UK, Nigeria seal $750m infrastructure deal as Pension funds prepare to unlock billions

By Victor Ahiuma-Young Nigeria and the United Kingdom have strengthened their economic partnership with a proposed $750 million infrastructure investment fund aimed at mobilising billions of dollars in pension assets to finance critical development projects across Nigeria and other selected African markets. The initiative, which has already attracted interest from 19 Nigerian pension funds, is expected to channel long-term domestic and international investments into key sectors, including energy, transportation and digital infrastructure, as both countries seek to address the continent’s widening infrastructure financing gap.

A statement from PenCom disclosed that the agreement was signed by Nigeria’s Pension Industry Leadership Council, PILC,and UK-funded specialist development agency, FSD Africa, in Lagos on November 10, 2026. Under the agreement, FSD Africa will provide technical expertise and advisory support to PILC towards establishing the proposed investment platform, including the selection of a fund manager through a competitive process, engagement with prospective investors and development finance institutions, capacity building and support for necessary regulatory reforms.

The initiative was developed by Nigerian Pension Fund Administrators, PFAs, with support from the National Pension Commission, PenCom, and FSD Africa. Speaking on the development, UK Deputy High Commissioner in Lagos, Jonny Baxter, said the partnership reflected the shared commitment of both countries to mobilising domestic capital, particularly pension funds, for productive investment in the real economy.

According to him: “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.” On her part, Chair of the Nigeria Pension Industry Leadership Council and Director-General of the National Pension Commission, Ms Omolola Oloworaran, described the proposed investment platform as timely, stressing that the pension industry was committed to deploying its substantial pool of long-term savings towards national development while protecting contributors’ retirement funds.

She 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.” In the same vein, Chief Executive Officer of FSD Africa, Mark Napier, said the initiative would help address the contradiction between Africa’s substantial institutional capital and its huge infrastructure financing needs.

He said : “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 capital mobilisation of $350 million at its first close, expected in 2027, before expanding to its ultimate target of $750 million.

At full capacity, the fund is expected to attract approximately $600 million from Nigerian pension funds and at least $150 million from development finance institutions. An initial assessment of Nigeria’s infrastructure pipeline identified 39 projects with potential relevance to the investment platform, representing approximately $20 billion in funding requirements.

The proposed fund will invest in equity and quasi-equity instruments, with at least 60 per cent of its portfolio allocated to projects in Nigeria, while the remaining investment will be available for selected opportunities across the region. The investment structure is expected to comprise a naira-denominated core investment fund and a separate co-investment vehicle that will allow participating pension funds to invest alongside the main fund in selected projects.

A parallel foreign-currency investment vehicle may also be established to accommodate international investors. The initiative comes amid growing demand for long-term infrastructure financing across Nigeria and the wider African region, particularly in energy, transportation and digital connectivity. By connecting institutional investors with viable infrastructure opportunities, the proposed platform is expected to strengthen Nigeria’s capital markets, stimulate economic activity, improve connectivity, support business expansion and create opportunities for jobs and sustainable economic growth.