Barbara Bako, Abuja.
At least 19 Nigerian pension funds have indicated interest in a proposed $750 million infrastructure investment fund aimed at addressing financing gaps in critical sectors of the economy.
The proposed fund is being developed by the Pension Industry Leadership Council (PILC) in partnership with UK-funded development agency, FSD Africa, following the signing of a memorandum of understanding (MoU) between both organisations.
The initiative seeks to pool resources from Nigerian pension funds and development finance institutions to finance infrastructure projects in Nigeria and selected African markets, particularly in the energy, transport and digital infrastructure sectors.
The fund is expected to raise an initial $350 million at its first close in 2027, with plans to increase the amount to $750 million.
Nigerian pension funds are expected to contribute about $600 million, while development finance institutions will provide at least $150 million.
The initiative is being driven by Nigerian Pension Fund Administrators (PFAs), with support from the National Pension Commission (PenCom) and FSD Africa.
As part of the agreement, FSD Africa will provide technical assistance to establish the investment platform, including the selection of a fund manager through a competitive process, investor engagement, capacity building and support for regulatory reforms.
Speaking on the development, PenCom Director-General and Chair of PILC, Omolola Oloworaran, said the pension industry was committed to deploying its long term savings towards infrastructure development while protecting contributors’ retirement benefits.
“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,” she said.
FSD Africa Chief Executive Officer, Mark Napier, said the proposed fund would help address the contradiction between Africa’s substantial institutional capital and its persistent infrastructure financing deficit.
He said the organisation was working with PenCom and Nigeria’s pension industry to unlock more domestic investment for priority infrastructure projects.
An assessment of Nigeria’s infrastructure pipeline has identified 39 projects with potential to attract investment through the platform, representing an estimated $20 billion in funding requirements.
The proposed fund will invest through equity and quasi-equity instruments, with at least 60 per cent of its portfolio earmarked for projects in Nigeria, while the balance will be available for selected investments across the region.
Its investment structure will include a naira-denominated core fund and a separate co-investment vehicle that will allow pension funds to participate alongside the main fund in selected projects.
A foreign currency vehicle may also be established to accommodate international investors.
UK Deputy High Commissioner in Lagos, Jonny Baxter, described the partnership as a reflection of the shared commitment of Nigeria and the United Kingdom to mobilising domestic capital for economic development.
He said the initiative would help translate investment ambitions into infrastructure opportunities, jobs and economic growth.
The partnership is expected to strengthen the participation of institutional investors in infrastructure financing while providing long-term capital for projects that improve connectivity and support business expansion.
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