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Nigeria’s pension industry is seeking to raise $750 million to finance infrastructure projects in the country and other selected African markets, with 19 Nigerian pension funds already expressing interest in the proposed investment fund.
The initiative, known as the Pension Industry Infrastructure Platform (PIIP), is being developed by the Pension Industry Leadership Council (PILC) in partnership with FSD Africa, a UK-funded development agency.
The two organisations have signed a memorandum of understanding (MoU) to support the establishment of the fund, which will bring together investments from Nigerian pension funds and development finance institutions to address infrastructure funding gaps.
The fund will focus on critical sectors, including energy, transport and digital infrastructure, with at least 60 per cent of its investments earmarked for projects in Nigeria. The remaining funds will be available for selected projects across the region.
The platform is targeting an initial $350 million at its first close, expected in 2027, before expanding to $750 million.
At its full target, Nigerian pension funds are expected to contribute about $600 million, while development finance institutions will provide at least $150 million.
Under the agreement, FSD Africa will provide technical support and expert advice to the pension industry to establish the fund. Its responsibilities will include helping to select a fund manager through a competitive process, engaging potential investors and development finance institutions, building capacity and supporting necessary regulatory changes.
The initiative was developed by Nigerian Pension Fund Administrators (PFAs), with support from the National Pension Commission (PenCom) and FSD Africa.
An initial assessment of Nigeria’s infrastructure investment pipeline identified 39 projects that could benefit from the fund, with estimated investment requirements of about $20 billion.
Speaking on the partnership, Director-General of PenCom and Chair of the Nigeria Pension Industry Leadership Council, Omolola Oloworaran, said the initiative would help direct the country’s large pool of pension savings towards infrastructure development while protecting contributors’ retirement funds.
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She said: “The pension industry holds the largest pool of long-term savings capital in the country, and we are committed to mobilising it to deepen infrastructure development, while safeguarding the retirement savings of contributors. This MoU is the first step we are taking as an industry, and it is just the beginning.”
Also speaking, the Chief Executive Officer of FSD Africa, Mark Napier, said the fund would help address the gap between the large amount of institutional funds available in Africa and the continent’s huge infrastructure financing needs.
“We have observed for several years now the paradox of Africa having significant institutional capital while at the same time facing big infrastructure funding deficits.
We are keen to work with PenCom and the pension industry in Nigeria to address this and unlock the capital they manage towards Nigeria’s priority infrastructure,” he said.
The UK Deputy High Commissioner in Lagos, Jonny Baxter, said the partnership demonstrated growing cooperation between Nigeria and the United Kingdom in mobilising domestic funds for economic development.
“The UK is proud to partner with the Nigeria’s Pension Industry and the pensions regulator Pencom to progress this investment. Both our countries are prioritising tackling the challenge of attracting more domestic capital, including from pension funds, into the real economy. It is great to see Nigeria making concrete progress on its efforts and be a part of those opportunities to turn this ambition into investment, jobs, and economic growth,” he said.
The proposed fund will operate through a naira-denominated core investment fund and a separate co-investment vehicle, allowing pension funds to invest alongside the main fund in selected projects.
A separate foreign-currency investment vehicle may also be established to accommodate international investors.
The fund will invest through equity and quasi-equity arrangements, giving it the opportunity to provide long-term capital to infrastructure projects while seeking returns for participating investors.
The partnership is expected to provide a new channel for deploying pension funds into productive investments, supporting infrastructure development, business growth and economic expansion.
