Nigeria Targets $750m Pension Fund, Eyes $350m First Close In 2027

Nigeria is targeting a $750m pension-backed infrastructure investment fund to mobilise long-term domestic capital for critical projects in the energy, transportation and digital infrastructure sectors, following a partnership between the Pension Industry Leadership Council (PILC) and UK-funded development agency, FSD Africa.

The proposed investment platform has already attracted interest from 19 Nigerian pension funds and is expected to mobilise an initial $350m at its first close in 2027 before scaling up to its ultimate target of $750m.

Under the proposed funding structure, Nigerian pension funds are expected to contribute approximately $600m, while development finance institutions (DFIs) will provide at least $150m.

The initiative is aimed at addressing Nigeria’s infrastructure financing deficit by connecting investment-ready projects with long-term institutional capital, while creating additional investment opportunities for pension funds.

The partnership was formalised through a Memorandum of Understanding (MoU) signed by PILC and FSD Africa in Lagos on November 10, 2026.

Under the agreement, FSD Africa will provide technical assistance and advisory support to PILC to facilitate the establishment of the fund. Its responsibilities will include supporting the selection of a fund manager through a competitive process, engaging prospective investors and development finance institutions, strengthening institutional capacity and assisting with necessary regulatory reforms.

The initiative is being developed by Nigerian Pension Fund Administrators (PFAs), with support from the National Pension Commission (PenCom) and FSD Africa.

The proposed platform is expected to provide a structured investment channel through which pension assets can be deployed into infrastructure projects capable of generating long-term returns while contributing to economic development.

Speaking on the initiative, the UK Deputy High Commissioner in Lagos, Jonny Baxter, said the partnership reflected the shared commitment of Nigeria and the United Kingdom to mobilising domestic institutional capital for productive investments.

He noted that attracting pension funds and other domestic investors into the real economy remained an important priority for both countries.

Baxter said the proposed fund represented concrete progress towards converting long-term investment ambitions into infrastructure development, employment opportunities and economic growth.

The Chair of PILC and Director-General of PenCom, Omolola Oloworaran, described the initiative as timely, noting that Nigeria’s pension industry controlled the country’s largest pool of long-term savings capital.

She said the industry was committed to deploying a portion of these resources to support infrastructure development while ensuring that the retirement savings of pension contributors remained protected.

According to her, the MoU represents the first step towards establishing a platform that would enable pension funds to participate more actively in financing critical infrastructure.

Oloworaran added that the initiative would create opportunities for the pension industry to contribute more meaningfully to the country’s economic development through long-term investments.

Similarly, the Chief Executive Officer of FSD Africa, Mark Napier, said the proposed fund would help address the contradiction between Africa’s substantial institutional investment capital and its persistent infrastructure financing gaps.

He noted that the continent continued to face significant infrastructure funding challenges despite the availability of long-term capital managed by institutional investors.

Napier said FSD Africa was committed to working with PenCom and Nigeria’s pension industry to unlock more of the capital under their management for investment in priority infrastructure projects.

An initial assessment of Nigeria’s infrastructure investment pipeline has identified 39 projects with potential relevance to the proposed platform, representing approximately US$20 billion in investment requirements.

The projects cut across critical infrastructure segments, including energy, transportation and digital connectivity, which are considered essential to improving economic productivity, strengthening business competitiveness and expanding access to essential services.

Under the proposed investment arrangement, at least 60 per cent of the fund’s portfolio will be allocated to projects in Nigeria, while the remaining portion will be available for selected infrastructure investments across other regional markets.

The investment platform is expected to deploy capital through equity and quasi-equity instruments, providing long-term financing for projects while offering participating pension funds access to professionally managed infrastructure investments.

The proposed structure will comprise a naira-denominated core investment fund and a separate co-investment vehicle that 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 and broaden the platform’s funding base.

The initiative comes amid increasing efforts to mobilise domestic institutional savings to address Nigeria’s infrastructure financing requirements and reduce dependence on public sector funding and external borrowing.

By bringing pension funds and development finance institutions together under a professionally managed investment structure, the proposed $750m platform seeks to strengthen the connection between Nigeria’s long-term savings and its infrastructure development priorities.