FSD Africa and Nigeria’s Pension Industry Leadership Council (PILC) have signed an agreement to support the establishment of a proposed $750 million infrastructure investment fund aimed at mobilising domestic pension capital and development finance.

The proposed Pension Industry Infrastructure Platform (PIIP) is targeting an initial $350 million at its first close, expected in 2027, before expanding to $750 million.

At its target size, the fund aims to raise approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions (DFIs).

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.

Under the agreement, FSD Africa will provide technical assistance to PILC, including support for selecting a fund manager through a competitive process, engaging potential investors and DFIs, building institutional capacity and addressing regulatory requirements.

The fund will invest in infrastructure equity and quasi-equity, with at least 60% of its portfolio allocated to projects in Nigeria. The remaining capital may be invested in selected regional markets.

An initial assessment of Nigeria's infrastructure pipeline identified 39 potential projects representing approximately $20 billion in investment requirements, including opportunities in energy, transport and digital connectivity.

The proposed investment structure will include a Naira-denominated core fund and a separate co-investment vehicle, allowing participating pension funds to invest alongside the main fund in selected projects.

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

Omolola Oloworaran, Chair of PILC and Director General of PenCom, said the initiative would provide a way for the pension industry to participate more actively in infrastructure financing while protecting 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.

The partnership comes as Nigeria seeks to increase domestic institutional investment in infrastructure and reduce its reliance on public financing.

Mark Napier, CEO of FSD Africa, said the initiative could help address the gap between the availability of institutional capital and infrastructure financing needs across Africa.

“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,” he said.

“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.”

The proposed fund remains in development, with the partners working towards its planned first close in 2027.