Zambia is emerging as one of Southern Africa’s most attractive destinations for renewable energy investments. Driven by growing power demand, a heavy dependence on hydropower, and a national commitment to energy diversification, the country presents substantial opportunities for international investors. The 2024 drought crisis exposed Zambia’s energy vulnerabilities, with power outages lasting up to 21 hours per day. This catalyzed a government-wide push to attract private capital into solar, wind, and mini-hydro projects.
This article outlines everything a foreign investor must know before entering the market—covering HR structuring, work permit requirements, and the range of tax incentives available in 2025
Zambia’s Renewable Energy Investment Landscape
Rapid Sector Growth
Over 80% of Zambia’s electricity comes from hydropower. But climate change has made this unsustainable. In response, the government launched a $500 million solar initiative to electrify 130,000 homes and is working with USAID to deliver 8.5 million solar connections by 2030.
Recent successes, such as the Kabwe 100 MW Solar Project—which now powers 150,000 households—illustrate Zambia’s seriousness in scaling renewable energy. Similarly, the African Development Bank’s $8 million funding for a 25 MW solar plant in Sesheke demonstrates broad international support.
Priority Areas for Investment
The Renewable Energy Feed-in Tariff (REFiT) strategy offers guaranteed tariffs for projects up to 20 MW for 20 years. Key sub-sectors include:
- Utility-scale and off-grid solar – leveraging Zambia’s ideal solar radiation
- Wind energy – untapped potential, especially in Western Province
- Small-scale hydroelectric plants – ideal for rural grids
- Mini-grids and battery storage – targeting low-access rural areas
HR Structuring: Building Local Talent and Compliance
Local Employment Requirements
All foreign-funded projects must demonstrate local benefit. The Kabwe Solar Project achieved a 96% local employment rate and trained over 300 technicians. Zambia’s “Skills for Energy in Southern Africa” (SESA) program has trained over 1,100 professionals—including 310 women—in renewable energy disciplines.
HR Compliance Framework
Foreign investors must:
- Hire local workers wherever feasible
- Develop a succession plan for Zambian understudies
- Train technicians in operations and maintenance
- Engage technical training colleges and universities
- Ensure gender inclusion and equal opportunity hiring
The Energy Regulation Board and Rural Electrification Authority enforce these standards during licensing and project evaluations.
Work Permits and Immigration Requirements
Employment Permits for Foreign Experts
If hiring foreign nationals for technical or executive roles, investors must apply for Employment Permits valid for up to 10 years. Key requirements include:
- Offer letter and employment contract
- Certified qualifications and police clearance
- Registered succession plan showing skills transfer to Zambians
- Proof of job advertisement in Zambian newspapers
Processing Timeline:
- 1 week for mandatory job advertising
- 3–4 weeks for application processing
Investor Permits for Business Owners
Foreign developers can apply for Investor’s Permits with the following thresholds:
- New project: $250,000 minimum investment
- Existing project: $150,000 minimum investment
Required documentation includes:
- Company registration
- ZDA investment license
- Proof of funding or imported capital equipment
- Viable business plan
Special Permits for Project-Based Staff
Short-term construction and installation workers can get temporary permits, but must show:
- Project details (completion timeline, funding, staffing)
- Advertisements for local hiring
- Zambian understudy training plans
Tax Incentives and Fiscal Benefits
Corporate Income Tax Holidays
Zambia offers one of the most attractive renewable energy tax regimes in the region. Eligible projects benefit from:
- 0% income tax for the first 5 years
- Reduced rates thereafter
- Accelerated depreciation on capital assets
VAT and Import Duty Exemptions
Under Statutory Instruments 102 and 104 of 2021, the following are zero-rated or exempt from VAT:
- Solar panels and inverters
- Wind turbines and blades
- Lithium-ion batteries
- LED and solar lighting
- Solar-powered irrigation systems
- Electric vehicles and charging stations
This dramatically reduces project setup costs for foreign investors.
ZDA Tax Benefits
Projects registered under the Zambia Development Agency (ZDA) receive:
- Duty-free machinery importation
- Excise duty reductions (e.g. 25% on hybrid vehicles)
- Negotiated incentives for large-scale green projects
- Access to government-backed Power Purchase Agreements (PPAs)
Investment Facilitation and Support Infrastructure
Zambia Development Agency (ZDA)
The ZDA is the one-stop shop for investors in 2025. It facilitates:
- Fast-tracked immigration permits
- Land acquisition for solar farms or wind sites
- Partnership matching with local businesses
- Investment license processing
Registration Fees:
- Processing: K2,844.40 (≈ US$102)
- Certificate issuance: K17,044.40 (≈ US$579)
- Validity: 5 years with option to renew
Financial Support Tools
- Rural Electrification Fund (REF): Provides grants and capital support of up to 100% for qualifying off-grid and mini-grid projects.
- Green Climate Fund: Offers concessional financing to approved projects
- World Bank’s Scaling Solar Program: Provides competitive tenders and guarantees
- AfDB SEFA Fund: Assists with early-stage project development
Strategic Recommendations for Foreign Investors
1. Establish a Local Entity
Incorporate locally and register with ZDA to unlock all available benefits.
2. Embed HR and Succession Planning Early
Build a compliant HR structure upfront. This ensures smoother work permit approvals and enhances local community engagement.
3. Design for Tax Efficiency
Plan your investment structure to benefit from tax holidays, depreciation allowances, and duty exemptions.
4. Work with REA and ERB
Early collaboration with the Rural Electrification Authority (REA) and Energy Regulation Board (ERB) ensures smoother licensing and integration into Zambia’s national grid.
Final Thoughts
With its favorable tax regime, government-backed incentives, and growing energy demand, Zambia is positioning itself as Southern Africa’s renewable energy powerhouse. Foreign investors who act quickly—and build in compliance, capacity-building, and local partnerships—stand to gain the most.
Whether you’re building solar parks, introducing battery storage, or developing off-grid solutions, Zambia offers a robust platform for scale, impact, and profit.
