NEWS
UK Backs Plan to Mobilise $750m Nigerian Pension Fund for Infrastructure
UK Backs Plan to Mobilise $750m Nigerian Pension Fund for Infrastructure
The proposed fund aims to raise $600m from Nigerian pension funds and at least $150m from development finance institutions.
Nineteen Nigerian pension funds have expressed interest, with an initial target of $350m mobilised by 2027.
An assessment identified 39 potential infrastructure projects requiring about $20bn in financing.
November 11, () – The United Kingdom has backed Nigeria’s plan to establish a $750m pension-led infrastructure investment fund to direct long-term retirement savings toward projects in energy, transport, and digital infrastructure.
The initiative, known as the Pension Industry Infrastructure Investment Platform (PIIP), is targeting $600m from domestic pension funds and at least $150m from development finance institutions at its proposed final size.
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.
The proposed fund has attracted interest from 19 Nigerian pension funds and is targeting an initial capital mobilisation of $350m by its close in 2027, before expanding to $750m.
The UK’s support will be delivered through FSD Africa, which will provide technical assistance and expert advice to establish the investment platform.
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This includes supporting the selection of a fund manager, engaging prospective investors and development finance institutions, building industry capacity and identifying necessary regulatory reforms.
Channel
Speaking on the partnership, the UK Deputy High Commissioner in Lagos, Jonny Baxter, said the initiative would help attract more domestic capital, particularly pension savings, into productive investments.
He said the partnership could help translate Nigeria’s infrastructure financing ambitions into investment, jobs and economic growth.
Director General of PenCom Omolola Oloworaran Photo credit National Pension Commission
How the proposed fund will operate
The Director-General of the National Pension Commission and Chair of the Pension Industry Leadership Council, Omolola Oloworaran, said the platform would create an avenue for deploying long-term pension capital into infrastructure without compromising contributors’ retirement savings.
She said the pension industry held the country’s largest pool of long-term savings and was committed to supporting infrastructure development while protecting contributors’ funds.
At its proposed final 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.
The fund 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 be invested in selected regional markets.
Its proposed structure will include a naira-denominated core investment fund and a separate co-investment vehicle, allowing pension funds to participate alongside the main fund in selected projects.
A parallel foreign-currency investment vehicle may also be established to accommodate international investors.
39 projects identified in infrastructure pipeline
An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the proposed platform, representing approximately $20bn in financing requirements.
The fund is intended to help bridge the gap between the country’s infrastructure needs and the availability of long-term financing.
However, the $20bn represents the estimated financing needs of the identified projects, not the amount the proposed fund is expected to provide.
FSD Africa Chief Executive Officer, Mark Napier, said the initiative would help address the mismatch between Africa’s institutional savings and its infrastructure financing requirements.
He said the organisation was working with PenCom and the Nigerian pension industry to unlock more of the capital managed by institutional investors for priority infrastructure projects.
The proposed $750m fund could provide a new source of long-term financing for infrastructure while giving pension funds access to investments beyond conventional asset classes.
Its success, however, will depend on securing investor commitments, appointing a fund manager, completing regulatory arrangements and identifying projects that meet pension funds’ risk and return requirements.
The agreement marks an initial step towards establishing the platform; it does not mean the $750m has already been raised or committed.
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