Get Guardian on GoogleAt least 60 per cent of a proposed $750 million infrastructure investment fund backed by Nigeria’s pension industry will be channelled into projects within the country, as pension operators moved to deploy more long-term domestic capital into infrastructure development.
The remaining 40 per cent will be available for selected investments across the region, under the proposed Nigeria-focused investment platform being developed by the Pension Industry Leadership Council (PILC) in partnership with UK-funded development agency, FSD Africa.
The fund is expected to attract approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions, bringing its targeted capitalisation to $750 million.
It is targeting an initial mobilisation of $350 million at its first close, expected in 2027, before scaling up to its full target.
Already, 19 Nigerian pension funds have expressed interest in participating in the initiative, which is being developed by Pension Fund Administrators (PFAs), with support from the National Pension Commission (PenCom) and FSD Africa.
The investment platform is expected to finance projects in energy, transportation and digital connectivity through equity and quasi-equity investments.
The initiative is designed to connect infrastructure investment opportunities with long-term institutional capital, while expanding the role of domestic pension savings in financing productive economic activities.
Chairman of PILC and Director-General of PenCom, Omolola Oloworaran, said the pension industry was committed to mobilising its long-term savings capital to support infrastructure development while safeguarding contributors’ retirement savings.
She said the proposed platform marked an important step towards deploying pension assets into investments that can support the country’s development needs.
“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,” she said.
Oloworaran described the memorandum of understanding with FSD Africa as the first step in the industry’s efforts to achieve the objective.
Chief Executive Officer of FSD Africa, Mark Napier, said the proposed structure would help address the gap between Africa’s substantial institutional capital and its infrastructure financing needs.
He said the organisation was keen to work with PenCom and Nigeria’s pension industry to unlock the capital they manage for investment in priority infrastructure projects.
Under the agreement, FSD Africa will provide technical advice and support to PILC in establishing the fund.
The support will cover the selection of a fund manager through a competitive process, engagement with potential investors and development finance institutions, capacity building and assistance with necessary regulatory reforms.
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.
The initiative comes amid growing demand for infrastructure investment in Nigeria and the wider region.
An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the platform, representing estimated investment requirements of about $20 billion.
The UK Deputy High Commissioner in Lagos, Jonny Baxter, said the partnership reflected the shared commitment of Nigeria and the United Kingdom to attracting more domestic capital, including pension funds, into the real economy.
