The United Kingdom has strengthened its partnership with Nigeria to mobilise long-term domestic capital for infrastructure development, following an agreement between the Pension Industry Leadership Council (PILC) and UK-funded development agency FSD Africa to support the establishment of a proposed $750 million infrastructure investment fund.

The proposed Pension Industry Infrastructure Platform (PIIP) is designed to unlock a significant portion of Nigeria’s pension assets for investment in critical infrastructure by combining domestic institutional capital with development finance to support projects in Nigeria and selected markets across Africa.

The initiative seeks to address the longstanding infrastructure financing gap in Nigeria and the wider region by connecting the growing pool of pension savings with viable investment opportunities in energy, transportation, digital connectivity and other productive sectors of the economy.

Under a memorandum of understanding (MoU) signed by both organisations, FSD Africa will provide technical expertise and advisory support to PILC in developing the investment platform. Its responsibilities will include supporting the competitive selection of a fund manager, engaging prospective investors and development finance institutions (DFIs), building institutional capacity and facilitating necessary regulatory reforms.

The initiative, developed by Nigerian Pension Fund Administrators (PFAs) with support from the National Pension Commission (PenCom) and FSD Africa, has already attracted interest from 19 Nigerian pension funds, indicating growing appetite among pension institutions to deploy more of their long-term investment capital into infrastructure.

Speaking on the partnership, UK Deputy High Commissioner in Lagos, Jonny Baxter, said the agreement reflected the shared commitment of both countries to attracting more domestic institutional investment 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,” Baxter said.

Chair of PILC and Director-General of PenCom, Ms Omolola Oloworaran, described the proposed investment platform as timely, noting that Nigeria’s pension industry holds the country’s largest pool of long-term savings capital and has a significant role to play in financing economic development.

She said the industry was committed to mobilising pension assets to support infrastructure development while ensuring that the retirement savings of contributors remained adequately protected.

“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.

Chief Executive Officer of FSD Africa, Mark Napier, said the proposed investment structure offered an opportunity to address the contradiction between Africa’s substantial institutional capital and its persistent 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,” Napier said.

The proposed platform is targeting an initial capital mobilisation of $350 million at its first close, expected in 2027, before scaling up to its ultimate target of $750 million.

At full capacity, PIIP is expected to mobilise approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions, establishing a financing structure that combines domestic institutional savings with international development capital.

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

The proposed fund will invest through equity and quasi-equity instruments, with at least 60 per cent of its portfolio earmarked for projects in Nigeria, while the remaining allocation will be available for selected infrastructure investments across the region.

The investment structure is expected to comprise a naira-denominated core investment fund and a separate co-investment vehicle through which participating pension funds can invest alongside the main fund in selected projects. A parallel foreign-currency investment vehicle may also be established to accommodate international investors.

The arrangement is intended to provide pension institutions with access to professionally managed, long-term infrastructure investment opportunities while broadening the financing options available to project developers and businesses operating in critical sectors of the economy.

The partnership comes amid increasing recognition of the need to mobilise domestic savings to finance Africa’s infrastructure requirements, particularly as governments face fiscal constraints and traditional sources of long-term development financing remain inadequate.

Nigeria’s pension industry represents a potentially significant source of patient capital for addressing these challenges, given the long-term investment horizon of pension contributions and the scale of assets managed by pension operators.

However, deploying pension funds into infrastructure requires appropriate investment structures, effective risk management, sound project preparation and regulatory safeguards to ensure that investments generate sustainable returns without exposing contributors’ retirement savings to undue risks.

Established in 2025, PILC is an industry-wide strategic platform bringing together PenCom, pension operators and other stakeholders to advance the growth, sustainability and transformation of Nigeria’s pension industry.

The council promotes collective leadership, policy coordination and strategic partnerships aimed at expanding pension coverage, strengthening governance, mobilising pension assets for productive investments and enhancing retirement security.

FSD Africa, meanwhile, is a specialist development agency supported by the UK Government and other development and philanthropic partners. It works with governments, regulators and financial institutions across 30 African countries to strengthen financial markets, shape policies and mobilise capital for economic growth, climate resilience, clean energy transition and nature-positive development.

Through its investment arm, FSD Africa Investments, the agency also deploys catalytic capital to support the development of financial markets and unlock investment opportunities across the continent.

The British High Commission in Nigeria said the partnership aligned with the broader UK-Nigeria Strategic Partnership, which seeks to deepen cooperation in economic growth, trade and investment, governance, security, climate action, education, healthcare and innovation.