Nigeria Targets $750 Million Pension-Backed Fund to Finance Infrastructure

LAGOS, Nigeria — Nigeria's pension industry is developing a proposed $750 million infrastructure investment platform aimed at mobilising long-term retirement savings and development finance for projects in energy, transportation and digital infrastructure.

The proposed initiative, being developed by the Pension Industry Leadership Council (PILC) in partnership with UK-funded development agency FSD Africa, has already attracted expressions of interest from 19 Nigerian pension funds.

The platform is designed to help address one of Nigeria's longstanding economic challenges: finding sufficient long-term financing for major infrastructure projects.

Importantly, the $750 million figure represents the target size of the proposed fund, rather than capital that has already been secured. The initiative is targeting an initial capital mobilisation of $350 million at its first close in 2027 before expanding towards its full $750 million target.

Mobilising Pension Capital

At its targeted final size, the proposed platform expects to mobilise approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions.

The initiative would create a structured investment vehicle through which pension assets could be invested in infrastructure projects while seeking to provide appropriate long-term returns for retirement savings.

Omolola Oloworaran, Chair of the Pension Industry Leadership Council and Director-General of Nigeria's National Pension Commission, said the pension industry has a major pool of long-term savings that could play a greater role in financing national development.

However, she also stressed the importance of protecting contributors' retirement savings while expanding infrastructure investment.

The proposed platform is therefore intended to connect professionally managed infrastructure opportunities with institutional capital, rather than simply directing pension money into government projects.

Focus on Energy, Transport and Digital Infrastructure

The fund is expected to focus on sectors that are considered critical to Nigeria's economic growth, including energy, transportation and digital connectivity.

Reliable electricity, improved transport networks and stronger digital infrastructure remain important challenges for businesses and households across Nigeria.

According to the project's initial assessment, 39 infrastructure projects have been identified as potentially relevant to the platform. Together, those projects represent estimated investment requirements of approximately $20 billion, highlighting that the proposed $750 million fund would represent only part of Nigeria's wider infrastructure financing needs.

At least 60% of the proposed fund's portfolio is expected to be allocated to projects within Nigeria, while the remainder could be invested in selected projects elsewhere in the region.

Technical Support From FSD Africa

Under the agreement, FSD Africa will provide technical and advisory support to help establish the investment platform.

Its role is expected to include helping with the competitive selection of a fund manager, engaging potential investors and development finance institutions, building institutional capacity and supporting necessary regulatory reforms.

The proposed structure is expected to include a naira-denominated core investment fund and a separate co-investment vehicle that would allow participating pension funds to invest alongside the main platform in selected projects.

A parallel foreign-currency investment vehicle may also be established to accommodate international investors.

The fund is expected to provide equity and quasi-equity financing, offering a different form of long-term capital from traditional bank lending.

A Test for Nigeria's Infrastructure Financing Strategy

The initiative reflects a broader effort to increase the role of domestic institutional investors in financing productive sectors of Nigeria's economy.

The UK-backed partnership could help connect Nigeria's large pool of pension savings with infrastructure projects that require patient, long-term financing.

However, the project remains at the development and fundraising stage. Expressions of interest from 19 pension funds do not yet mean that the full $750 million has been committed or invested.

The next major milestone will be the planned $350 million first close in 2027, followed by efforts to scale the platform towards its full target.

If successfully established, the proposed fund could become an important test of whether Nigeria can mobilise more of its domestic pension capital for infrastructure while maintaining strong safeguards for the retirement savings of millions of contributors.