Project Finance · Question

Can I count land I already own as part of my promoter contribution?

Short answer

Often yes, though it depends on the lender and the title. Many lenders accept land already owned and used for the project as part of the promoter's contribution, but they value it themselves, may count it at cost or at a prudent valuation, and may ask for the land to be mortgaged. Clear ownership and permitted land use are essential.

In more detail

Land owned by the promoter, or by the borrowing company, is a real asset going into the project. If it forms part of the project cost, it is natural for it to count as part of the contribution. The questions that decide how are about value, title and use.

How lenders usually look at it:

Value: some lenders accept the original purchase cost, others use a current valuation by an approved valuer, and many take the lower of the two. A large rise in market value is not always allowed as equity.
Ownership: land must belong to the borrower, or to a promoter who is willing to bring it in with proper documentation. Land held by a relative or another entity complicates matters.
Title: the lender's legal counsel checks the chain of ownership, encumbrances and any pending disputes.
Use: the land must be permitted for the activity planned, and a change of land use, if needed, must be approved by the competent authority before the lender relies on it.
Charge: land that is part of the project is generally mortgaged to the lender as security.

Where the land belongs to the promoter personally and the borrower is a company, the transfer or lease into the company is usually documented, and the way it is recorded affects both tax and the lender's view of the contribution.

Do not assume land fully covers the equity share

A lender may count only part of the land value, or require some contribution in cash, so that the project has liquid money of its own. Ask early what mix is acceptable.

Understanding this at sanction avoids a nasty surprise later when the first release is due. Terms vary, so confirm with the lender and your legal adviser.

Key points

Land you own can often count towards promoter contribution, subject to lender policy.
Lenders choose cost or valuation, commonly the more conservative figure.
Clear title, permitted use and proper transfer into the borrower matter most.
The land is usually mortgaged as security for the project loan.
Some cash contribution may still be required alongside land.

Who this applies to

Promoters planning a factory or warehouse on land they already hold.
Companies bringing a promoter's land into a new project.
Owners estimating how much cash they must arrange themselves.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority.