Foreign and local pension funds are eyeing Australian infrastructure projects as safe investments that could create good rates of return, the Royal Bank of Scotland Group Plc said.

In a note to clients, the RBS said foreign lenders sought Australian infrastructure projects that could deliver steady returns and meet future payouts.

Other pension funds including that of Australia's and Canada's are also targeting to increase their allocation for local infrastructure and logistics-related projects, according to a report made by the Colonial First State, the fund management arm of the Commonwealth Bank of Australia.

Pension funds have turned to 5 to 10 year bonds issued by the federal government.

Scaling up the country's debts through higher bond issuance would not have an impact on the country's benchmark interest rates, the Colonial First State said.

With the country going through the biggest mining boom and domestic growth seen at more than 6 percent, further investments in infrastructure projects will be more beneficial from the medium to the long term.

According to a priority list for this year released by Infrastructure Australia in June, the government's advisory body identified about A$83 billion of projects, in addition to the A$43 billion national broadband network.