycastle lib - sharing the code here:

  private void genKey() throws Exception {
    KeyPairGenerator keyPairGenerator = KeyPairGenerator.getInstance("RSA");
    keyPairGenerator.initialize(2048, new SecureRandom());
    PrivateKey privateKey = keyPairGenerator.genKeyPair().getPrivate();
    StringWriter writer = new StringWriter();
    try (PEMWriter pemWriter = new PEMWriter(writer)) {
      pemWriter.writeObject(privateKey);
    }
    FileUtils.writeByteArrayToFile(new File("<location for test PK file>"), writer.toString().getBytes());
  }