- Nigeria needs around $100 billion annually in infrastructure investments, and pension funds—despite their long-term suitability—currently allocate only 1.3% of assets to this sector due to concerns about project bankability and regulatory hurdles
- The PenOp Infrastructure Report reveals strong interest among pension fund managers in infrastructure, especially in power, transport, agriculture, and healthcare, but highlights the need for credit enhancements, policy consistency, and investable project pipelines
- Stanbic IBTC Infrastructure Fund has mobilised N280 billion into impactful projects, launched a N350 billion growth fund in 2025, and continues to drive sustainable infrastructure financing through domestic and foreign capital mobilisation
With estimates suggesting that Nigeria needs around $100 billion in investments each year for the next decade to help improve its infrastructure, there’s a huge opportunity for positive change and economic growth.
Many of us notice the everyday challenges: like power outages, busy health facilities, traffic congestion, and a shortage of affordable homes.
These issues can present challenges that sometimes slow down progress, making it more difficult for businesses to thrive and for Nigeria to compete on a global level.
However, they also highlight areas where targeted investments and innovative solutions can make a real difference for our communities and our economy.
For years, the government has attempted to bridge this gap through budgetary allocations and borrowing from both domestic and foreign sources. While these efforts are commendable, they have proven insufficient. The reality is apparent: Nigeria cannot rely on public finance alone. Mobilising private capital, especially from institutional investors, is one of the sustainable pathways to financing infrastructure that will power our economic growth.
Pension funds and opportunities in infrastructure
Among global private capital pools, pension fund assets are particularly well-suited for investments in infrastructure. As managers of long-term savings, pension fund capital is naturally aligned with the nature of long-term capital infrastructure investment.
Moreso, investment in infrastructure assets can deliver steady, inflation-linked cash flows over an extended period. Globally, infrastructure has evolved into a defensive asset class, enhancing yields, diversifying portfolios, and providing essential services.
In Nigeria, despite the modest growth in infrastructure investments, this potential remains somewhat underutilised. According to the Pension Funds Operators Association of Nigeria’s (PenOp) recent flagship Infrastructure report, pension funds’ investment in infrastructure is still around 1.3 per cent of total assets under management, even though regulations permit allocations of up to 10 per cent.
Historically, pension fund administrators have been cautious, citing concerns around project bankability, regulatory bottlenecks, and the overarching responsibility to safeguard contributors’ capital.
The inaugural PenOp Infrastructure Report provides valuable insights into how pension fund managers perceive the infrastructure asset class. The findings are instructive. Half of the fund managers surveyed identified the lack of bankable projects as the most significant barrier to investment.
At the same time, 55 per cent believe that infrastructure is the most attractive alternative asset class; and more than half are actively scouting opportunities. The report makes it clear that while challenges remain, there is a strong appetite within the pension fund industry to channel more capital into infrastructure, provided the right conditions are in place.
Opportunities for growth, challenges to overcome
Infrastructure investment is about enabling growth and improving lives. The PenOp report highlights power and transport sectors as the most attractive destinations for pension fund investment, given their direct impact on industrialisation, trade, and productivity.
There is also rising interest in agriculture and healthcare – two sectors critical to Nigeria’s human and food security. Agriculture requires modern storage, logistics and irrigation systems to unlock its potential, while healthcare needs upgraded facilities to meet the demands of a growing population.
Still, unlocking pension fund capital for infrastructure will require deliberate action. The report underscores the importance of credit enhancements to mitigate risks, transparent and consistent project execution to build confidence, and regulatory reforms and tax incentives to encourage investment. Nigeria needs a wider ecosystem of de-risking instruments, policy consistency, and credible pipelines of investable projects to crowd in pension capital.
Stanbic IBTC as a viable infrastructure financing conduit
Stanbic IBTC Infrastructure Fund continues to play a catalytic role in infrastructure investment while advancing dialogue, transparency and knowledge-sharing within the industry. We are convinced that access to credible data on projects is vital for informed decision-making about the broader infrastructure asset class
At Stanbic IBTC Asset Management, we prioritise curating value-creating and value-enhancing projects underpinned by sustainability and impact themes that deliver on critical outcomes to investors and other stakeholders.
Stanbic IBTC Infrastructure Fund has taken a lead on infrastructure financing in Nigeria, having supported projects with a cumulative value of N280 billion since inception. Aggregate revenues of the sponsors that Stanbic IBTC Infrastructure Fund has supported since inception are in excess of N900 billion. The Fund has made cash returns of over 35 per cent to its investors, and its unit price has appreciated by 13 per cent from N100 per unit at inception to N113 per unit as of 30 June 2025.
In under four years of operation, the Fund has paid over N24 billion in cash distributions to investors from a capital base of N70 billion. Projects financed by the Fund have significantly impacted local communities, generating over 5,000 direct and indirect jobs across various sectors. In addition to boosting employment, investments in road infrastructure under the RITC scheme have enhanced public infrastructure, providing reliable transport solutions to commuters and delivering essential healthcare services to individuals.
In 2025, we launched our N350billion Stanbic IBTC Infrastructure Growth Fund (SIIGF) – The core mandate is to provide equity investment into Infrastructure projects in Nigeria and Pan Africa. Our pipeline of infrastructure investment remains robust as we continue to mobilise domestic institutional capital as well as foreign capital at scale. With each of our projects, we are supporting the creation of a pathway to a sustainable financing of infrastructure projects, reducing reliance on external borrowing, stimulating industrialisation, and improving the quality of life for millions of Nigerians.
Achieving this requires coordinated action from government, regulators, development finance institutions (DFIs), and the private sector to create an enabling environment that gives pension funds the confidence to participate in infrastructure investment. This is too important a task to be left to any one stakeholder.
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