Nigeria's pension industry and the UK government have agreed to build a $750 million infrastructure fund, aiming to channel the country's largest pool of long-term savings into roads, energy and digital projects by the end of the decade.

The Pension Industry Leadership Council (PILC), the sector coordination body of Nigerian pension operators, and FSD Africa, a UK-funded specialist development agency, signed the agreement, according to a statement issued by the UK mission in Lagos. The fund will blend capital from Nigerian pension funds with development finance to invest in infrastructure in Nigeria and selected regional markets.

What does the agreement cover?

Under the MoU, FSD Africa will supply expert advice and technical support to establish the fund. Its remit includes:

• Selecting a fund manager through a competitive process
• Engaging potential investors and Development Finance Institutions (DFIs), state-backed lenders that finance private-sector development
• Building industry capacity
• Supporting the necessary regulatory reforms

The initiative was developed by Nigerian Pension Fund Administrators (PFAs) with support from the National Pension Commission (PenCom), the industry regulator, and FSD Africa. Nineteen Nigerian pension funds have already expressed interest in the platform, a signal of strong appetite to deploy long-term domestic capital into infrastructure.

How much money is targeted, and when?

The platform, named PIIP, targets an initial capital mobilisation of $350 million at its first close, expected in 2027, before scaling to $750 million. At its final size, the fund aims to raise approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions, according to the UK statement.

The scale of the underlying demand is substantial. An initial assessment of Nigeria's infrastructure pipeline identified 39 projects with potential relevance to the platform, representing approximately $20 billion in investment needs, with demand concentrated in energy, transport and digital connectivity.

How will the fund be structured?

PIIP will invest in equity and quasi-equity capital, instruments that combine features of shares and debt. At least 60 per cent of the portfolio will be allocated to projects in Nigeria, with the remainder available for selected regional investments.

The platform is planned as a Naira-denominated core investment fund alongside a separate co-investment vehicle, which will allow participating pension funds to invest directly alongside the core fund in selected projects. A parallel foreign-currency vehicle may also be established to accommodate international investors.

What did the principals say?

Jonny Baxter, UK Deputy High Commissioner in Lagos, said: "The UK is proud to partner with the Nigeria's Pension Industry and the pensions regulator Pencom to progress this investment. Both our countries are prioritising tacking 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."

Omolola Oloworaran, Chair of the PILC and Director General of PenCom, welcomed the platform's timing and ambition. "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.

Mark Napier, CEO of FSD Africa, described the planned structure as one with great promise for Nigeria and 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. 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 partnership reflects a shared UK-Nigeria ambition to deepen Nigeria's capital markets, mobilise more domestic investment and direct long-term capital into the real economy. The UK statement said the fund aims to finance projects that improve connectivity, help businesses grow and support wider economic development across Nigeria and the region.