The United Kingdom has backed plans by Nigeria’s pension industry to establish a $750 million infrastructure investment fund aimed at financing projects in energy, transport and digital infrastructure.
The proposed platform has attracted interest from 19 Nigerian pension funds and is expected to mobilise approximately $600 million from domestic pension funds and at least $150 million from development finance institutions.
The partnership was formalised through an agreement between the Pension Industry Leadership Council and FSD Africa, a UK-funded development agency, according to a statement issued on Tuesday.
Speaking on the partnership, UK Deputy High Commissioner in Lagos, Jonny Baxter, said the initiative would help attract domestic capital into Nigeria’s 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,” he said.
Baxter added that the initiative could translate investment ambitions into jobs and economic growth.
Under the agreement, FSD Africa will provide technical assistance and expert advice to support the fund’s establishment.
Its responsibilities will include facilitating the competitive selection of a fund manager, engaging prospective investors and development finance institutions, building industry capacity and supporting necessary regulatory reforms.
Fund Targets $350m Initial Capital By 2027
The proposed Nigeria Pension Industry Infrastructure Fund, identified as PIIP, was developed by Nigerian Pension Fund Administrators with support from the National Pension Commission (PenCom) and FSD Africa.
The platform targets an initial capital mobilisation of $350 million at its first close in 2027, before expanding to its full target of $750 million.
At the final target size, Nigerian pension funds are expected to provide approximately 80 per cent of the capital, while development finance institutions will contribute at least 20 per cent.
PenCom Director-General and Chair of the Pension Industry Leadership Council, Omolola Oloworaran, said the initiative would create opportunities to invest long-term pension capital in productive infrastructure projects while protecting contributors’ retirement savings.
“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.
39 Infrastructure Projects Identified
An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the proposed fund.
According to the statement, the projects represent approximately $20 billion in financing needs.
PIIP will focus on equity and quasi-equity investments, with at least 60 per cent of its portfolio allocated to Nigerian infrastructure projects.
The remaining portion may support selected infrastructure investments in other regional markets.
The proposed structure will include a naira-denominated core investment fund and a separate co-investment vehicle.
The arrangement will allow participating pension funds to invest alongside the main fund in selected projects.
A parallel foreign-currency investment vehicle may also be established to accommodate international investors.
FSD Africa Explains Investment Objective
FSD Africa Chief Executive Officer, Mark Napier, said the initiative seeks to address the gap between Africa’s institutional savings and its infrastructure financing requirements.
“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,” Napier said.
He added that the agency was keen to work with PenCom and Nigeria’s pension industry to channel managed funds into priority infrastructure projects.
The partnership forms part of broader UK-Nigeria efforts to strengthen capital markets, mobilise domestic investment and direct long-term financing towards infrastructure development and economic growth.
