``We have conceptualised plans to raise $500 mn from the overseas market for funding infrastructure projects including the road sector,'' Subramanyam said while addressing the international conference on express highways development in India here.

Subramanyam said Indian capital markets could play an important role in raising resources for road projects in the next decade. However, this will depend on designing and using easily transferable financial instruments that unbundled risks.

For instance, during the initial period of the project construction, these may be held by development financial institutions and transferred to mutual funds, provident funds (PFs) and insurance companies once the projects generated positive cashflows.

PFs, pension funds and insurancecompanies can also directly invest in bonds issued by development financial institutions, with banks and infrastructure development finance company (IDFC) providing market making and credit enhancement support, he added.

``When these arrangements are in place, investment institutions like UTI could invest in short-term and long-term schemes in debt and preferential shares convertible into bonds or equity of road projects,'' Subramanyam said.

UTI will also find it easier to float offshore funds to attract foreign funds into Indian road projects, he added. These offshore firms may also need the facility of take-out financing and active secondary market after the initial project construction period was over, he said.