Nigeria’s pension industry is partnering with FSD Africa, a UK-funded development agency, to establish a $750 million infrastructure investment fund. The goal is to channel domestic pension assets into projects across Nigeria and selected African markets.
The initiative, called the Pension Industry Infrastructure Platform (PIIP), has already attracted interest from 19 Nigerian pension funds. It aims to direct long-term capital into critical sectors like energy, transport, and digital infrastructure.
Partnership Formalized in Lagos
The Pension Industry Leadership Council (PILC) and FSD Africa formalized the partnership through a memorandum of understanding signed in Lagos. Under the agreement, FSD Africa will provide technical expertise and advisory support to establish the fund.
Their responsibilities include selecting a fund manager, engaging investors and development finance institutions (DFIs), building institutional capacity, and assisting with regulatory reforms.
Bridging the Infrastructure Financing Gap
Developed by Nigerian Pension Fund Administrators (PFAs) with support from the National Pension Commission (PenCom) and FSD Africa, the initiative seeks to bridge the gap between Nigeria’s substantial pension savings and its infrastructure financing needs.
Omolola Oloworaran, chair of PILC and director-general of PenCom, stated that the platform would allow the pension industry to contribute directly to infrastructure development while safeguarding contributors’ retirement savings.
Jonny Baxter, UK deputy high commissioner in Lagos, highlighted the partnership’s alignment with Nigeria and the UK’s shared interest in attracting more domestic investment into the real economy.
According to Mark Napier, CEO of FSD Africa, the fund will address the mismatch between Africa’s institutional capital and its infrastructure financing requirements.
The fund targets an initial capital mobilization of $350 million by 2027, scaling up to its $750 million goal. It aims to raise $600 million from Nigerian pension funds and at least $150 million from DFIs.
An initial assessment identified 39 projects in Nigeria’s infrastructure pipeline, requiring an estimated $20 billion in investment. The platform will invest through equity and quasi-equity instruments, with at least 60% allocated to projects in Nigeria.
Its structure includes a naira-denominated core fund and a co-investment vehicle for pension funds to invest alongside the main fund. A foreign currency vehicle may also be established for international investors.
