Japan had earlier shown eagerness to invest Rs.4.5 billion in setting up a university in Nalanda.

Nobel laureate Amartya Sen will head a panel that will oversee the establishment of the international university in Nalanda and its first meeting will be held in Singapore in July.

The proposed university will be fully residential, like the ancient seat of learning at Nalanda. In the first phase of the project, seven schools with 46 foreign faculty members and over 400 Indian academics would be established.

The university will impart courses in science, philosophy and spiritualism along with other subjects. A renowned international scholar will be its chancellor.

The idea of the university was first mooted in the late 1990s but it was President A.P.J. Abdul Kalam's initiative in early 2006 that gave shape to the project at the ancient site of Buddhist learning.

The excavated site of the ancient university at Nalanda is protected as a place of national importance. The university was home to over 10,000 students and nearly 2,000 teachers.

Japan will also help Bihar for development of the Buddhist circuit to create facilities of international standards, including roads and hotels. During his meeting with Chief Minister Nitish Kumar Monday, Motoyasu requested him to build a four-lane highway to connect the Buddhist circuit.

He said the Buddhist circuit including Bodh Gaya, Nalanda and Rajgrih would emerge as major international tourist destination if developed and promoted properly.

Last year, the Japan Bank of International Corporation (JBIC) had agreed in principle to give a Rs.14 billion loan to the Bihar government for development of Patna, including improvement of its sewage system, water supply and setting up of solid waste management system.

Early this year, the JBIC also agreed to fund the construction of three highways under the Buddhist circuit in Bihar at a substantially low interest rate.