Africa has more than $4 trillion in domestic capital, including approximately $455 billion in pension fund assets. However, most of these funds remain locked into low-yielding short-term government bonds. According to the African Finance Corporation’s Africa State Infrastructure Report 2025, directing even a portion of this capital to energy and infrastructure could speed up development across key sectors while significantly reducing dependence on external financing.
International pension funds intervene
Several international pension funds have already started investing in Africa’s energy and infrastructure sector, playing a notable role in the continent’s development. In December 2024, Norwegian pension fund KLP, in partnership with Norfund, committed $80 million to Crossboundary Energy, a developer of commercial and industrial solar power and batteries. The funding is supporting the expansion of a $680 million asset portfolio consisting of approximately 500 MW of solar, wind and thermal power generation and 600 MWh of battery storage in 18 African countries. The portfolio serves a variety of sectors including mining, communications and industrial customers. Among its flagship projects is the Barama solar power + storage plant in Mozambique, which will power a graphite mine.
Meanwhile, the U.S. Export-Import Bank (EXIM) recently approved a $4.7 billion loan for TotalEnergies’ Mozambique LNG project, a large-scale liquefied natural gas facility. EXIM’s financing has helped attract a wide range of investors, including pensions and institutional investors, to support upstream gas development and related infrastructure.
Unlocking Africa’s Pension Capital
While international organizations are active, African pension funds themselves have significant untapped potential. The South African continent’s largest public servant pension fund has been instrumental in financing clean energy projects through its asset manager, the Public Investment Corporation (PIC). In 2024, PIC committed R310 million to local independent power producer Lifwo Energy Partners as part of a wider renewable energy strategy.
As of early 2025, PIC manages approximately $800 million in renewable energy investments and contributes more than 2,000 MW to the national grid. The Fund also plays a leading role in South Africa’s Renewable Energy Independent Power Producer Procurement Program, which encourages private sector participation in clean energy infrastructure.
In Nigeria, pension fund assets have increased to ₦22.5 trillion to ₦2.5 trillion, but less than 1.5% will be allocated to infrastructure as of 2025. This represents a significant opportunity for capital reform and reorientation. Kenya’s experience shows that this is possible. The Kenya Pension Fund Investment Consortium has already invested in three infrastructure projects, demonstrating growing interest and capacity among domestic funds.
A path to sustainable progress
Mobilizing pension funds, both domestically and internationally, could provide Africa with the long-term, patient finance it needs to build resilient energy systems and modern infrastructure. Investments in pension funds not only unlock financing, but also help align development with national priorities, provide stable returns, and promote local ownership of key assets. With the right regulatory framework, risk mitigation tools and investor confidence, Africa’s own capital can become one of the most powerful drivers for sustainable development.
