The National Pension Commission (PenCom) on Tuesday said it had pegged the minimum pension fund assets investment on infrastructure at N5 billion.
A statement by the PenCom Head, Communications, Mr Emeka Onuorah, in Lagos said the fund asset could be invested through infrastructure bonds or infrastructure fund.
PenCom’s draft statement would guide Pension Fund Administrators (PFAs) and other investors, who wanted pension fund asset to develop infrastructure in Nigeria.
According to the statement, both outlets must meet the conditions for pension fund investment in infrastructure before the PFAs can channel pension assets into such investments.
“As much as 15 per cent of the pension fund under management could be invested in infrastructure through infrastructure bonds. Another 5 per cent could be invested in infrastructure through infrastructure fund totalling 20 per cent of the total value of accumulated pension asset. For projects to qualify, they must be awarded to concessionaires with good track record, through a transparent bidding process.
“This will be in accordance with due process requirements, set out and certified by the Infrastructure Commission and Regulatory Commission Act (ICRC), and approved by the Federal Executive Council,” it said.
According to the statement, other conditions required that the projects business plans and financial projection must indicate they are financially and economically viable for pension fund investments. It said that the bond to finance the project must have enforceable redemption procedure, in the event of suspension or cancellation or changes in regulation or policy.
The statement said that for investment in infrastructure fund, the project must have defined and publicised investment objective and strategy, as well as disclosures of pricing of underlying assets. It said that PFAs were to ensure that Advisory Board had responsibility over audit functions, regarding evaluation of the project before investment.
According to the statement, PFAs will ensure that transactions with parties related to infrastructure fund managers and strategies involving divestiture of investment in which the Private Equity fund has interest. The statement confirmed that PenCom was still receiving inputs from stakeholders on how to make the infrastructure investment work in the overall benefits of all Nigerians.
