SEC amendments recognise solar infrastructure as real estate, creating new financing opportunities for landowners, developers and investors
By Emmanuel Limwanya, BSc. Real Estate Studies
LUSAKA — Landowners, property developers and investors in Zambia could benefit from new opportunities to generate income from solar energy following regulatory changes that formally recognise solar infrastructure as real estate under the country’s Real Estate Investment Trust (REIT) framework.
The Securities and Exchange Commission (SEC), through Gazette Notice No. 1417 of 2026 published on September 4, 2026, introduced amendments to the Real Estate Investment Trust Guidelines of 2020, expanding the definition of real estate to include solar infrastructure used to generate, store or distribute electricity.
The changes could reshape how property and renewable energy projects are financed by allowing investors to access income from electricity sales alongside traditional rental income.
A Real Estate Investment Trust is an investment vehicle that pools money from multiple investors to acquire and manage income-generating property.
Investors earn returns from the revenue generated by these assets without having to purchase and manage the properties themselves.
Previously, REIT investments were largely associated with commercial buildings, shopping centres, warehouses and other properties that generate rental income.
Under the amended guidelines, solar energy installations can also qualify as income-producing real estate assets.
The inclusion of solar infrastructure means that a commercial property fitted with solar panels could generate returns from both tenants and electricity sales.
This could make properties with renewable energy installations more attractive to investors seeking diversified income streams.
The guidelines exclude minerals, oil and gas from the expanded definition of real estate.
Higher investment limits for renewable energy
One of the most significant changes concerns the proportion of a REIT’s assets that can be invested in a single property.
Under the previous framework, a REIT was generally restricted from investing more than 25 per cent of its net asset value in one property.
The amended guidelines provide greater flexibility for renewable energy investments, allowing a REIT to invest up to 40 per cent of its net asset value, or 35 per cent of its gross asset value, in a single renewable energy asset.
The change could make it easier to finance large, single-site solar power projects through REIT structures without having to divide them artificially into smaller investments.
For Zambia, where reliable electricity supply and investment in alternative energy sources remain important economic priorities, the changes could help attract additional private capital into renewable energy infrastructure.
The framework also provides a pathway for public-private partnerships to register as REITs, potentially creating opportunities for collaboration between government institutions and private investors in developing income-generating property and energy projects.
However, existing legal requirements will continue to apply, including public procurement regulations and, where public assets are involved, the relevant approval requirements concerning the Office of the Auditor-General.
Financial discipline remains essential
While the amendments expand investment opportunities, the SEC has retained strict financial requirements intended to protect investors and promote responsible management of REITs.
At least 80 per cent of a REIT’s gross revenue must come from qualifying sources, including rental income, electricity sales under Power Purchase Agreements (PPAs) and investment income.
This requirement is intended to ensure that REITs remain focused on income-generating property and related investments rather than unrelated commercial activities.
The guidelines also limit borrowing to 50 per cent of a REIT’s total asset value at the time the debt is incurred. In addition, REITs must maintain an interest cover ratio of at least 2.0 times and disclose their gearing and interest cover in periodic reports.
These requirements place an emphasis on financial sustainability, ensuring that REITs have sufficient income to service their debts while continuing to generate returns for investors.
Applicants must also provide certified lease agreements or other supporting documents demonstrating occupancy or commercial viability. Where applicable, Power Purchase Agreements linked to the properties or renewable energy assets must also be submitted.
For developers planning to combine conventional property investments with solar power generation, these requirements will need to be incorporated into their financial models from the beginning.
What the changes mean for landowners
The revised guidelines could create opportunities for landowners and small developers who have suitable properties but lack the capital to develop them independently.
However, owning land does not automatically qualify an individual or business to participate in a REIT. The land must form part of a viable investment structure capable of generating sustainable income and meeting the applicable regulatory requirements.
Landowners considering such opportunities should begin by ensuring that their ownership documents are complete and verifiable. Secure land rights are essential when negotiating with developers, financiers and potential investors.
A professional valuation can also help establish the market value of the land and assess its potential to generate income.
Where solar development is being considered, a technical assessment should establish whether the location, available space, grid connection and potential electricity buyers make the project commercially viable.
Maintaining proper financial records is equally important. Investors are more likely to consider projects supported by reliable accounts, documented rental arrangements and clear evidence of projected revenue than those based on informal agreements.
Written contracts with tenants and electricity buyers can strengthen a project’s investment case. Where electricity is to be sold under a PPA, the terms of that agreement will be particularly important in assessing the predictability of future income.
Landowners and developers should also seek professional advice before committing their properties to investment arrangements. Valuers, lawyers and financial advisers can help assess the risks, establish appropriate structures and protect the interests of property owners.
A new direction for property investment
The 2026 amendments represent an expansion of Zambia’s REIT framework by bringing solar energy infrastructure within the scope of income-generating real estate and providing greater investment flexibility for renewable energy projects.
The changes could encourage closer links between the property sector and the energy industry, particularly as businesses and institutions explore alternative ways of securing electricity and managing energy costs.
For institutional investors, the framework offers access to a wider range of income-producing assets. For developers, it creates another potential route to raise capital.
For landowners, it provides a reason to reassess whether their properties could support viable rental, commercial or solar energy projects.
Nevertheless, the success of these opportunities will depend on commercially sound projects, credible financial information, reliable contracts and compliance with the SEC’s requirements.
The central lesson is that land value is no longer only about buildings, location or agricultural potential. Where the conditions are right, the capacity to generate and sell electricity could become an additional source of income.
Source: Republic of Zambia Government Gazette No. 7981, Volume LXII, No. 120, Gazette Notice No. 1417 of 2026, Real Estate Investment Trust (Amendment) Guidelines, 2026.