SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934

                  For the calendar year ended December 31, 2000
                          Commission File No. 333-00608

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

             (Exact name of registrant as specified in its charter)

  Philippines                                               Not applicable
  -----------                                               --------------
  (State or other                                           (IRS Employer
  jurisdiction of incorporation                             Identification No.)
  or organization)

  24th Floor 6750 Building, Ayala Avenue                    Not applicable
  --------------------------------------                    --------------
  Makati, Manila, Philippines                                  (Zip Code)
  ---------------------------
  (Address of principal executive offices)

       Registrant's telephone number, including area code: (632) 892-0276
                                                           --------------

         Securities registered pursuant to Section 12(b) of the Act: N/A

         Securities registered pursuant to Section 12(g) of the Act: N/A

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days:

                           Yes    X                  No
                              ----------               ----------

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  Registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

     All Common Stock of the Company is held by the original shareholders.

     767,162 shares of Common Stock, $0.038 par value, were outstanding on March
29, 2001.


<PAGE>


                                TABLE OF CONTENTS

PART I........................................................................4
ITEM 1.  BUSINESS.............................................................4
   General....................................................................4
   Project....................................................................4
   Terms of the Securities....................................................8
    General...................................................................8
    Payment of Principal and Interest.........................................8
    Priority of Payments.....................................................10
    Debt Service Reserve Fund................................................11
    Optional Redemption......................................................11
    Mandatory Redemption.....................................................11
    Change in Control Put....................................................12
    Distributions............................................................12
    Ranking and Security for the Securities..................................12
    Ratings..................................................................13
    Nature of Recourse on the Securities.....................................13
    Incurrence of Additional Debt............................................13
    Principal Covenants......................................................15
   Insurance.................................................................15
   Regulatory Matters........................................................16
   Employees.................................................................16
ITEM 2.  PROPERTIES..........................................................17
ITEM 3.  LEGAL PROCEEDINGS...................................................17
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................17
PART II......................................................................18
ITEM 5.  MARKET FOR COMPANY'S EQUITY AND RELATED STOCKHOLDER MATTERS.........18
ITEM 6.  SELECTED FINANCIAL DATA.............................................18
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATION........................................18
ITEM 7A.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.........21
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................22
   Report of Independent Public Accountants..................................23
   Report of Independent Public Accountants..................................24
   Balance  Sheets...........................................................25
   Statements of Operations..................................................26
   Statements of Changes in Stockholders' Equity.............................27
   Statements of Cash Flows..................................................28
   Notes to Financial Statements.............................................29
ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL  DISCLOSURE.......................................37
PART III.....................................................................38
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY....................38
ITEM 11.  EXECUTIVE COMPENSATION.............................................40
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....40
   Description of Capital Stock..............................................40
   Principal Holders.........................................................41
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTION......................42
PART Iv......................................................................43
ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES ON FORM 8-K...........43
SIGNATURES...................................................................44
INDEX TO EXHIBITS............................................................45



<PAGE>


PART I

Item 1.  Business

General
-------
CE Casecnan  Water and Energy  Company,  Inc.  ("Company" or "CE Casecnan") is a
privately  held  Philippine  corporation  formed in  September of 1994 solely to
develop,  construct,  own and  operate the  Casecnan  project,  a  multi-purpose
irrigation   and   hydroelectric   power  facility  with  a  rated  capacity  of
approximately  150  Megawatts  ("MW")  located  on the  island  of  Luzon in the
Republic of the Philippines  (the "Casecnan  Project").  After the completion of
construction  of the  Casecnan  Project,  the Company is expected to be owned at
least 70% (subject to upward  adjustment  based upon the actual economics of the
Casecnan  Project at commencement  of commercial  operations and the exercise of
certain  options  by a third  party)  by  MidAmerican  Energy  Holdings  Company
("MidAmerican")  through its wholly owned  indirect  subsidiary CE Casecnan Ltd.
The ownership  percentage  held by the minority  shareholders  may be reduced in
certain  circumstances  and  such  reduction  would  result  in a  corresponding
increase in the  ownership  percentage  of the  Company  held by  affiliates  of
MidAmerican.

The Securities (described herein) are recourse only to the Company.  MidAmerican
has not  guaranteed  directly or indirectly  the payment or  performance  of any
Company obligations.

The Company's principal executive office is located at 24th Floor 6750 Building,
Ayala Avenue,  Makati City,  Philippines,  and its telephone  number is 63 2 892
0276.  The  Company's  principal  office will be located in  Pantabangan  in the
Province of Nueva Ecija, Philippines upon commencement of commercial operations.

Project
-------

The Casecnan  Project is located in the central part of the island of Luzon.  It
consists generally of diversion  structures in the Casecnan and Taan Rivers that
will  capture and divert  excess  water in the  Casecnan  watershed  by means of
concrete, in-stream diversion weirs and transfer that water through a transbasin
tunnel of approximately  23 kilometers  (including the intake adit from the Taan
to the  Casecnan  River),  with a  diameter  of  approximately  6.5 meters to an
existing underutilized water storage reservoir at Pantabangan.  During the water
transfer,  the  elevation  differences  between  the two  watersheds  will allow
electrical  energy  to be  generated  at a new 150 net MW rated  capacity  power
plant, which is being constructed in an underground powerhouse cavern located at
the end of the water tunnel. A tailrace discharge tunnel of


<PAGE>


approximately  three kilometers will deliver water from the water tunnel and the
new powerhouse to the  Pantabangan  Reservoir,  providing  additional  water for
irrigation and increasing the potential electrical  generation at two downstream
existing  hydroelectric  facilities of the Philippine National Power Corporation
("NPC"),  the  government-owned  and controlled  corporation that is the primary
supplier of electricity in the Philippines.  Since the water has been determined
to remain suitable for irrigation  throughout the Casecnan Project operations of
capturing,  diverting and transferring the water,  other than removing sediments
at the  diversion  structures,  no  treatment  will  be  required.  Once  in the
reservoir  at  Pantabangan,  the water will be under the control of, and for the
use of the Philippine National Irrigation Administration ("NIA").

The Casecnan  Project's  diversion  structures  will be capable of storing flows
from the Casecnan and Taan Rivers over a number of hours,  and then  discharging
that stored water through the transbasin tunnel and new powerhouse during the 12
hours (8:00 a.m.  through  8:00 p.m.)  coinciding  with peak  electrical  demand
hours.  Tunnel flows and water depths  behind the diversion  structures  will be
regulated by in-tunnel valves in front of the powerhouse  turbines controlled by
the operators at the powerhouse control room.

In early 1994,  President Fidel Ramos  recognized the need for an irrigation and
hydroelectric project that would provide increased water flows for irrigation to
the  rice  growing  area of  Central  Luzon,  would  be  environmentally  sound,
technically  feasible and economically  viable, and would involve no flooding or
relocation  of  local  residents.  At that  time,  he  directed  the  Philippine
Department  of  Agriculture  and  NPC to work  together  with  other  interested
agencies to develop a combined  irrigation and  hydroelectric  project.  Shortly
thereafter,  the  Philippine  government  was  approached  by the Company with a
proposal  for  a  project  to  be   developed   in  the   Casecnan   area  on  a
build-own-operate-transfer  ("BOOT") basis,  that is, an arrangement under which
the Company as developer would agree to build during the construction period and
thereafter  own and operate the Casecnan  Project for a twenty-year  cooperation
period,  after which ownership and operation of the Project would be transferred
to NIA and NPC at no cost on an  "as-is"  basis.  After  conclusion  of a public
solicitation  for  competing  proposals,  NIA  selected  the Company as the BOOT
developer  and entered into a project  agreement  with the Company (the "Project
Agreement").  The Casecnan Project was  subsequently  designated a high priority
project  under  Republic  Act No. 529 by the National  Economic and  Development
Authority of the Philippines.

CE Casecnan is constructing  the Casecnan Project under the terms of the Project
Agreement between CE Casecnan and NIA. Under the Project Agreement,  CE Casecnan
will develop,  finance and construct the Casecnan  Project over the construction
period,  and thereafter  own and operate the Casecnan  Project for 20 years (the
"Cooperation Period"). During the Cooperation Period, NIA is obligated to accept
all deliveries of water and energy, and so long as the Casecnan


<PAGE>


Project is  physically  capable of operating and  delivering in accordance  with
agreed  levels set forth in the  Project  Agreement,  NIA will pay CE Casecnan a
fixed fee for the delivery of a minimum  volume of water and a fixed fee for the
delivery of a minimum amount of electricity. In addition, NIA will pay a fee for
all  electricity  delivered  in excess of a  threshold  amount up to a specified
amount.  NIA will sell the  electricity  it  purchases  to NPC,  although  NIA's
obligations  to CE Casecnan  under the Project  Agreement  are not  dependent on
NPC's  purchase of the  electricity  from NIA.  All fees to be paid by NIA to CE
Casecnan  are payable in U.S.  dollars.  The fixed fees paid for the delivery of
water and energy,  regardless  of the amount of  electricity  or water  actually
delivered,  are expected to provide approximately 70% of CE Casecnan's revenues.
At the end of the Cooperation  Period,  the Casecnan Project will be transferred
to NIA for no additional consideration on an "as is" basis.

The Project Agreement  provides for additional  compensation to CE Casecnan upon
the occurrence of certain events,  including  increases in Philippine  taxes and
adverse   changes  in  Philippine  law.  Upon  the  occurrence  and  during  the
continuance of certain force majeure  events,  including  those  associated with
Philippine  political  action,  NIA may be obligated to buy the Casecnan Project
from CE  Casecnan at a buy out price  expected to be in excess of the  aggregate
principal amount of the outstanding CE Casecnan debt  securities,  together with
accrued but unpaid interest.

The Republic of the  Philippines  has provided a Performance  Undertaking  under
which NIA's  obligations  under the Project Agreement are guaranteed by the full
faith and credit of the Republic of the Philippines.  The Project  Agreement and
the  Performance  Undertaking  provide for the resolution of disputes by binding
arbitration in Singapore under international arbitration rules.

NIA's  payment  obligations  under the Project  Agreement are expected to be the
Company's sole source of operating revenues. Because of the Company's dependence
on NIA, any material failure of NIA to fulfill its obligations under the Project
Agreement and any material failure of the Republic of the Philippines to fulfill
its obligations under the Performance Undertaking would significantly impair the
ability of the Company to meet its obligations under the Securities.

CE Casecnan  financed a portion of the costs of the Casecnan Project through the
issuance of  $125,000,000  of its 11.45% Senior  Secured Series A Notes due 2005
(the "Series A Notes") and  $171,500,000  of its 11.95% Senior  Secured Series B
Bonds due 2010 (the  "Series B Bonds")  and  $75,000,000  of its Senior  Secured
Floating Rate Notes due 2002,  pursuant to an indenture dated November 27, 1995,
as amended to date (the "Casecnan Indenture").


<PAGE>




The Casecnan Project was initially being constructed  pursuant to a fixed-price,
date-certain,  turnkey  construction  contract (the "Hanbo Contract") on a joint
and several  basis by Hanbo  Corporation  ("Hanbo")  and Hanbo  Engineering  and
Construction Co., Ltd. ("HECC"), both of which are South Korean corporations. As
of May 7, 1997,  the Company  terminated  the Hanbo  Contract due to defaults by
Hanbo and HECC including the insolvency of each such company.  On the same date,
the Company entered into a new fixed-price,  date certain,  turnkey engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan Project (the  "Replacement  Contract").  The work under the Replacement
Contract is being conducted by a consortium  consisting of Cooperativa  Muratori
Cementisti  CMC di Ravenna and Impresa  Pizzarotti & C. Spa.,  working  together
with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,  Black &  Veatch  and  Colenco  Power
Engineering Ltd. (collectively, the "Contractor").

On  November  20,  1999,  the  Replacement  Contract  was  amended to extend the
Guaranteed  Substantial  Completion  Date for the Casecnan  Project to March 31,
2001. This amendment was approved by the lender's independent engineer under the
Casecnan Indenture. In January 2001, the Company received a new working schedule
from  the  Contractor  that  showed  a  completion  date  of  August  31,  2001.
Accordingly,  the Casecnan Project is now expected to become  operational by the
third quarter of 2001.  The delay in completion is  attributable  in part to the
collapse in December 2000 of the Project's  partially  completed  vertical surge
shaft and the need to drill a replacement surge shaft.

The receipt of the working  schedule does not change the Guaranteed  Substantial
Completion  Date under the  Replacement  Contract,  and the  Contractor is still
contractually  obligated  either to complete the Project by March 31, 2001 or to
pay delay liquidated  damages.  As a result of receipt of the working  schedule,
however,  the  Company has sought and  obtained  from the  lender's  independent
engineer  approval  for a  revised  construction  schedule  under  the  Casecnan
Indenture.  In connection with the revised schedule, the ultimate parent company
of CE Casecnan agreed to make available up to $11.6 million of additional  funds
under certain conditions pursuant to a Shareholder Support Letter dated February
8, 2001 (the  "Shareholder  Support Letter") to cover additional costs resulting
from the Contractor's schedule delay.

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber  of  Commerce  seeking  an  extension  of the  Guaranteed
Substantial  Completion  Date  by up to  153  days  through  August  31,  2001 -
resulting  from  various  alleged  force  majeure  events.  In a March 20,  2001
Supplement to Request for  Arbitration,  the Contractor also seeks  compensation
for alleged  additional  costs it incurred from the claimed force majeure events
to the extent it is unable to recover  from its  insurer.  CE Casecnan  believes
such  allegations  are  without  merit and  intends  to  vigorously  defend  the
Contractor's claims.

Under the Project Agreement, if NIA is able to accept delivery of water into the
Pantabangan  Reservoir and NPC has completed the Project's related  transmission
line,  the  Company is liable to pay NIA $5,500 per day for each day of delay in
completion of the Casecnan  Project beyond July 27, 2000,  increasing to $13,500
per day for each day of delay in completion  beyond November 27, 2000.  Although
the  transmission  line is complete,  NIA has not yet  installed  the  Project's
metering equipment. Accordingly, no liquidated damages payments to NIA have been
made.
<PAGE>

The  Company's  ability  to make  payments  on any of its  existing  and  future
obligations  is  dependent  on  NIA's  and  the  Republic  of  the  Philippines'
performance of their obligations under the Project Agreement and the Performance
Undertaking,  respectively.  Except to the extent expressly  provided for in the
Shareholder  Support  Letters,  no  shareholders,  partners or affiliates of the
Company, including MidAmerican,  and no directors,  officers or employees of the
Company  will  guarantee  or be in any way liable for  payment of the  Company's
obligations.  As a result, payment of the Company's obligations depends upon the
availability  of  sufficient  revenues  from the  Company's  business  after the
payment of operating expenses.

There are pending bills before the Philippine Congress and the Philippine Senate
aimed at  restructuring  the  electric  industry,  privatization  of the NPC and
introduction of a competitive  electricity market,  among others. The passage of
the bills may have an impact on the Company's future operations and the industry
as a whole, the effect of which is not yet determinable and estimable.

Terms of the Securities
-----------------------

General

In  November  1995,  the  Company  issued  and sold (i)  $125,000,000  aggregate
principal  amount of the 11.45% Senior  Secured  Series A Notes due November 15,
2005 ("Series A Notes"), (ii) $171,500,000  aggregate principal amount of 11.95%
Senior  Secured  Series B Bonds due  November 15, 2010  ("Series B Bonds"),  and
(iii) $75,000,000  aggregate principal amount of LIBOR Plus 3.00% Senior Secured
Floating  Rate Notes due November 15, 2002  ("FRNs"),  collectively  referred to
herein as the  "Securities".  The FRNs rank pari  passu  with and will share the
collateral  on a pro rata  basis  with the Series A Notes and the Series B Bonds
and are entitled to the benefits of the Indenture and the Depositary Agreement.

The  Securities  are direct  obligations  of the Company,  secured solely by the
Company collateral.

Payment of Principal and Interest

Interest on the Securities is payable  semiannually  on each May 15 and November
15 (the  "Securities  Interest  Payment Date"),  commencing May 15, 1996, to the
registered Holders thereof at the close of business on the May 1 and November 1,
as the case may be, preceding each Securities Interest Payment Date. The initial
average life of the Series A Notes was 8.84 years,  and the initial average life
of the Series B Bonds was 11.57 years.
<PAGE>

The  $125,000,000  principal  of the  Series A Notes due  November  15,  2005 is
payable in semiannual installments, commencing May 15, 2003, as follows:

                       Percentage of Principal
Payment Date               Amount Payable

May 15, 2003                   13.50%
November 15, 2003              13.50%
May 15, 2004                   17.00%
November 15, 2004              17.00%
May 15, 2005                   19.50%
November 15, 2005              19.50%

The  $171,500,000  principal  of the  Series B Bonds due  November  15,  2010 is
payable in semiannual installments, commencing May 15, 2002, as follows:

                       Percentage of Principal
Payment Date               Amount Payable

May 15, 2002                   2.50%
November 15, 2002              2.50%
May 15, 2003                   2.25%
November 15, 2003              2.25%
May 15, 2004                   2.00%
November 15, 2004              2.00%
May 15, 2005                   1.75%
November 15, 2005              1.75%
May 15, 2006                   10.50%
November 15, 2006              10.50%
May 15, 2007                   11.00%
November 15, 2007              11.00%
May 15, 2008                   11.00%
November 15, 2008              11.00%
May 15, 2009                   4.00%
November 15, 2009              4.00%
May 15, 2010                   5.00%
November 15, 2010              5.00%




<PAGE>


The  $75,000,000  principal  of the FRNs due  November  15,  2002 is  payable in
semiannual installments, commencing November 15, 2000, as follows:

                      Percentage of Principal
Payment Date               Amount Payable

November 15, 2000              25.00%
May 15, 2001                   19.50%
November 15, 2001              20.00%
May 15, 2002                   18.00%
November 15, 2002              17.50%

The FRNs bear  interest  at LIBOR  plus  3.00%  per  annum  and will be  payable
quarterly on each February 15, May 15, August 15, and November 15, commencing on
February 15, 1996, to the registered Holders thereof at the close of business on
the preceding February 1, May 1, August 1, and November 1, as the case may be.

Priority of Payments

Prior  to  completion  of the  Casecnan  Project  pursuant  to  the  Replacement
Contract, all net proceeds of the Securities and any liquidated damages proceeds
will be deposited  in the  Construction  Fund and  disbursed to pay for budgeted
construction  or  restoration  costs,  including  interest  and, if  applicable,
principal on the Securities.

After  completion,  except as  otherwise  provided for with respect to mandatory
redemptions  and loss  proceeds,  all revenues  received by the Company from the
Casecnan Project will be paid into the Revenue Fund maintained by the Depositary
(other than  certain peso  payments  required to be used for VAT payments to the
Republic  of the  Philippines).  Amounts  paid into the  Revenue  Fund  shall be
distributed  in the  following  order  of  priority:  (a) to pay  operating  and
maintenance costs; (b) to pay certain administrative costs of the agents for the
Secured Parties under the Financing Documents;  (c) to pay principal of, premium
(if any) and interest on the Securities (including any increased costs necessary
to gross up such payments for certain  withholding  taxes and other  assessments
and  charges),  and  principal and interest on other senior debt, if any; (d) to
cause the Debt  Service  Reserve  Fund to equal the Debt  Service  Reserve  Fund
Required  Balance,  as defined below;  (e) to pay  indemnification  expenses and
other  expenses to the Secured  Parties and certain other costs,  and (f) to the
Distribution Fund or Distribution Suspense Fund, as applicable.


<PAGE>


Debt Service Reserve Fund

At completion,  the Company will  establish a Debt Service  Reserve Fund for the
benefit of the Holders of the Securities,  which will be funded in cash from any
remaining shareholder capital contributions in the Capital Contribution Fund or,
to the extent required,  from operating revenues as described under "Priority of
Payments"  above.  Such amounts will be deposited into the Debt Service  Reserve
Fund  from  time to time to the  extent  required  to cause it to equal the Debt
Service  Reserve Fund  Required  Balance  which is intended to  approximate  the
highest  amount of the  payments  of  principal  and  interest to be made on the
Securities during any semiannual period over the subsequent three years.

Optional Redemption

On and after the  seventh  anniversary  of the  closing (as defined in the Trust
Indenture) of the Casecnan Project financing,  the Series A Notes are subject to
optional  redemption  by the  Company,  in whole  and not in  part,  at par plus
accrued interest to the Redemption Date.

The Series B Bonds are subject to optional  redemption  by the  Company,  at any
time,  in whole or in part,  pro  rata,  at par  plus  accrued  interest  to the
redemption  date plus a premium,  calculated to "make whole" to comparable  U.S.
treasury securities plus 150 basis points.

After completion,  the FRN's are subject to optional  redemption by the Company,
in whole or in part, pro rata at par plus accrued interest,  on any FRN interest
payment date.

The Company also has the option to redeem the  Securities,  in whole or in part,
at par plus  accrued  interest  at any time if,  as a result  of any  change  in
Philippine tax law or in the application or interpretation of Philippine tax law
occurring after the date of issuance of the Securities,  the Company is required
to pay certain additional amounts described in the Indenture.

Mandatory Redemption

The  Securities  are  subject to  mandatory  redemption,  pro rata,  at par plus
accrued  interest to the redemption date, (a) upon the receipt by the Company of
loss proceeds  that exceed $15 million in respect of certain  events of property
or casualty loss or similar  events,  unless the funds are to be utilized by the
Company for an Approved Restoration Plan; or (b) upon the receipt by the Company
of proceeds realized in connection with a Project Agreement Buyout.


<PAGE>


Change in Control Put

Upon the  occurrence of a Change of Control,  each Holder will have the right to
require the Company to repurchase all or any part of such Holder's Securities at
a purchase  price in cash equal to 101% of the principal  amount  thereof,  plus
accrued interest to the date of repurchase in accordance with the procedures set
forth in the Indenture.  There is no assurance that upon a Change in Control the
Company will have sufficient funds to repurchase the Securities.

Distributions

Prior to  completion,  there  will be no  distributions  to the  Company  or its
shareholders.  After completion,  distributions may be made only from and to the
extent of monies on deposit in the  Distribution  Fund or Distribution  Suspense
Fund.  Distributions  are  subject to the prior  satisfaction  of the  following
conditions:

(a)  The amounts  contained in the Principal  Fund and the Interest Fund will be
     equal to or greater than the  aggregate  scheduled  principal  and interest
     payments next due on the Securities;

(b)  No Default or Event of Default under the Indenture  shall have occurred and
     be continuing;

(c)  The Debt Service Coverage Ratio for the preceding  12-month period is equal
     to or greater than 1.35 to 1 as certified by an officer of the Company;

(d)  The  projected  Debt  Service  Coverage  Ratio  of the  Securities  for the
     succeeding  12-month  period  is equal  to or  greater  than  1.35 to 1, as
     certified by an officer of the Company; and,

(e)  The Debt Service  Reserve  Fund has a balance  equal to or greater than the
     Debt Service Reserve Fund Required Balance.

Ranking and Security for the Securities

The  Securities  are  senior  debt  of the  Company  and are  secured  by (a) an
assignment  of all revenues  received by the Company from the Casecnan  Project;
(b) a  collateral  assignment  of all  material  contracts;  (c) a  lien  on any
accounts and funds on deposit under the  Depositary  Agreement;  (d) a pledge of
approximately  100% of the capital  stock of the Company,  subject to release in
certain  circumstances  relating to accessing  political  risk insurance for the
benefit of the  shareholders;  and (e) a lien on all other  material  assets and
property interests of the Company.  The Securities will rank pari passu with and
will share the  Collateral on a pro rata basis with certain other senior secured
debt,  if any (provided  that the Debt Service  Reserve Fund shall be collateral
solely for the obligations under the Securities).  The proceeds of any political
risk  insurance  covering  the  capital  investment  will  not  be  part  of the
collateral for the  Securities.  While under the Indenture the Company may incur
certain permitted debt senior to the Securities,  it has no present intention to
do so.
<PAGE>

Ratings

Moody's and Standard & Poor's have assigned the Securities  ratings of "Ba2" and
"BB+",  respectively.  There is no  assurance  that any such credit  rating will
remain in effect for any given  period of time or that such  rating  will not be
lowered, suspended or withdrawn entirely by the applicable rating agency, if, in
such rating agency's judgment, circumstances so warrant.

Nature of Recourse on the Securities

The Company's  obligations to make payments of principal,  premium,  if any, and
interest on the Securities are obligations  solely of the Company secured solely
by the  collateral.  Neither the  shareholders of the Company nor any Affiliate,
including MidAmerican, incorporator, officer, director or employee thereof or of
the Company  guaranteed the payment of, nor have any obligation  with respect to
payment of the  Securities,  except to the extent that affiliates of MidAmerican
who are  stockholders  of the Company have pledged  their  capital  stock in the
Company as security for the notes and bonds issued by the Company.  As a result,
payment of the Company's obligations depends upon the availability of sufficient
revenues from the Company's business after the payment of operating expenses.

Incurrence of Additional Debt

The Company  shall not incur any debt other than  "Permitted  Debt."  "Permitted
Debt" means:

(a)  The Securities;

(b)  After   completion,   debt  incurred  to  finance  the  making  of  capital
     improvements to the Casecnan Project  required to maintain  compliance with
     applicable law or anticipated  changes therein;  provided that no such debt
     may be incurred unless at the time of incurrence the  independent  engineer
     confirms as  reasonable  (i) a  certification  by the  Company  (containing
     customary   assumptions  and  qualifications)  that  the  proposed  capital
     improvements  are  reasonably  expected to enable the  Casecnan  Project to
     comply with  applicable  or  anticipated  legal  requirements  and (ii) the
     calculations  of the Company that  demonstrate,  after giving effect to the
     incurrence of such debt,  the minimum  project Debt Service  Coverage Ratio
     (x) for the next four  consecutive  fiscal  quarters,  commencing  with the
     quarter in which such debt is incurred, taken as one annual period, and (y)
     for each  subsequent  fiscal year through the final maturity date, will not
     be less than 1.3 to 1;

(c)  After   completion,   debt  incurred  to  finance  the  making  of  capital
     improvements  to the Casecnan  Project not required by  applicable  law, so
     long as after giving  effect to the  incurrence of such debt (i) no default
     or event of  default  has  occurred  and is  continuing,  and  (ii)(A)  the
     independent  engineer  confirms as reasonable  (I) a  certification  by the
     Company  (containing  customary  assumptions and  qualifications)  that the
     proposed capital improvements are technically feasible and prudent and (II)
     the  calculations of the Company that  demonstrate,  after giving effect to
     the incurrence of such debt, (x) the minimum project Debt Service  Coverage
     Ratio for the next four consecutive  fiscal  quarters,  commencing with the
     quarter in which such debt is incurred,  taken as one annual period, and in
     every  fiscal year  thereafter,  will not be less than 1.4 to 1 and (y) the
     average  projected Debt Service  Coverage  Ratio for all succeeding  fiscal
     years until the final  maturity date will not be less than 1.7 to 1, or (B)
     the  rating  agencies  confirm  that the  incurrence  of such debt will not
     result in a rating downgrade;
<PAGE>

(d)  After completion,  working capital debt in an aggregate amount  outstanding
     at any time not to exceed $5 million;

(e)  Debt  incurred in  connection  with  certain  permitted  interest  rate and
     currency hedging arrangements;

(f)  Subordinated debt from affiliates in an aggregate amount not to exceed $150
     million prior to completion and $100 million after completion,  which shall
     be used to finance  capital,  operating  or other costs with respect to the
     Project;

(g)  Debt incurred for purposes for which permitted liens may be incurred;

(h)  Debt   contemplated  to  be  incurred  pursuant  to  the  Casecnan  Project
     documents, including obligations in connection with any letter of credit in
     an aggregate amount outstanding at any time not to exceed $15 million;

(i)  Purchase  money  debt and  other  ordinary  course  trade  debt to  support
     operation and maintenance of the Casecnan  Project,  in an aggregate amount
     at any time not to exceed $35 million;

(j)  Permitted  refinancing  debt, if, as certified by an authorized  officer of
     the Company at the time of  incurrence,  (A)(i) after giving  effect to the
     incurrence of such debt, (x) the minimum  projected  Debt Service  Coverage
     Ratio for the next four  consecutive  fiscal quarters in which such debt is
     incurred,  taken as one annual period, and in every fiscal year thereafter,
     will not be less  than 1.5 to 1, and (y) for each  subsequent  fiscal  year
     through the final maturity date, the average project Debt Service  Coverage
     Ratio  will not be less  than 2.0 to 1, and  (ii) the  final  maturity  and
     average life of the debt incurred each exceed those of the debt  remaining,
     (B) each  principal  payment  equals that of each  corresponding  principal
     payment of the debt being replaced or (C) the rating agencies  confirm that
     the incurrence of such debt will not result in a rating downgrade; and,

(k)  Debt  incurred  by  the  Company  prior  to  completion  as  necessary  for
     financing, engineering,  construction,  completion, testing and start-up of
     the Casecnan  Project in  accordance  with an Approved  Completion  Plan in
     order to achieve completion  ("Pre-Completion  Additional Debt"),  provided
     that (i) the rating agencies  confirm that the incurrence of such debt will
     not result in a rating downgrade;  or (ii)(A) the independent  engineer has
     confirmed  (subject  to  customary   assumptions  and   qualifications)  as
     reasonable  the  technical  feasibility  of the  Approved  Completion  Plan

<PAGE>

     including a  certification  that  (subject  to  customary  assumptions  and
     qualifications)  the net proceeds of such Debt and other funds available to
     the Company (from Liquidated  Damages Proceeds or otherwise) are reasonably
     expected to be sufficient to fund the costs of reaching completion; and (B)
     the Company certifies at the time of incurrence (with customary assumptions
     and  qualifications)  that (x) the Approved  Completion Plan is technically
     feasible and prudent,  (y) after giving  effect to the  incurrence  of such
     debt, the minimum projected Debt Service Coverage Ratio for the four fiscal
     quarters  commencing with the quarter that commences  immediately after the
     projected date of commercial  operation of the Casecnan  Project,  taken as
     one annual period,  and in every fiscal year  thereafter,  will not be less
     than 1.3 to 1, and (z) after giving effect to incurrence of such debt,  the
     average  projected Debt Service Coverage Ratio for all succeeding  Calendar
     Years until the final maturity date will not be less than 1.5 to 1.

Principal Covenants

Principal covenants under the Indenture require the Company,  subject to certain
exceptions and  qualifications,  (a) not to incur (i) any debt except  Permitted
Debt or (ii) any lien upon any of its assets except  permitted liens; (b) not to
enter  into any  transaction  of merger  or  consolidation,  change  its form of
organization,  liquidate,  wind-up  or  dissolve  itself;  (c) not to enter into
non-arm's length  transactions or agreements with affiliates;  (d) not to engage
in any business other than as  contemplated  by the Indenture;  (e) not to enter
into certain change orders under the Turnkey Construction  Contract or amend the
Approved  Construction  Budget and Schedule (or an Approved Completion Plan), or
amend,  terminate or otherwise  modify any material Project Document to which it
is a party,  except as permitted under the Indenture;  (f) not to sell, lease or
transfer any property or assets  material to the Casecnan  Project except in the
ordinary course of business; (g) to construct the Casecnan Project in accordance
with the Approved Construction Budget and Schedule;  (h) to operate and maintain
the Casecnan  Project in accordance with the Approved  Operation and Maintenance
Budget;  (i) to maintain  insurance as required under the Indenture;  and (j) to
enter into an interest rate  agreement for the FRNs,  within 30 days of Closing,
at a LIBOR cap of up to 7.5%.

Insurance
---------

The Company  maintains  insurance with respect to the Casecnan Project of a type
and in such amounts as are  generally  carried by  companies  engaged in similar
businesses  and owning similar  projects that are financed in a similar  manner.
These coverages will include casualty insurance,  including flood and earthquake
coverage,   business  interruption  insurance,   primary  and  excess  liability
insurance, automobile insurance and workers compensation insurance. However, the
proceeds  of such  insurance  may not be  adequate  to cover  reduced  revenues,
increased  expenses  or  other  liabilities   arising  from  the  occurrence  of
catastrophic  events.  Moreover,  there can be no assurance  that such insurance
coverage  will be available in the future at  commercially  reasonable  rates or
that the amounts for which the  Company  will be insured  will cover all losses.
Nevertheless,  the Company will not reduce or cancel  coverages if the Insurance
Consultant  determines it is not  reasonable to do so and insurance is available
on commercially reasonable terms.
<PAGE>

Regulatory Matters
------------------

The  Company is  subject  to a number of  Philippine  statutory  and  regulatory
standards  and required and desirable  approvals,  including  those  relating to
energy and  environmental  laws.  Many  permits  and  regulatory  approvals  are
required  and  desirable  for the  construction  and  operation  of the Casecnan
Project.  A number of these permits and  regulatory  approvals have not yet been
obtained.  Some of the permits and regulatory  approvals that have been obtained
contain  conditions,  and a number of the permits and approvals not yet obtained
may contain  conditions when they are issued.  Delay in receipt of or failure to
obtain these  permits or approvals or to satisfy any of these  conditions  could
delay  completion  of the  construction  of the Casecnan  Project,  restrict the
operation of the Casecnan  Project,  or result in additional costs or taxes. The
adoption of new laws, policies or regulations,  or changes in the interpretation
or  application  of existing  laws,  policies and  regulations,  that modify the
present  regulatory  environment  could  have a material  adverse  effect on the
Company's ability to construct or operate the Casecnan Project and could trigger
the Company's  right to sell the Casecnan  Project to NIA.  Upon such sale,  the
Securities will be subject to mandatory redemption.

Employees
---------

At December 31, 2000, the Company had 27 employees who are currently  overseeing
the construction and startup activities.  After completion of construction,  the
Casecnan Project is expected to employ  approximately  25 people,  consisting of
operations,  maintenance,  logistics,  compliance, and engineering personnel. At
the  powerhouse  control room,  personnel  will monitor,  direct and control the
operations and maintenance of the whole Casecnan Project.  The control room will
be  staffed  24 hours per day and will be the  contact  point  for the  Casecnan
Project's customers and others. At the diversion  structures,  personnel will be
responsible  to ensure that the trash racks at the tunnel intakes are kept clean
and  maintained  and that excessive  sediment  build-up  behind the structure is
prevented.


<PAGE>


Item 2.  Properties

CE Casecnan does not separately own or lease office space but has arranged for a
separate suite at the offices of MidAmerican's affiliate in Manila.

Item 3.  Legal Proceedings

On February 12, 2001, the Contractor filed a Request for Arbitration pursuant to
the Replacement  Contract,  seeking up to 153 days of schedule relief related to
various  alleged  force  majeure  events,  including  the  vertical  surge shaft
collapse.  On March 20,  2001,  the  Contractor  supplemented  its  Request  for
Arbitration,  seeking up to US $3,853,328 as compensation in connection with the
vertical surge shaft replacement work. CE Casecnan believes that the arbitration
claims are without  merit and intends to defend them  vigorously.  In accordance
with the Replacement Contract, the arbitration will be conducted pursuant to the
rules of the International Chamber of Commerce. The parties have agreed that the
venue of the arbitration will be London, England.

Item 4.  Submission of Matters to a Vote of Security Holders.

Not Applicable.



<PAGE>


PART II

Item 5.  Market for Company's Equity and Related Stockholder Matters.

Not Applicable.

Item 6.  Selected Financial Data

Amounts in Thousands Except Per Share Amounts
<TABLE>
<CAPTION>
====================================== ============================================================================
                                                                 Year ended December 31,
-------------------------------------- ------------- ------------- ---------------- --------------- ---------------
                                           2000          1999          1998              1997            1996
-------------------------------------- ------------- ------------- ---------------- --------------- ---------------
<S>                                        <C>         <C>             <C>              <C>             <C>
Total revenue                              $   7,605   $ 11,656        $ 19,533         $ 19,786        $ 25,611
Net income (loss) to common
   stockholders                                4,857        699             381          (11,264)        (13,211)
Net income (loss) per share                     6.33       0.91            0.50           (14.68)         (17.22)
Total assets                                 482,373    522,398         553,433          491,912         490,162
Total liabilities                            378,275    423,157         454,891          393,751         380,737
Notes and bonds payable                      352,750    371,500         371,500          371,500         371,500
Stockholders' equity                         104,098     99,241          98,542           98,161         109,425
======================================  ============= ============= ================ =============== ===============
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations:
---------------------

The  Company is in the  construction  stage and has not yet  started  commercial
operations as of December 31, 2000. The quarter and year ended December 31, 2000
revenue of $1.2  million  and $7.6  million  respectively,  consists of interest
income on cash and investment balances.  The quarter and year ended December 31,
2000 interest  expense of $11.4 million and $46.1  million,  respectively,  less
amounts  capitalized  of $12.5  million  and $47.5  million,  respectively,  and
amortization of bond issue costs of $1.2 million and $2.3 million, respectively,
are related to the notes and bonds  payable  issued by the Company in the fourth
quarter of 1995.

Liquidity and Capital Resources:
-------------------------------

In November 1995, the Company closed the financing and commenced construction of
the Casecnan Project, a combined  irrigation and 150 net MW hydroelectric  power
generation  project  located in the  central  part of the island of Luzon in the
Republic of the Philippines.


<PAGE>


CE  Casecnan,  which  is  expected  to be  indirectly  owned  at  least  70%  by
MidAmerican, is constructing the Casecnan Project under the terms of the Project
Agreement  between CE  Casecnan  and the NIA.  Under the Project  Agreement,  CE
Casecnan  will  develop,  finance and  construct  the Casecnan  Project over the
construction  period, and thereafter own and operate the Casecnan Project for 20
years  (the  "Cooperation  Period").  During  the  Cooperation  Period,  NIA  is
obligated  to accept  all  deliveries  of water and  energy,  and so long as the
Casecnan Project is physically capable of operating and delivering in accordance
with agreed levels set forth in the Project Agreement,  NIA will pay CE Casecnan
a fixed fee for the  delivery  of a minimum  volume of water and a fixed fee for
the delivery of a minimum  amount of  electricity.  In addition,  NIA will pay a
fixed fee for all electricity  delivered in excess of a threshold amount up to a
specified  amount.  NIA  will  sell the  electricity  it  purchases  to the NPC,
although NIA's  obligations  to CE Casecnan under the Project  Agreement are not
dependent  on the  purchase of the  electricity  from NIA by NPC. All fees to be
paid by NIA to CE Casecnan are payable in U.S. dollars.  The fixed fees paid for
the delivery of water and energy,  regardless  of the amount of  electricity  or
water  actually  delivered,  are  expected  to provide  approximately  70% of CE
Casecnan's revenues.  At the end of the Cooperation Period, the Casecnan Project
will be transferred to NIA for no additional consideration on an "as is" basis.

The Casecnan Project was initially being constructed  pursuant to a fixed-price,
date-certain,  turnkey  construction  contract (the "Hanbo Contract") on a joint
and several  basis by Hanbo  Corporation  ("Hanbo")  and Hanbo  Engineering  and
Construction Co., Ltd. ("HECC"), both of which are South Korean corporations. As
of May 7, 1997,  the Company  terminated  the Hanbo  Contract due to defaults by
Hanbo and HECC including the insolvency of each such company.  On the same date,
the Company entered into a new fixed-price,  date certain,  turnkey engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan Project (the  "Replacement  Contract").  The work under the Replacement
Contract is being conducted by a consortium  consisting of Cooperativa  Muratori
Cementisti  CMC di Ravenna and Impresa  Pizzarotti & C. Spa.,  working  together
with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,  Black &  Veatch  and  Colenco  Power
Engineering Ltd. (collectively, the "Contractor").

On  November  20,  1999,  the  Replacement  Contract  was  amended to extend the
Guaranteed  Substantial  Completion  Date for the Casecnan  Project to March 31,
2001. This amendment was approved by the lender's independent engineer under the
Casecnan Indenture. In January 2001, the Company received a new working schedule
from  the  Contractor  that  showed  a  completion  date  of  August  31,  2001.
Accordingly,  the Casecnan Project is now expected to become  operational by the
third quarter of 2001.  The delay in completion is  attributable  in part to the
collapse in December 2000 of the Project's  partially  completed  vertical surge
shaft and the need to drill a replacement surge shaft.

The receipt of the working  schedule does not change the Guaranteed  Substantial
Completion  Date under the  Replacement  Contract,  and the  Contractor is still
contractually  obligated  either to complete the Project by March 31, 2001 or to
pay delay liquidated  damages.  As a result of receipt of the working  schedule,
however,  the  Company has sought and  obtained  from the  lender's  independent
engineer  approval  for a  revised  construction  schedule  under  the  Casecnan
Indenture.  In connection with the revised schedule, the ultimate parent company
of CE Casecnan agreed to make available up to $11.6 million of additional  funds
under certain conditions pursuant to a Shareholder Support Letter dated February
8, 2001 (the  "Shareholder  Support Letter") to cover additional costs resulting
from the  Contractor's  schedule  delay.  CE Casecnan  intends to  exercise  all
contractual rights and remedies,  including collection of liquidated damages, in
connection with such delay.
<PAGE>

CE Casecnan  financed a portion of the cost of the Casecnan  Project through the
issuance of $125 million of its 11.45%  Senior  Secured  Series A Notes due 2005
and $171.5  million of its 11.95% Senior Secured Series B Bonds due 2010 and $75
million of its Secured  Floating  Rate Notes due 2002,  pursuant to an indenture
dated November 27, 1995, as amended to date (the "Casecnan Indenture").

The  securities  are senior debt of the Company and are secured by a  collateral
assignment of all revenues received from the Project, a collateral assignment of
all material  contracts,  a lien on any  accounts  and funds on deposit  under a
Deposit and Disbursement Agreement, a pledge of 100% of the capital stock of the
Company and a lien on all other  material  assets and property.  The  securities
rank pari  passu  with and will  share the  collateral  on a pro rata basis with
other senior secured debt, if any.

The securities are subject to certain optional and mandatory  redemption schemes
as provided for in the Casecnan  Indenture.  The debt covenants  contain certain
restrictions as to incurrence of additional indebtedness; merger, consolidation,
dissolution, or any significant change in corporate structure;  non-arm's length
transactions  or  agreements  with  affiliates;  material  change in the Turnkey
Construction  Contract;  and sale, lease, or transfer of properties  material to
the Project, among others.

Forward-looking Statements

Certain information included in this report contains forward-looking  statements
made pursuant to the Private  Securities  Litigation Reform Act of 1995 ("Reform
Act"). Such statements are based on current expectations and involve a number of
known and unknown risks and  uncertainties  that could cause the actual  results
and  performance of the Company to differ  materially  from any expected  future
results or performance, expressed or implied, by the forward-looking statements.
In connection with the safe harbor provisions of the Reform Act, the Company has
identified   important  factors  that  could  cause  actual  results  to  differ
materially  from  such  expectations,  including  development  and  construction
uncertainty,  operating  uncertainty,  uncertainties  relating to doing business
outside of the United States,  uncertainties  relating to international economic
and political conditions and uncertainties  regarding the impact of regulations,
changes in government policy, industry deregulation and competition. The Company
assumes  no  responsibility  to  update  forward-looking  information  contained
herein.
<PAGE>

Item 7A.  Qualitative and Quantitative Disclosures About Market Risk

The  following  discussion  of the  Company's  exposure to various  market risks
contains  "forward-looking  statements"  that involve  risks and  uncertainties.
These  projected  results  have  been  prepared  utilizing  certain  assumptions
considered reasonable in the circumstances and in light of information currently
available to the Company.  Actual  results  could differ  materially  from those
projected in the forward-looking information.

Interest Rate Risk

At  December  31,  2000,  the Company had  fixed-rate  long-term  debt of $296.5
million in  principal  amount and having a fair value of $271.0  million.  These
instruments  are  fixed-rate and therefore do not expose the Company to the risk
of earnings  loss due to changes in market  interest  rates.  However,  the fair
value of these  instruments  would  decrease by  approximately  $5.3  million if
interest  rates were to increase by 10% from their  levels at December 31, 2000.
In general,  such a decrease in fair value would impact  earnings and cash flows
only if the  Company  were to  reacquire  all or a portion of these  instruments
prior to their maturity.

At December 31, 2000, the Company had floating-rate obligations of $56.3 million
that expose the Company to the risk of increased  interest  expense in the event
of  increases  in  short-term  interest  rates.  If the  floating  rates were to
increase  by 10% from  December  31, 2000  levels,  the  Company's  consolidated
interest  expense would  increase by  approximately  $49,000 each month in which
such increase continued based upon December 31, 2000 principal balances.


<PAGE>


Item 8.  Financial Statements and Supplementary Data

Report of Independent Public Accountants....................................23

Report of Independent Public Accountants....................................24

Balance Sheets as of December 31, 2000 and 1999.............................25

Statements of Operations  for the Years Ended  December 31, 2000,  1999 and 1998
   and for the  Period  from  the  Date of  Inception  (September  21,  1994) to
   December 31, 2000........................................................26

Statements of  Changes in  Stockholders'  Equity for the Period  from  Inception
   (September 21, 1994) to December 31, 2000................................27

Statements of Cash Flows for the Years Ended  December 31, 2000,  1999, and 1998
   and for the  Period  from  the  Date of  Inception  (September  21,  1994) to
   December 31, 2000........................................................28

Notes to Financial Statements...............................................29



<PAGE>


Report of Independent Public Accountants

To the Board of  Directors  and  Stockholders  of CE  Casecnan  Water and Energy
Company, Inc.

We have audited the  accompanying  balance sheet of CE Casecnan Water and Energy
Company,  Inc. (a company in the development stage) as of December 31, 2000, and
the related statements of income, of changes in stockholders' equity and of cash
flows for the year then ended. These financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial  statements based on our audit. The financial statements for the
years  ended  December  31,  1999 and 1998  were  audited  by other  independent
accountants,  whose  report  dated  January 25, 2000  expressed  an  unqualified
opinion on those statements.

We conducted our audit in accordance with generally  accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of CE Casecnan Water and Energy
Company,  Inc. as of December 31, 2000, and the results of its  operations,  and
changes  in  stockholders'  equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles in the United States of
America.

JOAQUIN CUNANAN & CO.
A Pricewaterhousecoopers member firm



Makati City, Philippines
January 29, 2001, except Note 9 which is as of
February 12, 2001 and March 20, 2001









<PAGE>


Report of Independent Public Accountants

The Stockholders and the Board of Directors

CE Casecnan Water and Energy Company, Inc.

We have audited the accompanying  balance sheets of CE Casecnan Water and Energy
Company,  Inc. (a company in the development stage) as of December 31, 1999, and
the related statements of operations,  changes in stockholders'  equity and cash
flows for each of the two years in the period  ended  December  31, 1999 and for
the period from the date  inception  (September  21, 1994) to December 31, 1999.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of CE Casecnan Water and Energy
Company, Inc. as of December 31, 1999 and the results of its operations, changes
in  stockholders'  equity,  and its cash  flows for each of the two years in the
period  ended  December  31, 1999 and for the period from the date of  inception
(September  21,  1994)  to  December  31,  1999 in  conformity  with  accounting
principles generally accepted in the United States of America.

SyCip Gorres Velayo & Co
An Arthur Andersen Member Firm

January 25, 2000


<PAGE>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                      (A company in the development stage)

                                  BALANCE SHEET

                                DECEMBER 31, 2000

               (With comparative figures as of December 31, 1999)
   (Amounts in thousands U.S. Dollars, except number of shares and par value)
<TABLE>
<CAPTION>
================================================================================= ==================== =====================
                                                                                                 2000                  1999
----------------------------------------------------------------------------------------------------------------------------

A  S  S  E  T  S

<S>                                                                                         <C>                  <C>
Cash                                                                                        $     703            $   2,318
Restricted Cash and Short-term Investments (Note 3)                                                 1               42,064
Accrued Interest Receivable                                                                       573                1,750
Restricted Investments (Note 3)                                                                47,922              122,175
Bond Issue Costs, net                                                                           8,315                9,010
Development and Construction Costs (Notes 1, 3 and 7)                                         419,163              337,983
Deferred Income Tax Asset                                                                       5,696                7,098
--------------------------------------------------------------------------------- -------------------- ---------------------
Total Assets                                                                                $ 482,373            $ 522,398
================================================================================= ==================== =====================

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts Payable and Accrued Expenses                                                       $   6,525            $  41,633
Payable to Affiliates                                                                          19,000               10,024
Notes and Bonds Payable                                                                       352,750              371,500
--------------------------------------------------------------------------------- -------------------- ---------------------
Total liabilities                                                                             378,275              423,157

Commitments and contingencies (Notes 7 and 9)

Stockholders' Equity
     Capital stock (Notes 3 and 6)

         Authorized - 2,148,000 shares at one Philippine peso ($0.038) par
               value per share                                                                     29                   29
         Issued - 767,162 shares                                                              123,807              123,807
     Additional paid-in capital (Note 3)                                                      (19,738)             (24,595)
     Accumulated deficit
--------------------------------------------------------------------------------- --------------------- --------------------
Total stockholders' equity                                                                    104,098                99,241
--------------------------------------------------------------------------------- --------------------- --------------------
Total liabilities and stockholders' equity                                                  $ 482,373            $  522,398
================================================================================= ===================== ====================
</TABLE>


  (The accompanying notes are an integral part of these financial statements.)


<PAGE>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                      (A company in the development stage)

                               STATEMENT OF INCOME

                         FOR THE YEAR ENDED DECEMBER 31,
                  2000 (With comparative figures for the years
                        ended December 31, 1999 and 1998

       and for the period from the date of inception (September 21, 1994)
                              to December 31, 2000)
     (Amounts in thousands U.S. Dollars, except net income (loss) per share
                and average number of common shares outstanding)
<TABLE>
<CAPTION>
==========================================================================================================================
                                                                                                       From the date
                                                                                                        of inception
                                                                                                    (September 21, 1994)
                                                          2000          1999           1998         to December 31, 2000
--------------------------------------------------------------------------------------------------------------------------
 OTHER INCOME

<S>                                                 <C>             <C>           <C>                    <C>
      Interest income                               $   7,605       $  11,656     $  19,533              $    86,684
 COST AND EXPENSES
      Interest                                         46,079          45,005        45,028                  232,119
      Amortization of bond issue costs                  2,270           1,324         1,179                    6,850
      Capitalized interest and bond issue costs       (47,454)        (36,501)      (27,161)                (127,302)
      Miscellaneous                                       451             -              -                       451
--------------------------------------------------------------------------------------------------------------------------
                                                        1,346           9,828        19,046                  112,118
--------------------------------------------------------------------------------------------------------------------------
 INCOME (LOSS) BEFORE
    INCOME TAX                                          6,259           1,828           487                  (25,434)
 BENEFIT FROM (PROVISION FOR)
    DEFERRED INCOME TAX (Note 4)                       (1,402)         (1,129)         (106)                   5,696
--------------------------------------------------------------------------------------------------------------------------
 NET INCOME (LOSS)                                  $   4,857       $     699     $     381              $   (19,738)
==========================================================================================================================

 Net income (loss) per share                        $    6.33       $    0.91     $     .50              $    (27.15)
 ==========================================================================================================================
 Average number of common shares Outstanding          767,162         767,162       767,162                  727,098
==========================================================================================================================
</TABLE>

  (The accompanying notes are an integral part of these financial statements.)


<PAGE>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                      (A company in the development stage)

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                         FOR THE YEAR ENDED DECEMBER 31,
                  2000 (With comparative figures for the years
                        ended December 31, 1999 and 1998

       and for the period from the date of inception (September 21, 1994)
                              to December 31, 2000)
          (Amounts in thousands U.S. Dollars, except number of shares)
<TABLE>
<CAPTION>
=========================================================================================================================
                                            Outstanding
                                               Common        Common       Additional       Accumulated
                                               Shares         Stock     paid-in capital      Deficit            Total
-------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>       <C>              <C>              <C>           <C>
 Balance, September 21, 1994                          -   $      -         $       -        $       -     $           -
 Issuance of common shares                      537,014         20               530                -               550
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1994                     537,014         20               530                -               550
 Additional issuance of common shares
   (Note 6)                                     230,148          9                 -                -                 9
 Additional paid-in capital (Note 3)                  -          -           123,277                -           123,277
 Net loss                                             -          -                 -           (1,200)           (1,200)
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1995                     767,162         29           123,807           (1,200)          122,636
 Net loss                                             -          -                 -          (13,211)          (13,211)
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1996                     767,162         29           123,807          (14,411)          109,425
 Net loss                                             -          -                 -          (11,264)          (11,264)
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1997                     767,162         29           123,807          (25,675)           98,161
 Net income                                           -          -                 -              381               381
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1998                     767,162         29           123,807          (25,294)           98,542
 Net income                                           -          -                 -              699               699
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1999                     767,162         29           123,807          (24,595)           99,241
 Net income                                           -          -                 -            4,857             4,857
-------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 2000                     767,162   $     29         $ 123,807        $ (19,738)    $     104,098
=========================================================================================================================
</TABLE>


  (The accompanying notes are an integral part of these financial statements.)


<PAGE>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                      (A company in the development stage)

                             STATEMENT OF CASH FLOWS

                      FOR THE YEAR ENDED DECEMBER 31, 2000
                  (With comparative figures for the years ended
             December 31, 1999 and 1998 and for the period from the
          date of inception (September 21, 1994) to December 31, 2000)
                       (Amounts in thousands U.S. Dollars)
<TABLE>
<CAPTION>

=============================================================================================================================
                                                                                                         From the date
                                                                                                          of inception

                                                                                                      (September 21, 1994)
                                                            2000           1999           1998        to December 31, 2000
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING
   ACTIVITIES

<S>                                                     <C>              <C>              <C>                <C>
Net income (loss)                                       $    4,857       $     699        $     381          $   (19,738)
Adjustments to reconcile net income (loss) to
    net cash provided by (used in) operating activities:
        Amortization of bond issue costs                     2,270           1,324            1,179                6,850
        Provision for (benefit from) deferred income tax     1,402           1,129              106               (5,696)
Changes in assets and liabilities
     Decrease (increase) in accrued  interest receivable     1,177           1,264              (52)                (573)
     Increase in accounts payable and accrued expenses           -               -            2,195                8,650
-----------------------------------------------------------------------------------------------------------------------------
Net cash provided (used in) operating activities             9,706           4,416            3,809              (10,507)
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to development and construction costs            (82,755)        (76,420)        (103,297)            (420,738)
Decrease (increase) in restricted:
       Cash and short-term investments                      42,063         103,894           37,520                   (1)
       Investments                                          74,253             166            4,343              (47,922)
Increase (decrease) in accounts payable and accrued
   expenses related to development and construction costs  (35,108)        (41,002)          61,248               (2,125)
-----------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                       (1,547)        (13,362)            (186)            (470,786)
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in advances from affiliates              8,976           9,268           (2,303)              19,000
 Payment of bond issue costs                                     -               -                -              (13,590)
Proceeds from(repayment of):
     Capital stock                                               -               -                -              123,836
     Notes and bonds payable                               (18,750)              -                -              352,750
-----------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities         (9,774)          9,268           (2,303)             481,996
-----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                             (1,615)            322            1,320                  703
CASH AT BEGINNING OF PERIOD                                  2,318           1,996              676                    -
-----------------------------------------------------------------------------------------------------------------------------
CASH AT END OF PERIOD                                   $      703       $   2,318        $   1,996          $       703
=============================================================================================================================
SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION
       Interest paid during the period (net of
           Amount capitalized)                          $   (1,259)      $   8,670        $  18,477          $   99,250
=============================================================================================================================
</TABLE>

  (The accompanying notes are an integral part of these financial statements.)


<PAGE>


CE CASECNAN WATER AND ENERGY COMPANY, INC.
(A company in the development stage)

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
(With  comparative  figures for the years ended  December  31, 1999 and 1998 and
       for the  period  from  the  date of  inception  (September  21,  1994) to
       December 31, 2000)
(amounts in U.S. Dollars)

Note 1 - Organization
---------------------

CE Casecnan Water and Energy Company, Inc. (the Company) was registered with the
Philippine Securities and Exchange Commission on September 21, 1994 primarily to
design,  develop,  construct,  erect,  assemble,  commission,  operate and own a
hydroelectric  power  plant  and the  related  facilities  for  conversion  into
electricity  of  water  provided  by and  under  contract  with  the  Philippine
Government or any government-owned or controlled corporation.

The  Company  has  a  contract  with  the  Philippine  Government,  through  the
Philippine   National  Irrigation   Administration   (NIA)  (a  government-owned
controlled corporation), for the development and construction of a hydroelectric
power plant and related facilities under a build-own-operate-transfer  agreement
(Project  Agreement),  covering a 20-year  cooperation period with "take-or-pay"
obligations  for water and  electricity.  At the end of the 20-year  cooperation
period,  the  combined  irrigation  and 150  net  megawatt  hydroelectric  power
generation  project (the Casecnan Project) will be transferred to the Philippine
Government  at no cost.  The  Philippine  Government  also signed a  Performance
Undertaking which,  among others,  affirms and guarantees the obligations of NIA
under the contract.  Construction of the Casecnan Project  commenced in 1995 and
the related  costs are  included  under  "Development  and  construction  costs"
account in the balance sheet.

The  Company  is in the  development  stage and has not yet  started  commercial
operations as of December 31, 2000.

After the completion of the aforementioned  project,  the Company is expected to
be at least 70% owned by  MidAmerican  Energy  Holdings  Company  (MidAmerican),
subject to upward  adjustment  based upon the actual  economics  of the Casecnan
Project at commencement of commercial operations.

The Company is registered  with the BOI of the  Philippines as a new operator of
hydroelectric power plant with pioneer status under the Omnibus Investments Code
of 1987 (Executive


<PAGE>


Order No. 226). Under the terms of its registration,  the Company is entitled to
certain  incentives  which  include an income tax  holiday  for a minimum of six
years from the start of commercial operations;  tax and duty-free importation of
capital  equipment;  tax credits on domestic capital  equipment;  and, exemption
from customs duties and national  internal revenue taxes for the importation and
unrestricted use of the consigned  equipment for the development,  construction,
start-up,  testing and  operation  of the power  plant.  The  registration  also
requires,  among others, the maintenance of a debt-to-equity ratio not exceeding
75:25 upon commencement of commercial operations.

Note 2 - Summary of Significant Accounting Policies
---------------------------------------------------

The more  significant  accounting  policies and practices of the Company are set
forth  to  facilitate  the  understanding  of data  presented  in the  financial
instruments:

Restricted  short-term  investments  other than  restricted  cash are  primarily
commercial papers and money market  securities.  Restricted cash include similar
securities and mortgage-backed securities.

Since  the  Company  has the  positive  intent  and  ability  to hold all of its
investments  to maturity,  these are classified as held to maturity and recorded
at amortized  cost.  The carrying  amount of investments as of December 31, 2000
approximates  their  fair  value,  which is based on  quoted  market  prices  as
provided by the financial institution holding the investments.

Bond issue costs  consist of costs  incurred in the  issuance of senior  secured
notes and bonds  and are  being  amortized  over the term of the notes and bonds
using the effective interest rate method.

Development and construction costs of the hydroelectric  power plant and related
facilities are  capitalized and will be amortized over a period of 20 years from
the start of its commercial operations.

Borrowing costs (interest and other financial  charges) are being capitalized as
part of the cost of capital  projects.  Interest is capitalized up to the extent
of construction and development costs incurred.

Transactions in foreign currencies  (Philippine pesos) are recorded based on the
prevailing  rates  of  exchange  at  transaction  dates.   Monetary  assets  and
liabilities  denominated  in foreign  currencies  are restated in the  financial
statements at the exchange rates  prevailing at the balance sheet date.  Gain or
losses  arising  from  the  restatement  are  credited  or  charged  to  current
operations.


<PAGE>


Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences  attributable to differences  between the financial reporting bases
of assets and liabilities  and their related tax bases.  Deferred tax assets and
liabilities  are measured using the tax rate expected to apply to taxable income
in the years in which those  temporary  differences are expected to be recovered
or settled.  A valuation  allowance is provided for deferred tax assets if it is
more likely than not that a tax benefit will not be realized.

Net income  (loss) per share is based on the weighted  average  number of common
shares outstanding during the period.

Impairment  of  long-lived  assets are  reviewed  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  An impairment  loss would be recognized  whenever  evidence exists
that the carrying value is not recoverable.

Use of estimates.  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Note 3 - Notes and Bonds Payable
--------------------------------

On November 27, 1995, the Company issued $371.5 million worth of notes and bonds
to finance the  construction  of the Casecnan  Project.  These  consist of $75.0
million  Senior Secured  Floating Rate Notes (FRNs) due in 2002;  $125.0 million
Senior  Secured  Series A Notes  (Series A Notes) with interest at 11.45% due in
2005;  and $171.5  million  Senior  Secured Series B Bonds (Series B Bonds) with
interest at 11.95% due 2010. For the year ended December 31, 2000, the notes and
bonds have effective  interest rates of 12.98% and 13.83% for the Series A Notes
and Series B Bonds, respectively, inclusive of bond issue cost amortization. The
effective  interest rate for the FRNs  fluctuated  between  10.52% and 11.35% in
2000 and was 11.35% at December 31, 2000.  Quarterly  interest  payments for the
FRNs  commenced on February  15, 1996,  and  semi-annual  interest  payments for
Series A Notes and Series B Bonds commenced on May 15, 1996.


<PAGE>


Semi-annual  installments for principal  payments for the FRNs have commenced on
November 15, 2000 amounting to $18.75 million and will commence on May 15, 2003
and May 15,  2002 for the Series A Notes and Series B Bonds,  respectively.  The
repayment schedule is as follows (in thousands):
<TABLE>
<CAPTION>

======================== ====================== ====================== ====================== =====================
                                   FRNs              Series A notes         Series B bonds              Total
------------------------ ---------------------- ---------------------- ---------------------- ---------------------
<S>                              <C>                   <C>                    <C>                    <C>
2001                             $29,625               $       -              $      -               $  29,625
2002                              26,625                       -                 8,575                  35,200
2003                                   -                  33,750                 7,718                  41,468
2004                                   -                  42,500                 6,860                  49,360
2005                                   -                  48,750                 6,002                  54,752
2006                                   -                       -                36,015                  36,015
2007                                   -                       -                37,730                  37,730
2008                                   -                       -                37,730                  37,730
2009                                   -                       -                13,720                  13,720
2010                                   -                       -                17,150                  17,150
------------------------ ---------------------- ---------------------- ---------------------- ---------------------
                                 $56,250                $125,000              $171,500                $352,750
======================== ====================== ====================== ====================== =====================
</TABLE>

The  securities  are senior debt of the Company and are secured by an assignment
of all revenues  that will be received from the Casecnan  Project,  a collateral
assignment  of all  material  contracts,  a lien on any  accounts  and  funds on
deposit  under a Deposit  and  Disbursement  Agreement,  a pledge of 100% of the
capital  stock  of the  Company  and a lien on all  other  material  assets  and
property interests of the Company.  The securities rank pari passu with and will
share the collateral on a pro rata basis with other senior secured debt, if any.
The securities are subject to certain optional and mandatory  redemption schemes
as provided for in the Trust Indenture.

The debt covenants  contain certain  restrictions as to incurrence of additional
indebtedness;  merger, consolidation,  dissolution, or any significant change in
corporate   structure;   non-arm's   length   transactions  or  agreements  with
affiliates;  material change in the Turnkey Construction  Contract (see Note 7);
sale, lease, or transfer of properties  material to the Casecnan Project,  among
others.

In connection with the foregoing secured indebtedness,  the Company, on November
27, 1995, entered into a Deposit and Disbursement  Agreement with Chemical Trust
Company of California  (Chemical  Trust) and Kiewit (a predecessor  shareholder)
whereby  Chemical  Trust  acts as a  depositary  and a  collateral  agent.  As a
depositary agent, it will hold monies, instruments and securities pledged by the
Company  to the  collateral  agent.  The  terms of this  agreement  require  the
establishment  of several funds which include a Capital  Contribution  Fund. The
Company's   stockholders   deposited  an  aggregate   capital   contribution  of
approximately  US$123.3  million to the fund which will be strictly used to fund
the  construction  of the Casecnan  Project when the proceeds  from the Series A
Notes and  Series B Bonds  have  been  fully  utilized.  The  contributions  are
included in the "Additional paid-in capital" account in the balance sheet.
<PAGE>

As of  December  31,  2000,  MidAmerican  held $6.3  million of the  outstanding
Casecnan  FRNs.  The  purchase of the FRNs by  MidAmerican  does not release the
Company of its obligations.

Interest  capitalized as part of development and construction  costs amounted to
$47.5 million and $36.5 million in 2000 and 1999, respectively.

Note 4 - Deferred income tax asset
----------------------------------

The Company's deferred tax asset amounting to $5.7 million and $7.1 million (net
of valuation allowance of $2.4 million and $3.0 million) as of December 31, 2000
and 1999, respectively,  consists mainly of the difference between the financial
reporting basis and the tax reporting  basis for  development  and  construction
costs.

Effective  January  1998,  the  Philippine  statutory  income  tax rate has been
changed from 35% to 34% in 1998,  further  reduced to 33% in 1999, and to 32% in
2000 and onwards.

Note 5 - Related party transactions
-----------------------------------

The Company has transactions with its affiliates which consist primarily of cash
advances for capital  requirements  related to the  construction of the Casecnan
Project.

Note 6 - Capital stock
----------------------

On October 26, 1995, the Company  issued 230,148 shares to the current  minority
stockholders out of the unsubscribed portion of the Company's authorized capital
stock.

The minority  stockholders  initially formed a venture to pursue the opportunity
of developing a water and energy project in the Casecnan  Basin.  After securing
preliminary indications of interest from the Philippine Government, the minority
stockholders  sought out the other  shareholders to form a new entity capable of
financing and building the Casecnan  Project.  In consideration of their role in
initiating the Casecnan  Project,  delivering the opportunity to the Company and
performing  development  assistance,   the  minority  stockholders  retained  an
ownership interest in the Company.

Note 7 - Commitments and Contingencies
--------------------------------------

In November 1995, the Company closed the financing and commenced construction of
the Casecnan  Project,  a combined  irrigation  and 150 MW  hydroelectric  power
generation  project  located in the  central  part of the island of Luzon in the
Republic of the Philippines.
<PAGE>

The Casecnan Project was initially being constructed  pursuant to a fixed-price,
date-certain,  turnkey  construction  contract (the "Hanbo Contract") on a joint
and several  basis by Hanbo  Corporation  ("Hanbo")  and Hanbo  Engineering  and
Construction Co., Ltd. ("HECC"), both of which are South Korean corporations. As
of May 7, 1997,  the Company  terminated  the Hanbo  Contract due to defaults by
Hanbo and HECC including the insolvency of each such company.  On the same date,
the Company entered into a new fixed-price,  date certain,  turnkey engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan Project (the  "Replacement  Contract").  The work under the Replacement
Contract is being conducted by a consortium  consisting of Cooperativa  Muratori
Cementisti  CMC di Ravenna and Impresa  Pizzarotti & C. Spa.,  working  together
with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,  Black &  Veatch  and  Colenco  Power
Engineering Ltd. (collectively, the "Contractor").

After a series of litigations between the contracting parties in connection with
the  termination of the Hanbo Contract,  the Company  received $90 million as an
out of court  settlement.  The amount received was shown as accounts payable and
accrued  expenses in the balance sheet and was being  released  periodically  to
offset costs which were incurred over the remainder of the construction  period.
The amount of settlement  that was offset against  construction  costs for 2000,
1999 and 1998 were $30 million, $44 million and $16 million, respectively.

On  November  20,  1999,  the  Replacement  Contract  was  amended to extend the
Guaranteed  Substantial  Completion  Date for the Casecnan  Project to March 31,
2001. This amendment was approved by the lender's independent engineer under the
Casecnan Indenture. In January 2001, the Company received a new working schedule
from  the  Contractor  that  showed  a  completion  date  of  August  31,  2001.
Accordingly,  the Casecnan Project is now expected to become  operational by the
third quarter of 2001.  The delay in completion is  attributable  in part to the
collapse in December 2000 of the Project's  partially  completed  vertical surge
shaft and the need to drill a replacement surge shaft.

The receipt of the working  schedule does not change the Guaranteed  Substantial
Completion  Date under the  Replacement  Contract,  and the  Contractor is still
contractually  obligated  either to complete the Project by March 31, 2001 or to
pay delay liquidated  damages.  As a result of receipt of the working  schedule,
however,  the  Company has sought and  obtained  from the  lender's  independent
engineer  approval  for a  revised  construction  schedule  under  the  Casecnan
Indenture.  In connection with the revised schedule, the ultimate parent company
of CE Casecnan agreed to make available up to $11.6 million of additional  funds
under certain conditions pursuant to a Shareholder Support Letter dated February
8, 2001 (the "Shareholder Support Letter").

<PAGE>

Under the Project Agreement, if NIA is able to accept delivery of water into the
Pantabangan  Reservoir and NPC has completed the Project's related  transmission
line,  the  Company is liable to pay NIA $5,500 per day for each day of delay in
completion of the Casecnan  Project beyond July 27, 2000,  increasing to $13,500
per day for each day of delay in completion  beyond November 27, 2000.  Although
the  transmission  line is complete,  NIA has not yet  installed  the  Project's
metering equipment. Accordingly, no liquidated damages payments to NIA have been
made.

The  Company's  ability  to make  payments  on any of its  existing  and  future
obligations  is  dependent  on  NIA's  and  the  Republic  of  the  Philippines'
performance of their obligations under the Project Agreement and the Performance
Undertaking,  respectively.  Except to the extent expressly  provided for in the
Shareholder  Support  Letters,  no  shareholders,  partners or affiliates of the
Company, including MidAmerican,  and no directors,  officers or employees of the
Company  will  guarantee  or be in any way liable for  payment of the  Company's
obligations.  As a result, payment of the Company's obligations depends upon the
availability  of  sufficient  revenues  from the  Company's  business  after the
payment of operating expenses.

NIA's payments of obligations  under the Project Agreement will be substantially
denominated  in United States  dollars and are expected to be the Company's sole
source of operating  revenues.  Because of the Company's  dependence on NIA, any
material failure of NIA to fulfill its obligations  under the Project  Agreement
and any  material  failure of the  Republic  of the  Philippines  to fulfill its
obligations  under the Performance  Undertaking would  significantly  impair the
ability of the Company to meet its existing and future obligations.

There are pending bills before the Philippine Congress and the Philippine Senate
aimed at  restructuring  the  electric  industry,  privatization  of the NPC and
introduction of a competitive  electricity market,  among others. The passage of
the bills may have an impact on the Company's future operations and the industry
as a whole, the effect of which is not yet determinable and estimable.

Note 8 - Fair Value of Financial Instruments
--------------------------------------------

Financial  Accounting  Standards  Board (FASB)  Statement No. 107,  "Disclosures
About Fair Value of Financial Instruments",  defines the fair value of financial
instruments  as the  amount at which the  instruments  could be  exchanged  in a
current transaction  between willing parties.  Although management uses its best
judgment in estimating the fair value of these financial instruments,  there are
inherent  limitations in any  estimation  technique.  Therefore,  the fair value
estimates  presented herein are not necessarily  indicative of the amounts which
the Company could realize in a current transaction.
<PAGE>

The methods and assumptions used to estimate fair value are as follows:

Notes and Bonds Payable
-----------------------

The fair value of the Company's  notes and bonds payable are estimated  based on
quoted market prices. The carrying amounts in the table below are included under
the indicated captions in Note 3 (in thousands):

========================================================================
                         2000                     1999
------------------------------------------------------------------------
                    Carrying   Estimated    Carrying       Estimated
                      Value    fair value     value        fair value
------------------------------------------------------------------------
Series B Bonds      $171,500     $156,134    $171,500       $166,527
Series A Notes       125,000      114,875     125,000        121,962
FRNs                  56,250       53,859      75,000         73,500
------------------------------------------------------------------------
                    $352,750     $324,868    $371,500       $361,989
========================================================================

Other financial instruments

Financial  instruments  other than notes and bonds payable of a material  nature
fall into the  definition  of  short-term  and fair value are  estimated  as the
carrying amount.

Note 9 - Subsequent events
--------------------------

On February 12, 2001, the Contractor  filed a Request for  Arbitration  with the
International  Chamber  of  Commerce  seeking  an  extension  of the  Guaranteed
Substantial  Completion  Date  by up to  153  days  through  August  31,  2001 -
resulting  from  various  alleged  force  majeure  events.  In a March 20,  2001
Supplement to Request for  Arbitration,  the Contractor also seeks  compensation
for alleged  additional  costs it incurred from the claimed force majeure events
to the extent it is unable to recover  from its  insurer.  CE Casecnan  believes
such  allegations  are  without  merit and  intends  to  vigorously  defend  the
Contractor's claims.

In connection with the expected  extension of the Substantial  Completion  Date,
the ultimate parent of the Company agreed to make up to $11.6 million  available
under certain condition to fund the costs of reaching completion.

Note 10 - Reclassification
--------------------------

Certain accounts in the 1999 financial  statements were  reclassified to conform
with the 2000 financial statements  presentation.  Such reclassification did not
impact previously  reported net income or retained earnings.
<PAGE>

Item  9:  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

The  Company  filed a  Current  Report on Form 8-K  dated  September  7, 2000 as
amended by Form 8-K dated December 18, 2000  reporting the  replacement of Sycip
Gorres  Velayo and Co.,  an Arthur  Andersen  member  firm,  and the  subsequent
appointment of Joaquin Cunanan and Co., a PricewaterhouseCoopers member firm, as
the independent accountants for the Company for 2000.

In connection  with that report,  the Company  stated that Sycip Gorres Velayo &
Co.'s  reports on the  Company's  financial  statements  for the two most recent
fiscal years ended  December 31, 1999 and 1998  contained no adverse  opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,  and
there  were no  disagreements  with Sycip  Gorres  Velayo & Co. on any matter of
accounting principles or practices, financial statement disclosures, or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
Sycip  Gorees  Velayo & Co.,  would have  caused it to make a  reference  to the
subject matter of the disagreements in connection with its audit reports.


<PAGE>


PART III

Item 10.  Directors and Executive Officers of the Company

The following  table sets forth the names,  ages, and positions of the directors
and executive officers of the Company:

NAME                      AGE                                 POSITION

David L. Sokol             44   Director and Chairman
Gregory E. Abel            38   Vice Chairman
Patrick J. Goodman         34   Director, Senior Vice President and Chief
                                  Financial Officer
Steven A. McArthur         43   Senior Vice President
Douglas L. Anderson        43   Vice President, General Counsel and Assistant
                                  Secretary
David A. Baldwin           36   Director, Vice President and General Manager
Jose Sandejas              63   Director and Corporate Secretary
Marivic Punzalan-Espiritu  33   Director and Assistant Corporate Secretary
Jose Jaime Cruz            30   Director
Scott LaPrairie            43   Director
Rachel Hernandez           34   Director
James D. Stallmeyer        43   Vice President
Brian K. Hankel            38   Vice President and Treasurer
Paul J.Leighton            47   Assistant Corporate Secretary

Directors of the Company are elected  annually and hold office until a successor
is elected. Executive officers are chosen from time to time by vote of the Board
of Directors.  Pursuant to the terms of the Stockholders  Agreement, CE Casecnan
Ltd.  is  entitled to elect  seven of the  directors,  and each of the  minority
investors is entitled to elect one director.

David L.  Sokol.  In  addition  to  serving as a Director  and  Chairman  of the
Company,  Mr. Sokol has been Chief Executive  Officer of MidAmerican since April
19,  1993 and served as  President  of  MidAmerican  from  April 19,  1993 until
January 21, 1995.  Mr. Sokol has been  Chairman of the Board of Directors  since
May 1994 and a director of MidAmerican since March 1991.  Formerly,  among other
positions  held in the  independent  power  industry,  Mr.  Sokol  served as the
President and Chief Executive  Officer of Kiewit Energy  Company,  which at that
time was a wholly owned subsidiary of PKS, and Ogden Projects, Inc.

Gregory E. Abel.  In addition to serving as Vice  Chairman of the  Company,  Mr.
Abel is President and Chief Operating  Officer of  MidAmerican.  Mr. Abel joined
MidAmerican in 1992. Mr. Abel is a Chartered Accountant and from 1984 to 1992 he
was employed by Price  Waterhouse.  As a Manager in the San Francisco  office of
Price Waterhouse, he was responsible for clients in the energy industry.
<PAGE>

Patrick J. Goodman.  In addition to serving as Director,  Senior Vice  President
and Chief  Financial  Officer for the Company,  he is Senior Vice  President and
Chief Financial Officer for MidAmerican.  Mr. Goodman joined MidAmerican in June
1995, and served as Manager of  Consolidation  Accounting  until  September 1996
when he was promoted to Controller.  Prior to joining  MidAmerican,  Mr. Goodman
was a financial manager for National Indemnity Company and a senior associate at
Coopers & Lybrand.

Steven A.  McArthur.  In addition to serving as Senior  Vice  President  for the
Company,  Mr.  McArthur is a Senior Vice President and Secretary of MidAmerican.
Mr.  McArthur  joined  MidAmerican in February 1991. From 1988 to 1991 he was an
attorney in the Corporate Finance Group at Shearman & Sterling in San Francisco.
From  1984 to  1988,  he was an  attorney  in the  Corporate  Finance  Group  at
Winthrop, Stimson, Putnam & Roberts in New York.

Douglas L. Anderson.  In addition to serving as Vice President,  General Counsel
and Assistant  Secretary  for the Company,  Mr.  Anderson is Vice  President and
Assistant  General  Counsel of  MidAmerican  and  General  Counsel of  CalEnergy
Generation.  Mr. Anderson joined MidAmerican in February 1993. From 1990 to 1993
Mr.  Anderson was a business  attorney  with Fraser,  Stryker,  Vaughn,  Meusey,
Olson,  Boyer & Bloch,  P.C.  in Omaha  and  prior  to that Mr.  Anderson  was a
principal in the firm Anderson & Anderson.

David A. Baldwin. In addition to serving as Director, Vice President and General
Manager for the Company,  he is President and General  Manager,  Philippines for
MidAmerican.  From  December  1996 to June  1997,  Mr.  Baldwin  served  as Vice
President,  Project  Development  for Asia Power Ltd. In Hong Kong. From October
1994 to December 1996, Mr. Baldwin was Project Director at SouthPac  Corporation
Ltd. in New Zealand and,  prior to that, he held a series of project  management
and  engineering  positions at Shell  International  in the  Netherlands and New
Zealand.

Jose Sandejas.  In addition to serving as a Director and Corporate  Secretary of
the Company,  Mr. Sandejas is a partner with the law firm of Quisumbing Torres &
Evangelista.

Marivic  Punzalan-Espiritu.  In addition to serving as a Director and  Assistant
Corporate Secretary of the Company, Ms.  Punzalan-Espiritu is a partner with the
law firm of Quisumbing Torres & Evangelista.

Jose Jaime Cruz.  In addition to serving as a Director of the Company,  Mr. Cruz
is an attorney with the law firm of Quesumbing Torres & Evangelista.

Scott  LaPrairie.  In  addition  to serving as a Director  of the  Company,  Mr.
LaPrairie is President and Chief  Executive  Officer of the  LaPrairie  Group of
Companies.
<PAGE>

Rachel  Hernandez.  In  addition to serving as a Director  of the  Company,  Ms.
Hernandez is Corporate Counsel for the Company and certain of its affiliates.

James D.  Stallmeyer.  In addition to serving as Vice  President of the Company,
Mr. Stallmeyer is Commercial  Director and General Counsel of Northern Electric.
Mr.  Stallmeyer  joined the Company in 1993.  Mr.  Stallmeyer  practiced  in the
public  finance and banking  areas at Chapman and Cutler in Chicago from 1984 to
1987 and in the corporate  finance  department from 1989 to 1993. Prior to that,
Mr.  Stallmeyer was an attorney in the public finance  department of the Chicago
office of Skadden,  Arps, Slate, Meagher & Flom in 1987 and 1988 and was a legal
writing  instructor  at the  University  of Illinois  College of Law in 1988 and
1989.

Brian K. Hankel.  In addition to serving as Vice President and Treasurer for the
Company,  he is Vice President and Treasurer for MidAmerican.  Mr. Hankel joined
MidAmerican  in February 1992 as a Treasury  Analyst and served in that position
to December 1995. Mr. Hankel was appointed  Assistant  Treasurer in January 1996
and was appointed  Treasurer in January 1997. Prior to joining the Company,  Mr.
Hankel was a Money  Position  Analyst at FirsTier  Bank of Lincoln  from 1988 to
1992.

Paul J. Leighton.  In addition to serving as Assistant Corporate Secretary,  Mr.
Leighton is also Vice President,  Corporate Law,  Assistant  General Counsel and
Assistant  Secretary  of  MidAmerican.  Mr.  Leighton  has  served as  Corporate
Secretary for  MidAmerican  and its  predecessor  companies since 1988 and as an
attorney since 1978.

Item 11.  Executive Compensation

None of the executive officers or directors of the Company receives compensation
from the Company for  services as officers  or  directors  of the  Company.  All
directors are  reimbursed  for their  expenses in attending  board and committee
meetings.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Description of Capital Stock

As of December 31, 2000, the authorized  capital stock of the Company  consisted
of 2,148,000  shares of common stock, par value 1.00 peso per share (the "Common
Stock"),  of which 767,162 shares were  outstanding.  There is no public trading
market for the Common  Stock.  As of December  31, 2000 there were 11 holders of
record of the Common Stock. Holders of Common Stock are entitled to one vote per
share on any matter coming before the stockholders for a vote.

The Indenture  contains  certain  restrictions  on the payment of dividends with
respect to the Common Stock.


<PAGE>


Principal Holders

The following table sets forth  information with respect to the shares of common
stock owned of record and  beneficially  by all persons who own of record or are
known by the Company to own beneficially more than 5% of the common stock and by
all directors and officers of the Company as a group.

                                                 Number Of      % Of Common
Name and Address of Owner                      Shares Owned*    Stock Owned

1.   CE Casecnan, Ltd. (1)                       537,005           70% (2)
     a Bermuda corporation
     c/o Conyers Dill & Pearman
     Clarendon House
     P.O. Box 666
     Hamilton, Bermuda HM CX

2.   LaPrairie Group Contractors
        (International), Ltd.                    115,074           15% (3)
     a Barbados corporation
     c/o P.O. . Box 690C
     Bridgetown, Barbados

3.   San Lorenzo Ruiz Builders and
        Developers Group, Inc.                   115,074           15% (3)(4)
     a Philippine corporation
     Violago Compound
     222 East Rodriguez Avenue
     Quezon City, Philippines

*In  addition,  each  director of the  Company  owns one share in the Company as
required by Philippine law.

(1)  MidAmerican indirectly owns CE Casecnan,  Ltd., a Bermuda corporation which
     is the registered owner of the shares.

(2)  Number of shares  owned  subject to upward  adjustment  based on  projected
     level of financial return to MidAmerican from the Project calculated at the
     time of  Completion  and the  absence of the timely  exercise of the option
     specified in note (4) below.

(3)  Number of shares owned and percentages owned subject to downward adjustment
     based on  projected  level of  financial  return  to  MidAmerican  from the
     Project  calculated  at the time of  Completion.  Neither  of the  minority
     shareholders  will have a major role in the  development,  construction  or
     operation of the Casecnan project.
<PAGE>

(4)  During 1998, MidAmerican purchased  substantially all of the shares held by
     San Lorenzo Ruiz Builders and Developers Group Inc.;  however,  San Lorenzo
     has an option to repurchase those shares at project completion.

Item 13.  Certain  Relationships and Related Transactions

Not Applicable.



<PAGE>


PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

The  Company  filed a  Current  Report on Form 8-K  dated  September  7, 2000 as
amended by Form 8-K dated December 18, 2000  reporting the  replacement of Sycip
Gorres  velayo and Co.,  an Arthur  Andersen  member  firm,  and the  subsequent
appointment of Joaquin Cunanan and Co., a PricewaterhouseCoopers member firm, as
the independent accountants for the Company for 2000.


<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned,  thereunto duly authorized,  in the City of Omaha,  State of
Nebraska, on March 29, 2001.

                          CE CASECNAN WATER AND ENERGY COMPANY, INC.



                          By:      /s/ * Douglas L. Anderson
                                         Douglas L. Anderson
                                         Vice President & General Counsel

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has caused this report to be signed by the following  persons in the  capacities
and on the dates indicated:

Signature                  Title                                    Date

/s/ David L. Sokol*       Director and Chairman of the Board     March 29, 2001
-------------------
David L. Sokol

/s/ David A. Baldwin*     Vice President & General Manager       March 29, 2001
---------------------
David A. Baldwin          (Principal Executive Officer)

/s/ Patrick J. Goodman*   Director, Senior Vice President and
-----------------------   Chief Financial Officer
Patrick J. Goodman        (Principal Financial Officer)          March 29, 2001

/s/ Rachel Hernandez*     Director                               March 29, 2001
---------------------
Rachel Hernandez

/s/ Marivic Espiritu *    Director                               March 29, 2001
----------------------
Marivic Espiritu

/s/ Jose Jaime Cruz*      Director                               March 29, 2001
--------------------
Jose Jaime Cruz

/s/ Jose R. Sandejas*     Director                               March 29, 2001
Jose R. Sandejas

*By: /s/ Douglas L. Anderson
     ------------------------
     Douglas L. Anderson
     Attorney-in-Fact


<PAGE>


                                INDEX TO EXHIBITS

Exhibit No.       Description of Exhibit

3.1  Articles of  Incorporation  of the Company  (incorporated  by  reference to
     Exhibit 3.1 the Company's  Registration  Statement on Form S-4, as amended,
     dated January 25, 1996 ("Form S-4")).

3.2  By-laws of the  Company  (incorporated  by  reference  to  Exhibit  3.2 the
     Company's Form S-4).

4.1(a) Trust  Indenture,  dated as of November 27, 1995,  between Chemical Trust
     Company of California and the Company (incorporated by reference to Exhibit
     4.1(a) the Company's Form S-4).

4.1(b) First  Supplemental  Indenture,  dated  as of  April  10,  1996,  between
     Chemical  Trust  Company of  California  and the Company  (incorporated  by
     reference to Exhibit 4.1(b) to the Company's Form S-4).

4.2  Exchange and Registration Rights Agreement,  dated as of November 27, 1995,
     by and among CS First Boston  Corporation,  Bear Stearns & Co. Inc., Lehman
     Brothers Inc. and the Company (incorporated by reference to Exhibit 4.2 the
     Company's Form S-4).

4.3  Collateral  Agency and  Intercreditor  Agreement,  dated as of November 27,
     1995, by and among Chemical  Trust Company of  California,  Far East Bank &
     Trust Company and the Company (incorporated by reference to Exhibit 4.3 the
     Company's Form S-4).

4.4  Mortgage and  Security  Agreement,  dated as of November  10, 1995,  by and
     among CE Casecnan  Ltd.,  Kiewit Energy  International  (Bermuda)  Ltd., La
     Prairie Group Contractors  (International)  Ltd., San Lorenzo Ruiz Builders
     and Developers Group, Inc., Chemical Trust Company of California,  Far East
     Bank & Trust Company and the Company  (incorporated by reference to Exhibit
     4.4 the Company's Form S-4).

4.6  Deposit and Disbursement  Agreement,  dated as of November 27, 1995, by and
     among the Company,  Chemical  Trust  Company of  California,  Kiewit Energy
     Company and the Company  (incorporated  by reference to the Company's  Form
     S-4).

4.7  Consent of NIA,  dated as of November 10, 1995,  to the  assignment  of the
     Amended and Restated Casecnan Project Agreement  (incorporated by reference
     to Exhibit 4.7 to the Company's Form S-4).

4.8  Consent of the Republic of  Philippines,  dated  November 10, 1995,  to the
     assignment  of the  Performance  Undertaking  and the Amended and  Restated
     Casecnan Project Agreement (incorporated by reference to Exhibit 4.8 to the
     Company's Form S-4).

4.9  Consent  of Hanbo  Corporation  and You One  Engineering  and  Construction
     Company,  Ltd.,  dated as of November 17, 1995,  to the  assignment  of the
     Engineering,   Procurement  and  Construction  Contract   (incorporated  by
     reference to Exhibit 4.9 to the Company's Form S-4).

4.10 Consent of Hanbo Steel, dated as of November 17, 1995, to the assignment of
     the  Guaranty  of  Engineering,   Procurement  and  Construction   Contract
     (incorporated by reference to Exhibit 4.10 to the Company's Form S-4).

4.11 Notification,  dated as of  November  27,  1995,  from the Company to Korea
     First  Bank,  of  the  assignment  of  the  Irrevocable  Letter  of  Credit
     (incorporated by reference to Exhibit 4.11 to the Company's Form S-4).

10.1 Amended and Restated Casecnan Project Agreement, dated as of June 26, 1995,
     between   the   National   Irrigation   Administration   and  the   Company
     (incorporated by reference to Exhibit 10.1 the Company's Form S-4).

10.2 Performance  Undertaking,  dated  as of  July  20,  1995,  executed  by the
     Secretary  of  Finance  on  behalf  of  the  Republic  of  the  Philippines
     (incorporated by reference to Exhibit 10.2 to the Company's Form S-4).

10.3 Engineering, Procurement and Construction Contract, dated as of October 10,
     1995, by and among Hanbo Corporation,  You One Engineering and Construction
     Company,  Ltd. and the Company  (incorporated  by reference to Exhibit 10.3
     the Company's Form S-4)

10.4 Master Equipment Lease Agreement, dated as of November 1, 1995, between You
     One   Engineering   and   Construction   Company,   Ltd.  and  the  Company
     (incorporated by reference to Exhibit 10.4 the Company's Form S-4).

10.5 Sublease  Agreement  No. 1, dated as of November  1, 1995,  between You One
     Engineering and Construction Company, Ltd. and the Company (incorporated by
     reference to Exhibit 10.5 the Company's Form S-4).

10.6 Guaranty of Engineering, Procurement and Construction Contract, dated as of
     November 13,  1995,  by Hanbo Steel  guaranteeing  the  performance  of the
     obligations of Hanbo  Corporation and You One Engineering and  Construction
     Company,  Ltd. under the Engineering  Procurement and Construction Contract
     (incorporated by reference to Exhibit 10.6 to the Company's Form S-4).

10.7 Korea First Bank Irrevocable  Letter of Credit issued to the Company in the
     aggregate   principal   amount  of   U.S.$117,850,000.00   to  support  the
     obligations of Hanbo  Corporation and You One Engineering and  Construction
     Company, Ltd. under the Engineering,  Procurement and Construction Contract
     (incorporated by reference to Exhibit 10.7 to the Company's Form S-4).

10.8 Engineering,  Procurement  and  Construction  Contract  dated  May 7,  1997
     between the Company and CP Casecnan - Consortium (incorporated by reference
     to Exhibit 10.8 to the Company's Form 10-K dated December 31, 1998).

10.9 Amendment  Agreement  dated  November  20, 1999  between the Company and CP
     Casecnan -  Consortium  (incorporated  by  reference to Exhibit 10.9 to the
     Company's Form 10-K dated December 31, 1999).

24   Power of Attorney