Pension funds could bridge Africa’s $200bn energy investment gap, says industry leaders

Africa’s $250 billion pension fund assets could be a game-changer for closing the continent’s widening oil and gas financing gap if channelled into critical energy infrastructure, industry leaders have said.

Speaking at the African Refiners and Distributors Association (ARDA) Week Conference in Cape Town, Rene Awambeng, founder and managing partner of Premier Investment Solutions, said redirecting pension funds into projects such as refineries, pipelines and storage facilities would not only secure fuel supply but also drive national development.

He pointed to Nigeria’s $300 million diaspora bond as proof that local financing models can succeed, warning that with Western banks scaling back fossil fuel funding over climate policies, African countries must look inward for capital.

Awambeng called for regulatory reforms to allow pension funds—particularly in South Africa, Nigeria, Kenya, Morocco, Botswana and Namibia—to support large-scale infrastructure. He argued that current restrictions and risk-averse strategies are limiting their potential impact.

Dele Kuti, global head of energy and infrastructure at Standard Bank Group, emphasised that project funding must be disciplined, with strong equity contributions, clear repayment timelines, and robust risk management. “Funding must match project timelines—financial viability should be clear well before the eighth year,” he said.

Anibor Kragha, ARDA executive secretary, said mobilising domestic capital from pension funds, insurance pools and sovereign wealth funds—worth over $4 trillion globally—was essential to meeting Africa’s $200 billion annual energy infrastructure needs.

He urged empowered regulators, cross-border trade liberalisation, and innovative tools such as carbon credits, blended finance and guarantees to reduce investment risks.

Kragha also pressed for the creation of strategic fuel reserves, warning that many African countries currently have only a few days’ supply, leaving them vulnerable to disruptions. Regional stockholding frameworks, funded by modest levies and backed by robust reporting, could strengthen resilience without burdening consumers.

“Energy sovereignty must become a continental priority, not just for growth, but for long-term resilience and prosperity,” Kragha said.