Nigeria’s Pension Industry Leadership Council (PILC) and UK-funded specialist development agency FSD Africa have signed an agreement to support the development of a proposed US$750 million infrastructure fund, in a move expected to deepen the country’s pension industry and expand the role of domestic institutional investors in financing critical infrastructure.
The fund aims to bring together capital from Nigerian pension funds and development finance institutions to invest in infrastructure projects in Nigeria and selected markets across the region. The partnership reflects a shared UK-Nigeria ambition to deepen Nigeria’s capital markets, mobilise more domestic investment and channel long-term capital into the real economy.
The initiative is particularly significant at a time when Nigeria continues to grapple with a substantial infrastructure financing gap, while its pension industry controls a growing pool of long-term savings that could provide a stable source of funding for productive investments.
Under the agreement, FSD Africa will provide the PILC with expert advice and technical support to help establish the fund. This will include assisting in the selection of a fund manager through a competitive process, engaging potential investors and Development Finance Institutions (DFIs), building institutional capacity and supporting necessary regulatory reforms.
Developed by Nigerian Pension Fund Administrators (PFAs), with support from the National Pension Commission (PenCom) and FSD Africa, the initiative has attracted interest from 19 Nigerian pension funds, signalling growing appetite among pension operators to put more long-term domestic capital to work in infrastructure.
Jonny Baxter, UK Deputy High Commissioner in Lagos, said the partnership reflected the determination of both countries to address the challenge of attracting more domestic capital, particularly pension savings, 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.
By bringing together pension funds and development finance, the proposed US$750 million fund aims to provide long-term financing for infrastructure projects that improve connectivity, help businesses grow and support Nigeria’s wider economic development.
For the Nigerian pension industry, the proposed structure could also mark an important shift in the way pension assets are deployed, providing an organised investment platform through which retirement savings can participate in infrastructure financing without individual pension administrators having to independently identify, assess and manage large-scale projects.
Ms Omolola Oloworaran, Chair of the Nigeria Pension Industry Leadership Council and Director-General of PenCom, described the proposed platform as timely, saying the pension industry was committed to supporting infrastructure development 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,” Oloworaran said.
FSD Africa Chief Executive Officer, Mark Napier, also described the proposed investment structure as an opportunity to address the longstanding contradiction between Africa’s institutional capital and its infrastructure financing deficit.
“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.
The proposed platform is targeting an initial capital mobilisation of US$350 million by its first close, expected in 2027, before scaling to US$750 million. At its final target size, PIIP aims to mobilise approximately US$600 million from Nigerian pension funds and at least US$150 million from development finance institutions.
The scale of the proposed investment is significant when considered against the expansion of Nigeria’s pension industry. According to PenCom data reported in October, pension assets had increased to N31.48 trillion in July 2026, compared with N20.79 trillion in July 2024.
The industry subsequently recorded further growth, with pension assets reaching approximately N31.8 trillion as of August 2026, underlining the increasing financial capacity of the sector to support long-term investments.
However, a substantial proportion of pension assets remains invested in government securities, reflecting the industry’s preference for relatively predictable returns and lower-risk instruments.
Data published in October showed that investments in infrastructure funds stood at approximately N344.62 billion as of August, a relatively small portion of the industry’s total assets. This highlights the potential for a structured platform to expand pension fund participation in infrastructure, provided the investments meet regulatory requirements and offer appropriate returns.
The MoU signing comes amid growing demand for infrastructure investment across Nigeria and the wider region, particularly in energy, transport and digital connectivity.
An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the platform, representing approximately US$20 billion in investment needs.
PIIP aims to connect these investment opportunities with long-term institutional capital, investing through equity and quasi-equity instruments, with at least 60 per cent of its portfolio allocated to projects in Nigeria and the remainder available for selected regional investments.
The emphasis on equity and quasi-equity financing is expected to provide a different funding option for infrastructure projects that may require patient capital rather than conventional short-term borrowing. It could also allow pension investors to participate in the long-term financial performance of projects, depending on their commercial structures and returns.
Under the proposed arrangement, the platform will comprise a naira-denominated core investment fund and a separate co-investment vehicle, allowing participating pension funds to invest alongside the core fund in selected projects.
A parallel foreign-currency vehicle may also be established to accommodate international investors.
The structure is designed to provide institutional investors with access to professionally managed, long-term investment opportunities while helping to finance infrastructure that supports economic growth.
For Nigeria, the potential benefits extend beyond the amount of money raised. Investments in energy infrastructure could support electricity generation and distribution, while transport projects could improve the movement of goods and people, reduce business costs and strengthen regional trade. Funding for digital connectivity could also help expand access to essential services and support the country’s growing technology and business sectors.
Nevertheless, the success of the proposed fund will depend largely on its ability to translate investor interest into actual commitments and identify commercially viable projects capable of delivering sustainable returns.
The involvement of pension funds also places a responsibility on the fund’s eventual manager and regulators to maintain strong investment governance, transparency and effective risk management. Unlike ordinary institutional investments, pension assets represent workers’ retirement savings, making capital preservation and long-term returns essential considerations.
The competitive selection of a fund manager, proposed by the agreement, will therefore be an important stage in establishing confidence in the platform.
Regulatory alignment will equally matter, particularly in ensuring that the proposed investment structures comply with PenCom’s investment guidelines and adequately protect pension contributors.
For FSD Africa, the partnership provides an opportunity to support the development of Nigeria’s capital markets while helping to address the persistent shortage of long-term financing for infrastructure across the continent.
Established in 2015, FSD Africa works to strengthen financial markets and expand access to finance across African economies, with support from the UK Government.
The proposed Pension Industry Infrastructure Platform could consequently become an important test of how domestic institutional savings can be mobilised to support economic development without compromising the retirement security of contributors.
With an initial close expected in 2027, attention will now shift to the fund management arrangements, regulatory requirements, investor commitments and identification of projects that can attract the proposed financing.
Ultimately, the initiative will be judged not simply by its US$750 million target but by its ability to turn Nigeria’s growing pension assets into productive investments that deliver measurable economic benefits while protecting the savings of millions of workers.
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