Pension sector to deploy $250m infrastructure fund

Nigeria’s pension industry has endorsed a phased $250 million infrastructure investment initiative, with pension fund operators expected to contribute $200 million as anchor investors over 10 years.

The Director-General of the National Pension Commission, Omolola Oloworaran, disclosed this recently in Lagos as part of activities to mark the national pension week

She said the Pension Industry Leadership Council had endorsed the phased launch of a Pension Industry Infrastructure Investment Consortium to channel long-term capital into productive infrastructure.

Under the proposed arrangement, pension fund operators would provide $200 million through cash calls over 10 years, while the remaining $50 million would be sought from development finance institutions.

Oloworaran said discussions with the development finance institutions were ongoing.

“For the first time, Nigeria’s pension industry has jointly committed its own funds to infrastructure,” she said.

She described the initiative as the beginning of a broader investment programme, noting that the commitment could expand as suitable investment opportunities emerged.

According to her, the initiative is intended to support Nigeria’s infrastructure financing needs while creating opportunities for pension funds to earn secure returns for contributors.

The PenCom chief, however, stressed that investments would be guided by rigorous project selection and strict protection of contributors’ interests.

Nigeria requires productive investment to support economic development, she said, adding that pension contributors must also benefit from investments through sound returns.

The initiative forms part of wider efforts to diversify pension fund investments and deploy retirement savings into real assets.

Oloworaran said the commission would continue to strengthen the regulatory framework governing the industry while ensuring that pension assets were managed prudently.

The proposed consortium represents a new approach to mobilising domestic institutional capital for infrastructure development, although the full investment programme will depend on its phased implementation and the outcome of discussions with prospective development finance partners.