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    An investment institution of the Federation set up to manage funds in excess of budgeted hydrocarbon revenues.

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NSIA Funds

Nigeria Infrastructure Fund

The Nigeria Infrastructure Fund (NIF) is one of three distinct and ring-fenced funds managed by the Authority. It focuses entirely on domestic investments in selected infrastructure sectors, including motorways, healthcare, power and agriculture.

Objective

Enhance the development of infrastructure, primarily through investment in domestic infrastructure projects that meet targeted financial returns.

Initial %Assets Allocation & Size

40%

New % Allocation & Current Size**

50%

Strategic Asset Allocation / Focus Sectors
Agriculture Healthcare Motorways Power
Gas Industrialisation Financial markets Technology
Mandate / Recent Investments

  • Gas Industrialisation: Co-developing a US$1.4 billion Ammonia Plant with OCP of Morocco
  • Technology: Set up a US$200 million innovation fund for investments in Information technology in Nigeria
  • Agriculture: Set up a US$200 million agriculture fund with Old Mutual of SA
  • Healthcare: Invested US$22million in Cancer treatment and development of diagnostic centre in Nigeria.

Expected Average Annualized Returns

US CPI + 300 BPS

Investment Horizon

Long term > 20 yrs

The Fund’s mandate is to catalyse growth in the stock of infrastructure assets in the country. Unlike the SF and FGF – the Authority’s other core funds, which are outsourced to external fund managers – the NIF is managed by an in-house team of investment professionals tasked with identifying infrastructure investment opportunities, facilitating project development for potential investments, and recommending projects for investment to the Board.

The Nigeria Infrastructure Fund (NIF) aims to invest in domestic infrastructure projects that meet targeted financial returns and contribute to the development of essential infrastructure in order to stimulate the growth and diversification of the Nigerian economy, attract foreign investment and create jobs for Nigerians. Potential areas for investments include healthcare, transportation, energy and power, water resources and agriculture, amongst others. The Authority may invest up to a maximum of 10% of the funds in NIF in social infrastructure projects, which promote economic development in underserved sectors or regions in the country.

In pursuit of the objectives of the NIF, a Five-Year Infrastructure Investment rolling plan (the Five-Year Plan) has been prepared to provide strategic guidance for NIF investments. Furthermore, an Infrastructure Fund Investment Policy Statement (IPS) was also developed. The IPS provides an investment framework for the NIF, setting out the NIF’s investment objectives, risk tolerance and constraints. The IPS was adopted by the Board of Directors in Q4 2013.

The NSIA infrastructure strategy is anchored on three pillars:

  1. Direct investment in infrastructure projects or companies.
  2. Co-investment strategy via the establishment of co-investment funds.
  3. Creation of institutions that support infrastructure development.

The Authority received an additional contribution of US$250 million from the Federal Government in 2020. In accordance with its fund allocation, 50% of the new contribution (US$125 million) was allocated to the NIF for domestic investments in selected infrastructure sectors.

The Five Year Rolling Plans

In accordance with the NSIA Act, each year, a Five-Year Infrastructure Investment rolling plan is to be developed pursuant to such strategies, regulations, policies, and guidelines as it may determine to be most effective to achieve its objectives.

These objectives include supporting, through investment predicated upon financial returns to NSIA, the development in Nigeria of essential infrastructures such as power generation, distribution and transmission infrastructure, healthcare infrastructure, real estate, agriculture, transport infrastructure, and water resources infrastructure, amongst others. This is to stimulate the growth and diversification of the Nigerian economy, attract foreign investment and create jobs for Nigerians.

Sectors

Choosing the Focus Sectors

Agriculture

  • 04 -
  • Farms

Power

  • 01 -
  • Power Plant

Gas Industrialization

  • 01 -
  • Refinery Service

Healthcare

  • 03 -
  • Health Centers

Mining & Basic Minerals

  • 01 -
  • Minings

Technology

  • 01 -
  • technology

Motorways

  • 03 -
  • Transportation
In narrowing down to the Focus sectors for the Five-Year Plan, management consulted with relevant sector experts, regulatory agencies, strategic partners, Ministries, Department and Agencies (MDA’s) etc. Management focused on sectors of:
  • National priority and potential for nationwide economic development impact
  • Potential for attractive commercial and social returns
  • Conducive regulatory environment and
  • Ability to unlock private sector participation.

The Focus Sectors

The Authority’s strategy for agriculture lends itself to the country’s food security programmes. In the Authority’s opinion, Nigeria has the potential to be food-secure if the following strategies are adopted and implemented: rural development, provision of easy access to basic farm inputs, adequate budgetary allocations to agriculture particularly to the food crop sub-sector, the enunciation of appropriate policies for food crop sub-sector, political stability, reduction in rural poverty, and peasant farmers education.

NSIA’s goal is to make investments that assist the country across the agriculture value chain including but not limited to direct investment in agriculture projects, manpower development, provision of affordable long-term capital and technical assistance, supporting out-grower schemes, identifying, and developing sustainable agri-based projects, development of solutions that enable standardization through commodity exchanges and provision of input material for the farmers.

Over the years NSIA has made investments in the Fund for Agricultural Finance in Nigeria (FAFIN) alongside the Federal Ministry of Agriculture and Rural Development (FMARD) and Kreditanstalt für Wiederaufbau (KfW), the German Government-owned development bank. NSIA acquired and modernised an integrated farm in Nasarawa State, Panda Agri-Novum. Regarding input, NSIA was the operating entity for the Presidential Fertiliser Initiative (PFI) through NAIC-NPK Ltd until 2021 when it was transferred to the Ministry of Finance Incorporated (MOFI).

NSIA is committed to serving as an enabler to fill in noticeable voids in the Financial Market Infrastructure (FMI) landscape in Nigeria. The Authority is of the view that there are critically important institutions which need to be developed in Nigeria. These institutions include those that will be responsible for providing clearing, settlement and recording of monetary and other financial transactions in the country.

NSIA is supporting the creation of an ecosystem of institutions to address critical gaps in Nigeria’s financial systems. The institutions operationalized so far include:

  • Infrastructure Credit Guarantee Company Ltd (InfraCredit)
  • Development Bank of Nigeria (DBN)
  • Nigeria Mortgage Refinance Company (NMRC)
  • Family Homes Fund Ltd
  • NG Clearing Ltd

 

At inception, NSIA conducted a review of the Nigerian healthcare sector. We identified three segments within the sector to pursue investment opportunities.

These include:

  • Tertiary specialist hospitals: Investment in hospitals providing healthcare focused on non-communicable diseases. Within this segment, NSIA will seek partnerships with existing public hospitals to leverage the breadth of clinical capacity at these establishments.
  • Medical diagnostic facilities: Investments in this segment would focus on establishing modern medical diagnostic facilities either as standalone facilities or joint venture partnerships with public hospitals.
  • Medical manufacturing: Investments in greenfield or brownfield pharmaceutical manufacturing facilities, or other medical equipment and supplies manufacturing facilities.

To date, NSIA, through its healthcare investment subsidiary, NSIA Healthcare Investment and Development Company (NHDIC), has built and commissioned three healthcare centres namely: a Cancer treatment centre in Lagos, the NSIA-LUTH Cancer Centre and two diagnostic centres; NSIA-Umuahia Diagnostic Centre (NUDC) and NSIA-Kano Diagnostic Centre (NKDC).

As it rolls out more projects, NSIA aims to establish at least 23 state-of-the-art, healthcare centres of excellence across the country as well as tertiary specialist hospitals to undertake advanced surgery and medical care.

NSIA’s objective remains to advance Nigeria’s power generation and distribution capabilities. The Authority is of the view that reliable power supply is essential to Nigeria’s future growth prospects, particularly in light of the nation’s focus on job creation and the development of an industrial base. With the ongoing transformation of Nigeria’s power sector, NSIA continues to evaluate opportunities alongside private investors across the power sector value chain. We are seeing an increasing number of attractive investment opportunities in renewable energy.

In terms of projects undertaken, NSIA is the process of developing of the largest solar farm in Nigeria. The NSIA is overseeing the investment and Installation of a brand new 10MW solar plant on 24ha of land in Kumbotso Local Government, Kano State to feed an industrial cluster. The project is expected to create at least 500 direct and indirect jobs across the construction and operational phases of the project.

NSIA is also in advanced discussions in respect of a number of partnership opportunities with institutional players and development institutions interested in early-stage investments in thermal, solar, and hydro power generation.

The Nigerian technology ecosystem is hampered by a deficiency in digital infrastructure including but not limited to stable broadband internet and widespread mobile adoption that enables innovators to build and distribute their products and services. There is also a significant dearth of digital talent to build and scale domestic technological solutions thereby inhibiting the growth of the sector.

NSIA aims to invest in mid-to-late-stage technology and innovative ideas that leverage the intellectual capital of Nigerian enterprises, critical digital infrastructure for growing the industry, and high-growth Nigerian companies with strategic importance and relevance for job creation, national security, and economic growth.

The NSIA established a US$200 million Innovation Fund to serve as a catalyst for developing the technology ecosystem in Nigeria, with a seed commitment of US$25 million from NSIA. The fund is designed to invest in projects that promote local innovation and technology, an support to first-time patent seekers in the technology sector. The fund will focus on developments in areas such as agri-tech, pharmacology, biotechnology, data networking and storage, and fintech.

The Authority’s pioneer investment in the technology sector was for the development of the Kasi 20MW hyperscale data centre. The project sponsor, Kasi Cloud Nigeria Limited has identified Lekki, Lagos as the site of the first data centre and expects to set up more data centres nationwide in the near future.

NSIA is also in advanced discussions in respect of several partnership opportunities with leading global technology firms interested in the deployment of subsea cable systems, terrestrial fibre networks, technology cities/parks and training platforms.

The NSIA is actively pursuing investments in road infrastructure delivery and maintenance to improve the general state of the roads, reduce the funding burden on the Federation Account and introduce private sector efficiencies to the procurement, delivery and management of road infrastructure.

The Presidential Infrastructure Development Fund (PIDF) is an initiative of President Muhammadu Buhari and is managed by the Nigeria Sovereign Investment Authority (NSIA). PIDF was conceived in 2018 as the President’s initiative to accelerate the execution of certain critical, strategic infrastructure projects essential to the rapid growth and modernization of Nigeria’s economy.

At inception, there were 5 projects under PIDF namely (i) Lagos-Ibadan Expressway (LIE), (ii) Second Niger Bridge Project (2NB); (iii) Abuja-Kano Road (AKR), (iv) Mambilla Hydro- Power Project (Mambilla) and (v) East-West Road (EWR). The EWR project was removed from the PIDF Portfolio based on the request of the Federal Ministry of Niger Delta Affairs (FMNDA), to enable the FMNDA to undertake the EWR project as a public works contract. This request was approved by the President in a directive communicated on June 8, 2020. Further, the Mambilla Project is yet to be fully developed to enable NSIA to participate in the project.

The LIE, 2NB and AKR projects are currently under implementation. NSIA is responsible for administering the financing required to develop the Ongoing Projects. The three roads will be commercialised through tolling, concessions, marketing, and other revenue-generating strategies.

In the Authority’s view, Nigeria has an opportunity to leverage its vast gas resources to quicken industrialisation. NSIA’s major objective for the gas sector is to transform Nigeria into an industrialised nation with gas playing a major role in the country’s economic transformation agenda. NSIA views gas development as a catalyst for economic diversification and industrialization.

Under a partnership programme with OCP of Morocco, NSIA is presently developing a Diammonium Phosphate and Ammonia plant. The project is a backward integration initiative, which will ensure that Nigeria is able to produce Ammonia, a basic input in fertiliser production.

Presently, the Authority is building our 750,000 MT Ammonia plant in Akwa Ibom State. The project called, the Multipurpose Industrial Platform Ltd (MIPL). The project is a backward integration initiative which will ensure that Nigeria is able to produce Ammonia, a basic input in fertiliser production. The MIPP plant, on completion, will produce 750,000MT per annum of Ammonia; part of this Ammonia, combined with Phosphoric and Sulphuric acids will be combined to further produce 1 million MT per annum of Diammonium Phosphate (DAP) and NPK fertilizers. The domestic market in Nigeria will be the primary beneficiary, whilst excess Ammonia will be exported to Morocco.

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Nigeria’s Sovereign Wealth Fund
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