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Nigeria’s Pension Industry Leadership Council (PILC) and FSD Africa, a UK-funded specialist development agency, have signed a memorandum of understanding (MoU) to support the development of a proposed $750 million infrastructure fund.
The fund aims to bring together capital from Nigerian pension funds and development finance to invest in infrastructure projects in Nigeria and selected markets across the region.
Under the MoU, FSD Africa will provide the PILC with advice and technical support to help set up the fund. This will include helping to select a fund manager through a competitive process, engaging potential investors and development finance institutions (DFIs), building capacity and supporting necessary regulatory reforms.
The initiative was developed by Nigerian pension fund administrators, with support from the National Pension Commission (PenCom) and FSD Africa, and has attracted interest from 19 Nigerian pension funds.
Omolola Oloworaran, chair of the PILC and director general of PenCom, said: “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.”
Mark Napier, chief executive officer of FSD Africa, commented: “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.”
The proposed platform is targeting an initial $350 million by its first close, expected in 2027, before scaling to its full target size. At that size, it aims to mobilise approximately $600 million from Nigerian pension funds and at least $150 million from DFIs.
An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the platform, representing about $20 billion in investment needs.
Investing in equity and quasi-equity, the platform aims to allocate at least 60% of its portfolio to projects in Nigeria, with the remainder available for selected regional investments. Under the planned structure, 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.
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