Nigerian Pension Counil, FSD Africa Partner to Establish $750m Infrastructure Fund

By Adedapo Adesanya

Nigeria’s Pension Industry Leadership Council (PILC) and UK-funded development agency, FSD Africa, have signed an agreement to support the development of a proposed $750 million infrastructure investment fund aimed at mobilising pension funds and development finance for infrastructure projects in Nigeria and selected African markets.

The proposed Pension Industry Infrastructure Platform (PIIP) is designed to channel long-term domestic capital into critical infrastructure sectors, including energy, transport and digital connectivity, while deepening Nigeria’s capital market and supporting economic growth.

Under the agreement, FSD Africa will provide technical assistance and advisory support to PILC, including the selection of a fund manager through a competitive process, engagement with potential investors and Development Finance Institutions (DFIs), capacity building and support for necessary regulatory reforms.

The initiative, developed by Nigerian Pension Fund Administrators (PFAs) with support from the National Pension Commission (PenCom) and FSD Africa, has already attracted interest from 19 Nigerian pension funds.

The platform is targeting an initial capital mobilisation of $350 million at its first close, expected in 2027, before scaling up to $750 million.

At its full target size, it aims to raise approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions.

According to the chair of PILC and Director-General of PenCom, Ms Omolola Oloworaran, the initiative would provide an avenue for mobilising the pension industry’s long-term savings towards infrastructure development while safeguarding contributors’ retirement funds.

“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.

Similarly, FSD Africa Chief Executive Officer, Mr Mark Napier, said the platform would help address the gap between Africa’s institutional capital and its 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.

UK Deputy High Commissioner in Lagos, Mr Jonny Baxter, said the partnership reflected the shared commitment of Nigeria and the United Kingdom to attracting more domestic investment, particularly from pension funds, into the real economy.

“The UK is proud to partner with 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.

An initial assessment of Nigeria’s infrastructure project pipeline identified 39 projects with potential relevance to the platform, representing approximately $20 billion in investment requirements.

The PIIP is expected to invest in equity and quasi-equity instruments, with at least 60 per cent of its portfolio allocated to projects in Nigeria, while the remainder would support selected investments across the region.

The proposed structure will comprise a Naira-denominated core investment fund and a separate co-investment vehicle, allowing participating pension funds to invest alongside the main fund in selected projects.

A parallel foreign-currency vehicle may also be established to accommodate international investors.