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, 2001
                          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, 2002.



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                                TABLE OF CONTENTS

PART I........................................................................4
ITEM 1.  BUSINESS.............................................................4
   General....................................................................4
   Project....................................................................4
       Terms of the Securities................................................9
              General.........................................................9
              Payment of Principal and Interest...............................9
              Priority of Payments...........................................11
              Debt Service Reserve Fund......................................11
              Optional Redemption............................................11
              Mandatory Redemption...........................................12
              Change in Control Put..........................................12
              Profit Distributions...........................................12
              Ranking and Security for the Securities........................13
              Ratings........................................................13
              Nature of Recourse on the Securities...........................13
              Incurrence of Additional Debt..................................13
              Principal Covenants............................................15
       Insurance.............................................................16
       Regulatory Matters....................................................16
       Employees.............................................................17
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..........23
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................24
   Reports of Independent Public Accountants.................................25
   Balance  Sheets...........................................................27
   Statements of Income......................................................28
   Statements of Changes in Stockholders' Equity.............................29
   Statements of Cash Flows..................................................30
   Notes to Financial Statements.............................................31
ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL  DISCLOSURE.......................................44
PART III.....................................................................45
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.....................45
ITEM 11. EXECUTIVE COMPENSATION..............................................47
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......47
   Description of Capital Stock..............................................47
   Principal Holders.........................................................48
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION.......................49
PART IV......................................................................50
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES ON FORM 8-K............50
SIGNATURES...................................................................51
INDEX TO EXHIBITS............................................................52



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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").  The Casecnan  Project
commenced  commercial  operations  on December 11,  2001.  Pursuant to the share
ownership adjustment mechanism in the Shareholder Agreement, which is based upon
pro-forma  financial  projections  of the Casecnan  Project at  commencement  of
commercial  operations,  MidAmerican  Energy Holdings  Company  ("MidAmerican"),
through its wholly owned  indirect  subsidiary  CE Casecnan Ltd, has advised the
minority shareholders that MidAmerican's  ownership interest in the Company will
increase to 100%. An initial shareholder has indicated its disagreement with the
ownership  adjustment  and its right to up to a 15%  ownership  interest and has
requested certain information with respect to the project's economics which form
the basis of such adjustment.

     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 is located at  Pantabangan  in the
Province of Nueva Ecija, Philippines.

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  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 allows electrical
energy to be generated  at a new 150 MW rated  capacity  power  plant,  which is
located in an underground  powerhouse  cavern at the end of the water tunnel.  A
tailrace discharge tunnel of approximately  three kilometers delivers 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
is  required.  Once in the  reservoir  at  Pantabangan,  the  water is under the
control of, and for the use of the Philippine National Irrigation Administration
("NIA").

     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,   which  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  constructed and operates 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  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.

     The water  delivery  fee is a fixed  monthly  amount,  to be received in US
Dollars at the end of each month,  based on 801.9  million cubic meters of water
flow past the water  delivery  point per year,  pro-rated to 66.8 million  cubic
meters per month.  The unit price for water is  established  at $0.029 per cubic
meter  (subject  to  adjustment  as set forth in the  Project  Agreement)  as of
January 1, 1994 and  escalated at seven and one-half  percent  (7.5%) per annum,
pro-rated  on a  monthly  basis,  through  the  end of  the  fifth  year  of the
Cooperation  Period and then kept flat at that level for the last fifteen  years
of the Cooperation Period. The unit price for water is to be adjusted by $.00043
for each $1.0 million of certain taxes and fees paid by the Company as specified
in the  Project  Agreement.  The unit  price of  water  as of  December  2001 is
$0.0907. Actual deliveries of water greater than or less than 66.8 million cubic
meters in any month will not result in any adjustment of the water delivery fee.

     The guaranteed  energy fee is a fixed monthly amount,  to be received in US
Dollars at the end of each month,  based on energy  deliveries  of 228.0 million
kilowatt-hour  (kWh) per year,  pro-rated to 19.0 million kWh per month.  Actual
deliveries of energy less than 19.0 million kWh per month will not result in any
reduction of the  guaranteed  energy fee but will result in an adjustment to the
excess energy fee. The unit price for guaranteed  energy is $0.1596 per kWh.

     The excess energy fee is a variable amount, to be received in US Dollars at
the end of each month,  for electrical  energy delivered in that month in excess
of 19.0  million  kWh.  No  excess  energy  delivery  fee will be due  until all
cumulative  electrical  energy  shortfalls in previous months have been made up.
The unit  price  of  excess  energy  is  $0.1509  per  kWh.  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 US 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  78% of CE  Casecnan's  revenues.  At the  end of the  Cooperation
Period,  the  Casecnan  Project  will  be  transferred  to NIA at no  additional
consideration on an "as is" basis.

     NIA has  subsequently  paid all  amounts  invoiced  for  water  and  energy
delivery fees under the Project  Agreement as of December 31, 2001,  but has not
paid the tax reimbursement portion of the invoices. The tax reimbursement amount
could add approximately 30% to each invoice payment. This amount was not assumed
in  any  revenue  calculations  at the  time  the  Securities  were  issued  and
accordingly,  failure to receive these amounts  should not adversely  impact the
Company's ability to make regularly scheduled principal and interest payments on
the Securities.  CE Casecnan is in discussions with NIA and  representatives  of
the Philippine government regarding the tax reimbursement amounts.

     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  million of its 11.45%  Senior  Secured  Series A Notes due
2005 (the  "Series A Notes")  and $171.5  million of its 11.95%  Senior  Secured
Series B Bonds due 2010 (the  "Series B Bonds")  and $75  million  of its Senior
Secured  Floating Rate Notes due 2002,  pursuant to an indenture  dated November
27, 1995, as amended to date (the "Trust Indenture").

     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 both companies. 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 was 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 lenders' independent engineer under the
Trust Indenture.

     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 its March 20, 2001 Supplement to
Request for  Arbitration,  the Contractor  also seeks  compensation  for alleged
additional  costs of approximately $4 million it incurred from the claimed force
majeure events to the extent it is unable to recover from its insurer.  On April
20,  2001,  the  Contractor  filed a further  supplement  seeking an  additional
compensation  for damages of  approximately  $62  million for the alleged  force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor alleged that the circumstances  surrounding the placing of
the Casecnan  Project into  commercial  operation in December 2001 amounted to a
recission of the Replacement  Contract and filed a claim for unspecified quantum
meruit  damages.  CE Casecnan  believes all of such  allegations  and claims are
without  merit  and  is  vigorously  contesting  the  Contractor's  claims.  The
arbitration  is being  conducted  applying New York law pursuant to the rules of
the International Chamber of Commerce.

     On June 25, 2001, the arbitration tribunal temporarily enjoined CE Casecnan
from making calls on the demand  guaranty  posted by Banca di Roma in support of
the  Contractor's  obligations  to CE  Casecnan  for delay  liquidated  damages.
Hearings  on the force  majeure  claims  were held in London  from July 2 to 14,
2001, and hearings on the Contractor's  April 20, 2001 supplement from September
24 to October 3, 2001. Further hearings were held from January 21 to February 1,
2002 and additional hearings were held from March 14 to 19, 2002.

     As of  December  31,  2001,  the Company has  received  approximately  $6.0
million of liquidated  damages from demands made on the demand guarantees posted
by  Commerzbank  on  behalf  of the  Contractor.  Although  the  outcome  of the
arbitration,  as with any  litigious  proceeding,  is difficult  to assess,  the
Company believes it will prevail and receive  additional  liquidated  damages in
the arbitration.

     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.
The transmission line was completed on August 13, 2001 and NIA has completed the
installation  and  testing  of  the  Casecnan  Project's   metering   equipment.
Accordingly, the Company has accrued $1.6 million for liquidated damages payable
as of December 31, 2001, to NIA for 120 days of delay and this was shown as part
of accounts payable and accrued expenses in the balance sheet.

     The 20-year  Cooperation  Period under the Project  Agreement  commenced on
December 11, 2001,  the start of the Company's  commercial  operations.  NIA has
paid all amounts  invoiced for water and energy  delivery fees under the Project
Agreement since that date but has not paid the tax reimbursement  portion of the
invoices.  The tax  reimbursement  amount  could add  approximately  30% to each
invoice payment.  This amount was not assumed in any revenue calculations at the
time the  Securities  were  issued and  accordingly,  failure  to receive  these
amounts  should not  adversely  impact the Company's  ability to make  regularly
scheduled  principal and interest payments on the Securities.  CE Casecnan is in
discussions with NIA and representatives of the Philippine  government regarding
the tax reimbursement amounts.

     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.  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.

     The Philippine  Congress has passed the Electric Power Industry  Reform Act
of 2001 which is aimed at restructuring the power industry, privatization of the
NPC and  introduction of a competitive  electricity  market,  among others.  The
passage of the bill 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.


<PAGE>



Terms of the Securities

General

     In November 1995,  the Company  issued and sold (i) $125 million  aggregate
principal  amount of the 11.45% Senior  Secured  Series A Notes due November 15,
2005  ("Series A Notes"),  (ii) $171.5  million  aggregate  principal  amount of
11.95% Senior  Secured  Series B Bonds due November 15, 2010 ("Series B Bonds"),
and (iii) $75  million  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  Trust  Indenture  and the
Depositary Agreement.

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

Payment of Principal and Interest

     Interest  on the  Series  A  Notes  and  the  Series  B  Bonds  is  payable
semiannually  every May 15 and  November 15 (the  "Securities  Interest  Payment
Date"),  which  commenced on May 15, 1996, to the registered  Holders thereof at
the close of  business on 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.

     The $125  million  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 $171.5 million principal of the Series B Bonds due November 15, 2010 is
payable in semiannual installments, commencing May 15, 2002, as follows:



<PAGE>


                       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%

     The $75.0 million principal of the FRNs due November 15, 2002 is payable in
semiannual installments, which commenced on 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 are  payable
quarterly every February 15, May 15, August 15, and November 15, which commenced
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.



<PAGE>


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
were and will be deposited  in the  Construction  Fund and  disbursed to pay for
budgeted  construction  or  restoration  costs,  including  interest and,  where
applicable, principal on the Securities.

     After completion of the Casecnan Project,  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 to the  Revenue  Fund
maintained by the  Depositary  (other than payments  required to be used for VAT
payments to the Republic of the  Philippines).  Amounts paid to 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.

Debt Service Reserve Fund

     At the  completion of the Casecnan  Project,  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  to 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 next 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 the  completion  of the  Casecnan  Project,  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 Trust 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.

Change in Control Put

     When a Change in Control occurs, each Holder will have the right to require
the Company to repurchase all or any part of such Holder's  Securities at a cash
purchase  price 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 Trust Indenture.  There is no assurance that upon a Change in Control the
Company will have sufficient funds to repurchase the Securities.

Profit Distributions

     Prior  to  the  completion  of  the  Casecnan  Project,  there  will  be no
distributions   to  the   Company  or  its   shareholders.   After   completion,
distributions  may be made only from and to the  extent of amounts 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 Trust  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 held as
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 Trust Indenture the Company may
incur  certain  permitted  debt  senior  to the  Securities,  it has no  present
intention to do so.

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
affiliates, 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
shareholdings  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 the completion of the Casecnan Project,  debt incurred to finance
the  construction  of capital  improvements to the Casecnan  Project,  which are
required  to  ensure  compliance  with  applicable  law or  anticipated  changes
therein;  provided  that no such  debt  may be  incurred  unless  at the time of
incurrence of such debt, an independent  engineer confirms the reasonableness of
(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,  that 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 the completion of the Casecnan Project,  debt incurred to finance
the construction 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 the  reasonableness of (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;

     (d) After the completion of the Casecnan  Project,  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
Casecnan 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 debts in the ordinary  course of business
to  support  the  operation  and  maintenance  of the  Casecnan  Project,  in an
aggregate amount not to exceed $35 million at any time;

     (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 the  completion of the Casecnan
Project 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 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 Trust 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 Trust  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 Trust 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 Trust  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.  This  coverage  includes  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  is  insured  will  cover all  losses.
Nevertheless,  the  Company  will not  reduce  or  cancel  the  coverage  if the
Insurance  Consultant  determines it is not reasonable to do so and insurance is
available on commercially reasonable terms.

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 before 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,  2001,  the  Company  had  38  employees   consisting  of
operations,  maintenance,  logistics,  compliance, and engineering personnel. At
the  powerhouse  control  room,  personnel  monitor,   direct  and  control  the
operations and  maintenance of the whole Casecnan  Project.  The control room is
staffed 24 hours per day and is the  contact  point for the  Casecnan  Project's
customers and others. At the diversion structures,  personnel are 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.

Item 2.  Properties

     CE Casecnan's  principal property is the hydroelectric  power facility that
was  completed in December  2001.

Item 3.  Legal Proceedings

     Reference  is  made  to  a  discussion  of  the  Company's   current  legal
proceedings under Item 1 - Business.

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

===============================================================================
                                           Year ended December 31,
----------------------------- --------- --------- --------- --------- ---------
                                 2001     2000       1999      1998      1997
----------------------------- --------- --------- --------- --------- ---------
Total revenue                  $  8,174  $      -  $     -   $      -  $     -
Operating expenses                3,922       451        -          -        -

Net income (loss) to common
   stockholders                   2,867     4,857      699        381  (11,264)
Net income (loss) per share        3.74      6.33     0.91       0.50   (14.68)
Total assets                    515,550   482,373  522,398    553,433  491,912
Total liabilities               408,585   378,275  423,157    454,891  393,751
Notes payable                    40,763         -        -          -        -
Long-term debt, including       323,125   352,750  371,500    371,500  371,500
curent portion
Stockholders' equity            106,965   104,098   99,241     98,542   98,161
============================= ========= ========= ========= ========= =========

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

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.

Critical Accounting Policies

     The  preparation  of  financial   statements  and  related  disclosures  in
conformity with accounting  principles  generally  accepted in the United States
requires management to make judgments, assumptions and estimates that affect the
amounts reported in the financial  statements and accompanying  notes. Note 2 to
the financial  statements  describes  the  significant  accounting  policies and
methods used in the preparation of the financial statements.  Estimates are used
for, but not limited to, the accounting for the allowance for doubtful  accounts
and  impairment of  long-lived  assets.  Actual  results could differ from these
estimates. The following critical accounting policies are impacted significantly
by judgments, assumptions and estimates used in the preparation of the financial
statements.

Allowance for Doubtful Accounts

     The allowance for doubtful accounts is based on the Company's assessment of
the collectibility of specific customer accounts.

Impairment of long-lived assets

     Impairment of long-lived  assets is 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.

<PAGE>

Results of Operations:

The Casecnan Project commenced commercial operations on December 11, 2001.

     The revenue of $8.2 million for the year ended  December 31, 2001  consists
of revenue for the delivery of water and  generation  and delivery of electrical
energy.  Revenue  from water  delivery,  guaranteed  energy  and  excess  energy
generated and delivered are 50%, 26% and 24%, respectively, of the total revenue
for the year.

     A total  of $0.9  million  was  used  to  finance  the  costs  of  start-up
activities  in 2001  compared  to $0.5  million in 2000.  Plant  operations  and
doubtful  accounts  expense  aggregating $2.7 million were incurred during 2001.
Depreciation expense of $1.2 million was for the period after project completion
up to December 31, 2001.

     Interest  earned on cash  balances  declined  from $11.7 million in 1999 to
$7.6 million in 2000 and decreased to $1.5 million in 2001 due to declining cash
balances as funds were used for the construction  activities.  Interest expense,
including bond issue  amortization,  was $44.2 million,  $48.3 million and $46.3
million in 2001, 2000, and 1999,  respectively and such are related to the notes
and bonds payable issued by the Company in the fourth quarter of 1995.  Interest
capitalized  during  construction  was $41.7  million,  $47.5  million and $36.5
million in 2001, 2000, and 1999, respectively.

Liquidity and Capital Resources:

     CE Casecnan  constructed and operates 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  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.  The water delivery fee is a fixed monthly amount, to be
received in US Dollars at the end of each month,  based on 801.9  million  cubic
meters of water flow past the water delivery  point per year,  pro-rated to 66.8
million  cubic  meters per month.  The unit  price for water is  established  at
$0.029  per cubic  meter  (subject  to  adjustment  as set forth in the  Project
Agreement)  as of January 1, 1994 and  escalated at seven and  one-half  percent
(7.5%) per annum,  pro-rated  on a monthly  basis,  through the end of the fifth
year of the  Cooperation  Period  and then kept flat at that  level for the last
fifteen years of years of the Cooperation Period. The unit price for water is to
be adjusted by $.00043 for each $1.0  million of certain  taxes and fees paid by
the Company as specified in the Project Agreement. The unit price of water as of
December 2001 is $0.0907.  Actual  deliveries of water greater than or less than
66.8 million cubic meters in any month will not result in any  adjustment of the
water delivery fee. The guaranteed  energy fee is a fixed monthly amount,  to be
received in US Dollars at the end of each month,  based on energy  deliveries of
228.0 million  kilowatt-hour  (kWh) per year,  pro-rated to 19.0 million kWh per
month. Actual deliveries of energy less than 19.0 million kWh per month will not
result in any  reduction  of the  guaranteed  energy  fee but will  result in an
adjustment  to the excess  energy fee. The unit price for  guaranteed  energy is
$0.1596 per kWh. The excess energy fee is a variable  amount,  to be received in
US Dollars at the end of each month,  for  electrical  energy  delivered in that
month in excess of 19.0 million kWh. No excess  energy  delivery fee will be due
until all cumulative  electrical  energy delivery  shortfalls in previous months
have been made up. The unit price of excess  energy is $0.1509 per kWh. 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 78% of CE Casecnan's revenues.  At the end of
the Cooperation  Period,  the Casecnan  Project will be transferred to NIA at 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  million of its 11.45%  Senior  Secured  Series A Notes due
2005 (the  "Series A Notes")  and $171.5  million of its 11.95%  Senior  Secured
Series B Bonds due 2010 (the  "Series B Bonds")  and $75  million  of its Senior
Secured  Floating Rate Notes due 2002,  pursuant to an indenture  dated November
27, 1995, as amended to date (the "Trust Indenture").

     The Casecnan Project was initially  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. On
May 7, 1997, the Company  terminated the Hanbo Contract due to defaults by Hanbo
and HECC  including the  insolvency  of both  companies.  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 was  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 lenders' independent engineer under the
Trust Indenture.

     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 its March 20, 2001 Supplement to
Request for  Arbitration,  the Contractor  also seeks  compensation  for alleged
additional  costs of approximately $4 million it incurred from the claimed force
majeure events to the extent it is unable to recover from its insurer.  On April
20,  2001,  the  Contractor  filed a further  supplement  seeking an  additional
compensation  for damages of  approximately  $62  million for the alleged  force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor has alleged that the circumstances surrounding the placing
of the Casecnan Project into commercial operation in December 2001 amounted to a
recission  of the  Replacement  Contract  and has filed a claim for  unspecified
quantum meruit damages.  CE Casecnan believes all of such allegations and claims
are without merit and is vigorously  contesting  the  Contractor's  claims.  The
arbitration is being  conducted  applying New York law and pursuant to the rules
of the International Chamber of Commerce.

     On June 25, 2001, the arbitration tribunal temporarily enjoined CE Casecnan
from making calls on the demand  guaranty  posted by Banca di Roma in support of
the  Contractor's  obligations  to CE  Casecnan  for delay  liquidated  damages.
Hearings  on the force  majeure  claims  were held in London  from July 2 to 14,
2001, and hearings on the  Contractor's  April 20, 2001  supplement were held in
London from  September 24 to October 3, 2001.  Further  hearings  were held from
January 21 to February 1, 2002 and  additional  hearings were held from March 14
to 19, 2002.

     As of December 31, 2001 the Company has received approximately $6.0 million
of  liquidated  damages  from demands  made on the demand  guarantees  posted by
Commerzbank  on  behalf  of  the   Contractor.   Although  the  outcome  of  the
arbitration,  as with any  litigious  proceeding,  is difficult  to assess,  the
Company believes it will prevail and receive  additional  liquidated  damages in
the arbitration.

Contractual Obligations

     The Company has contractual obligations and commercial commitments that may
affect  its  financial  condition.  Based  on  management's  assessment  of  the
underlying provisions and circumstances of the material contractual  obligations
and commercial commitments of the Company,  including material off-balance sheet
and  structured  finance   arrangements,   there  is  no  known  trend,  demand,
commitment,  event or uncertainty that is reasonably likely to occur which would
have a  material  effect on the  Company's  financial  condition  or  results of
operations. The following table identifies the Company's material obligations as
of December 31, 2001:

==============================================================================
                                               Payments Due by Period
                              ------------------------------------------------
                                        Less Than    2-3       4-5     After 5
Contractual cash obligations    Total     1 Year    Years     Years     Years
------------------------------------------------------------------------------
(in thousands)
Long-term debt                $323,125  $ 35,200  $ 90,828  $ 90,767  $106,330
Other long-term obligations     40,763                        40,763
------------------------------------------------------------------------------

Total contractual cash
obligations                   $363,888  $ 35,200  $ 90,828  $131,530  $106,330
==============================================================================


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, 2001, the Company had  fixed-rate  long-term debt of $296.5
million in  principal  amount and having a fair value of $269.4  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  $15.4 million if
interest  rates were to increase by 10% from their  levels at December 31, 2001.
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, 2001,  the Company had  floating-rate  obligations of $26.6
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, 2001  levels,  the  Company's  consolidated
interest  expense would increase by  approximately  $4,000 each month based upon
December 31, 2001 principal balances.


<PAGE>



Item 8.  Financial Statements and Supplementary Data

Reports of Independent Accountants............................................25

Balance Sheets as of December 31, 2001 and 2000...............................27

Statements of Income for the Years Ended December 31,
2001, 2000 and 1999...........................................................28

Statements of Changes in Stockholders' Equity for the
Years Ended December 31, 2001, 2000 and 1999..................................29

Statements of Cash Flows for the Years Ended December 31,
2001, 2000 and 1999...........................................................30

Notes to Financial Statements.................................................31



<PAGE>



Report of Independent Accountants

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


     We have audited the  accompanying  balance  sheets of CE Casecnan Water and
Energy  Company,  Inc.  as of  December  31,  2001  and  2000,  and the  related
statements of income,  of changes in stockholders'  equity and of cash flows for
the years 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  audits.  The  financial  statements  of CE
Casecnan  Water and Energy  Company,  Inc. for the year ended  December 31, 1999
were audited by other  independent  accountants,  whose report dated January 25,
2000 expressed an unqualified opinion on those statements.

     We conducted  our audits 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  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,  2001  and  2000,  and the  results  of its
operations  and its cash  flows  for the years  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
February 26, 2002




<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.

                                 BALANCE SHEETS
                           DECEMBER 31, 2001 and 2000
                       (Amounts in thousands U.S. Dollars)

                                     ASSETS
==============================================================================
                                                              2001      2000
------------------------------------------------------------------------------

Current assets
     Cash                                                   $  1,078 $    703
     Trade receivable, net (Note 3)                            8,012        -
     Accrued interest and other receivable                        19      573
     Prepaid expenses and other current assets                 1,894       42
------------------------------------------------------------------------------
         Total current assets                                 11,003    1,318
Restricted cash and investments (Note 2)                       5,978   47,923
Bond issue costs, net (Note 2)                                 6,712    8,315
Property, plant and equipment, net (Notes 2 and 4)           486,486  419,121
Deferred income tax (Notes 2 and 6)                            5,371    5,696
------------------------------------------------------------------------------
                                                            $515,550 $482,373
==============================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses (Note 8)         $  5,176  $    960
     Accrued interest                                          5,014     5,565
     Payable to affiliates (Note 7)                           34,507    19,000
     Current portion of long-term debt (Notes 5 and 12)       35,200    29,625
-------------------------------------------------------------------------------
         Total current liabilities                            79,897    55,150
-------------------------------------------------------------------------------
Notes payable with related party (Notes 7 and 12)             40,763         -
-------------------------------------------------------------------------------
Long-term debt, net of current portion (Notes 5 and 12)      287,925   323,125
-------------------------------------------------------------------------------
Commitments and contingencies (Note 9)
-------------------------------------------------------------------------------
Stockholders' equity
     Capital stock (Note 10)
         Authorized - 2,148,000 shares at one
             Philippine peso ($0.038) par value per share
         Issued - 767,162 shares                                  29        29
     Additional paid-in capital                              123,807   123,807
     Accumulated deficit                                     (16,871)  (19,738)
-------------------------------------------------------------------------------
                                                             106,965   104,098
-------------------------------------------------------------------------------
                                                            $515,550  $482,373
===============================================================================

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


<PAGE>



                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                              STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
         (With comparative figures for the year ended December 31, 1999)
             (Amounts in thousands U.S. Dollars, except share data)

  ==============================================================================



                                                  2001          2000       1999
  ------------------------------------------------------------------------------
   Revenues (Notes 2 and 3)
      Delivery of water                        $   4,114     $    -    $      -
      Sale of electricity                          4,060          -           -
  ------------------------------------------------------------------------------
                                                   8,174          -           -
  ------------------------------------------------------------------------------
   Operating expenses
      Depreciation (Note 2)                        1,249          -           -
      Plant operations (Note 11)                   2,152        451           -
      Doubtful accounts expense (Note 3)             521          -           -
  ------------------------------------------------------------------------------
                                                   3,922        451           -
  ------------------------------------------------------------------------------
   Operating income (loss)                         4,252       (451)          -
  ------------------------------------------------------------------------------
   Other income (expenses)
       Interest income                             1,450      7,605      11,656
       Interest expense (Notes 5 and 7)          (44,162)   (48,349)    (46,329)
       Capitalized interest (Note 2)              41,652     47,454      36,501
  ------------------------------------------------------------------------------
                                                  (1,060)     6,710       1,828
  ------------------------------------------------------------------------------
   Income before provision for income tax          3,192      6,259       1,828
   Provision for deferred income tax (Note 6)        325      1,402       1,129
  ------------------------------------------------------------------------------
   Net income                                  $   2,867    $ 4,857    $    699
  ==============================================================================

   Net income per share (Note 2)                  $3.74       $6.33       $0.91
  ==============================================================================

   Average number of common shares outstanding  767,162     767,162     767,162
  ==============================================================================

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



<PAGE>



                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
         (With comparative figures for the year ended December 31, 1999)
             (Amounts in thousands U.S. Dollars, except share data)


================================================================================
                             Outstanding         Additional
                               Common    Common   Paid-in   Accumulated
                               Shares     Stock   Capital     Deficit     Total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 Balance, December 31, 1998    767,162    $29    $123,807    $(25,294)  $ 98,542
 Net income                          -      -           -         699        699
--------------------------------------------------------------------------------
 Balance, December 31, 1999                                   (24,595)    99,241
 Net income                          -      -           -       4,857      4,857
--------------------------------------------------------------------------------
 Balance, December 31, 2000    767,162     29     123,807     (19,738)   104,098
 Net income                          -      -           -       2,867      2,867
--------------------------------------------------------------------------------
 Balance, December 31, 2001    767,162    $29    $123,807    $(16,871)  $106,965
================================================================================

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



<PAGE>





                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
         (With comparative figures for the year ended December 31, 1999)
                       (Amounts in thousands U.S. Dollars)

================================================================================
                                                      2001     2000        1999
--------------------------------------------------------------------------------
Cash flows from operating activities
   Net income                                       $ 2,867   $ 4,857   $   699
   Adjustments to reconcile net income to
       net cash provided by (used in) operating
       activities:
       Depreciation                                   1,249         -         -
       Amortization of bond issue costs               1,603     2,270     1,324
       Provision for deferred income tax                325     1,402     1,129
   Changes in assets and liabilities
       Decrease in accrued interest receivable          554     1,177     1,264
       Increase in trade and other receivable        (8,012)        -         -
       Increase in prepaid expenses                  (1,852)      (42)        -
       Increase in accounts payable and accrued
       expenses                                         384       381         -
--------------------------------------------------------------------------------
   Net cash provided (used in) operating activities  (2,882)   10,045     4,416
--------------------------------------------------------------------------------
Cash flows from investing activities
   Additions to development and construction costs  (74,592)  (82,713)  (76,420)
   Liquidated damages received                        5,978         -         -
   Decrease (increase) in restricted:
       Cash and short-term investments               (5,978)   42,063   103,894
       Investments                                   47,923    74,253       166
   Increase (decrease) in accounts payable and
       accrued expenses related to development and
       construction costs                             3,281   (35,489)  (41,002)
--------------------------------------------------------------------------------
   Net cash used in investing activities            (23,388)   (1,886)  (13,362)
--------------------------------------------------------------------------------
Cash flows from financing activities
   Increase  in advances from affiliates             15,507     8,976     9,268
   Payment of long-term debt                        (29,625)  (18,750)        -
   Proceeds from notes payable                       40,763         -         -
--------------------------------------------------------------------------------
   Net cash provided by (used in)
   financing activities                              26,645    (9,774)    9,268
--------------------------------------------------------------------------------
Net increase (decrease) in cash                         375    (1,615)      322
Cash at beginning of year                               703     2,318     1,996
--------------------------------------------------------------------------------
Cash at end of year                                 $ 1,078   $   703   $ 2,318
================================================================================
Supplemental disclosure of cash flow information
       Interest paid during the period (net of
           amount capitalized)                      $ 1,267   $(1,259)  $ 8,670
================================================================================

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


<PAGE>


CE CASECNAN WATER AND ENERGY COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS
(Amounts in U.S. Dollars, unless indicated otherwise)


Note 1 - Organization and operations

     CE Casecnan  Water and Energy  Company,  Inc. (the Company) was  registered
with the Philippine  Securities  and Exchange  Commission on September 21, 1994.
The purpose of the Company is 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  and
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 (Cooperation Period)
with  "take-or-pay"  obligations  for water and  electricity.  At the end of the
Cooperation Period, the combined irrigation and 150 megawatt hydroelectric power
generation  project (the Casecnan Project) will be transferred to the Philippine
Government at no cost on an "as is" basis. 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.

     The Casecnan Project commenced commercial  operations on December 11, 2001.
Prior to this  date,  the  Company  was  considered  to be a  development  stage
enterprise.  Pursuant  to  the  share  ownership  adjustment  mechanism  in  the
Shareholder  Agreement,  which is based upon pro-forma financial  projections of
the Casecnan  Project at  commencement  of  commercial  operations,  MidAmerican
Energy  Holdings  Company  ("MidAmerican"),  through its wholly  owned  indirect
subsidiary  CE  Casecnan  Ltd,  has  advised  the  minority   shareholders  that
MidAmerican's  ownership  interest in the  Company  will  increase  to 100%.  An
initial shareholder has indicated its disagreement with the ownership adjustment
and its  right  to up to a 15%  ownership  interest  and has  requested  certain
information with respect to the project's economics which form the basis of such
adjustment.

     The  Company's  operations  are in one  reportable  segment,  the water and
electricity generation industry.

     The Company is registered with the Philippine Board of Investments as a new
operator of  hydroelectric  power plant with  pioneer  status  under the Omnibus
Investments  Code of 1987  (Executive  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 financial statements are prepared in accordance with generally accepted
accounting  principles  in the United  States of America.  The more  significant
accounting policies and practices of the Company are set forth below:

Basis of presentation

     The functional  and reporting  currency of the Company is the United States
Dollar.  Gains or losses  resulting  from  translation  of  monetary  assets and
liabilities in foreign currencies are not material.

     Restricted  cash and  investments are primarily  commercial  papers,  money
market 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, 2001
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  deferred  and  amortized  over the term of the
notes and bonds using the effective  interest rate method.  Amortization of bond
issue  costs is  capitalized  during  the  construction  period  and  charged to
operations, as an interest expense, upon completion of the Casecnan Project.

     Property,  plant and  equipment are stated at cost  (including  capitalized
interest costs) less accumulated  depreciation.  Depreciation is computed on the
straight-line method based on the Cooperation Period for the hydroelectric power
plant and office and building  structure,  and on the  estimated  useful life of
five years for other equipment.  Minor  expenditures for repairs and maintenance
are charged to operations as incurred; significant renewals and improvements are
capitalized. Liquidated damages relative to the Casecnan Project are recorded as
reduction  to the  cost  of the  capital  projects.  When  an  asset  is sold or
otherwise disposed of, its cost and related accumulated depreciation are removed
from the  accounts  and the  resulting  gain or loss is  credited  or charged to
operations.

     Interest on long-term  debt is  capitalized  as part of the cost of capital
projects  during  the  construction   period  and  charged  to  operations  upon
completion of the Casecnan Project.

     Deferred  income 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 income 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 income
tax  assets  if it is more  likely  than  not  that a tax  benefit  will  not be
realized.

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

     Impairment of long-lived  assets is 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.

     Revenues from sale of  electricity  and delivery of water are recognized as
income during the period in which actual  capacity is generated and delivered to
the  customer.  Interest  and other  income  are  recognized  when  earned.  The
allowance  for doubtful  accounts is based on the  Company's  assessment  of the
collectibility of customer accounts.

     Transactions in foreign currencies  (Philippines  pesos) are recorded based
on the  prevailing  rates of exchange at  transaction  dates.  Foreign  currency
denominated  monetary assets and liabilities are translated at the exchange rate
prevailing at the balance sheet date. The resulting  exchange  differences  from
settlements of foreign currency transactions and translations of monetary assets
and liabilities are credited or charged to operations.

     Retirement  cost is  determined  actuarially  based on the  Projected  Unit
Credit Actuarial Cost Method.

Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  in  the  United  States  of  America  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.

New accounting pronouncements

     In  August  2001,  the FASB  issued  SFAS No.  143,  Accounting  for  Asset
Retirement  Obligations.  This standard is effective for fiscal years  beginning
after June 15,  2002,  and  provides  accounting  requirements  for  obligations
associated with the retirement of tangible  long-lived assets and the associated
asset retirement costs. Under the standard,  the asset retirement  obligation is
recorded at fair value in the period in which it is incurred by  increasing  the
carrying amount of the related  long-lived  asset.  The liability is accreted to
its  present  value  in  each  subsequent  period  and the  capitalized  cost is
depreciated  over the  useful  life of the  related  assets.  The effect of this
standard on the financial statements has not been determined.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 supersedes  SFAS No.
121,  Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed of, but retains its fundamental provisions for recognizing
and measuring impairment of long-lived assets to be held and used. This standard
also requires that all  long-lived  assets to be disposed of by sale are carried
at the lower of  carrying  amount  or fair  value  less  cost to sell,  and that
depreciation  should cease to be recorded on such assets.  SFAS 144 standardizes
the accounting and  presentation  requirements  for all long-lived  assets to be
disposed of by sale,  superseding previous guidance for discontinued  operations
of business  segments.  This  standard is effective  for fiscal years  beginning
after December 15, 2001.

Reclassification

     Certain  accounts in the 2000 financial  statements  were  reclassified  to
conform with the 2001 financial statement  presentation.  Such  reclassification
did not impact previously reported net income or retained earnings.

<PAGE>

Note 3 - Trade receivable

     Trade receivable pertains to receivable from NIA for water delivered to NIA
and the  electricity  generated and  delivered by the Company to the  Philippine
National Power Corporation on behalf of NIA. Trade receivable as of December 31,
2001 consists of:

=============================================================
                                              Amount
                                          (in thousands)
-------------------------------------------------------------
-------------------------------------------------------------
Water delivery fee                           $4,474
Guaranteed energy delivery fee                2,059
Excess energy delivery fee                    2,000
-------------------------------------------------------------
                                              8,543
Less - allowance for doubtful accounts          521
-------------------------------------------------------------
                                             $8,012
=============================================================

     Water delivery fee is a fixed monthly amount,  to be received in US Dollars
at the end of each month, based on 801.9 million cubic meters of water flow past
the water  delivery  point per year,  pro-rated to 66.8 million cubic meters per
month.  The unit price for water is set at $0.029 per cubic  meter  (subject  to
adjustment  as set forth in the  Project  Agreement)  as of  January 1, 1994 and
escalated at seven and one-half percent (7.5%) per annum, pro-rated on a monthly
basis, through the end of the fifth year of the Cooperation Period and then kept
flat at that level for the last fifteen  years of the  Cooperation  Period.  The
unit  price for water is to be  adjusted  by  $.00043  for each $1.0  million of
certain  taxes  and  fees  paid  by the  Company  as  specified  in the  Project
Agreement.  The  unit  price of water as of  December  2001 is  $0.0907.  Actual
deliveries  of water  greater than or less than 66.8 million cubic meters in any
month will not result in any adjustment of the water delivery fee.

     Guaranteed energy delivery fee is a fixed monthly amount, to be received in
US Dollars at the end of each month, based on energy deliveries of 228.0 million
kilowatt-hour  (kWh) per year,  pro-rated to 19.0 million kWh per month.  Actual
deliveries of energy less than 19.0 million kWh per month will not result in any
reduction of the  guaranteed  energy fee but will result in an adjustment to the
excess energy fee. The unit price for guaranteed energy is $0.1596 per kWh.

     Excess  energy  delivery  fee is a variable  amount,  to be  received in US
Dollars at the end of each month,  for electrical  energy delivered in excess of
19.0 million kWh. No excess energy delivery fee will be due until all cumulative
electrical  energy  shortfalls  in  previous  months have been made up. The unit
price of excess energy is $0.1509 per kWh.

     NIA has  subsequently  paid all  amounts  invoiced  for  water  and  energy
delivery fees under the Project  Agreement as of December 31, 2001,  but has not
paid the tax reimbursement portion of the invoices. The tax reimbursement amount
could add approximately 30% to each invoice payment. This amount was not assumed
in  any  revenue  calculations  at the  time  the  Securities  were  issued  and
accordingly,  failure to receive these amounts  should not adversely  impact the
Company's ability to make regularly scheduled principal and interest payments on
the Securities.  CE Casecnan is in discussions with NIA and  representatives  of
the Philippine government regarding the tax reimbursement amounts.



<PAGE>


Note 4 - Property plant and equipment

     Property,  plant and  equipment at December 31 consist of the following (in
thousands):

==================================================================
                                        2001             2000
------------------------------------------------------------------
Hydroelectric power plant             $487,516         $
Office and other equipment                  44                -
------------------------------------------------------------------
                                       487,560                -
Less - accumulated depreciation          1,249                -
------------------------------------------------------------------
                                       486,311                -
Construction in progress                   175          419,121
------------------------------------------------------------------
                                      $486,486         $419,121
==================================================================

Note 5 - Long-term debt

     On November 27, 1995,  the Company issued $371.5 million worth of notes and
bonds to finance the construction of the Casecnan  Project.  These debts consist
of $75.0 million Senior Secured  Floating Rate Notes (FRNs) bearing  interest at
LIBOR plus 3.00% payable in  installment  through 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 in 2010.  For the year ended  December 31, 2001,  the notes and bonds
have  effective  interest  rates of 13.13% and 13.57% 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 5.59% and 10.72% in 2001
and was 5.60% at December 31,  2001.  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.

The repayment schedule is as follows (in thousands):

================================================================================
           FRNs     Series A notes         Series B bonds              Total
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
         $26,625       $125,000              $171,500                $323,125
================================================================================

     The  securities  areor 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.  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 the completion
of the Casecnan  Project,  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 Trust
Indenture. 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.

     When a Change in Control occurs, each Holder will have the right to require
the Company to repurchase all or any part of such Holder's  Securities at a cash
purchase  price 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 Trust Indenture.  There is no assurance that upon a Change in Control the
Company will have sufficient funds to repurchase the Securities.

     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;  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 was strictly used to fund the
construction  of the Casecnan  Project when the proceeds from the Series A Notes
and Series B Bonds were fully utilized.  The  contributions  are included in the
"Additional paid-in capital" account in the balance sheets.

     As of December 31, 2001,  MidAmerican  held $3.0 million of the outstanding
Casecnan  FRNs.  The  purchase of the FRNs by  MidAmerican  does not release the
Company of its obligations.

Note 6 - Deferred income tax asset

     The Company's  deferred income tax asset amounting to $5.4 million and $5.7
million  (net of  valuation  allowance  of $2.4  million  for both  years) as of
December  31, 2001 and 2000,  respectively,  consists  mainly of the  difference
between  the  financial   reporting  basis  and  the  tax  reporting  basis  for
development and construction  costs.  Valuation  allowance is recognized for the
portion of  deferred  income tax asset for which it is more likely than not that
the tax benefit will not be realized due to the income tax holiday for six years
from the start of commercial operations.

Note 7 - Related party transactions

     In the normal course of business, the Company transacts with its affiliates
in the form of advances for  construction  related and operating  expenses.  The
payable to  affiliates  was $34.5 million and $19.0 million at December 31, 2001
and 2000, respectively.

     The Company has $40.8 million of unsecured subordinated notes payable to CE
Casecnan Ltd. due November 15, 2005. The unsecured  notes bear interest at LIBOR
plus two (2%) percent which is payable every May 15 and November 15. Any overdue
payment of principal or interest  payable on the notes shall increase the annual
interest by two (2%) percent.  At December 31, 2001, the effective interest rate
on the notes was 6.0%.  The notes may be prepaid at any time without  premium or
penalty but with accrued interest, if any. The unsecured  subordinated notes and
any and all payments, whether of principal, interest or otherwise are subject in
all respects to the terms of the Subordination Agreement dated November 15, 2001
between CE Casecnan Ltd. and the Company in favor of the Trustee, the Collateral
Agent,  the  co-collateral  agent,  the  Depositary,  any party  that  becomes a
Permitted Counterparty under an Interest Rate/Currency Protection Agreement, any
party that becomes a working  capital  facility  agent and any other Person that
becomes a secured party under the Intercreditor Agreement.



<PAGE>


Note 8 - Accounts payable and accrued expenses

     Accounts  payable  and  accrued  expenses  at  December  31  consist of the
following (in thousands):

===============================================================================
                                                  2001            2000
-------------------------------------------------------------------------------
Accrued contractor's fees                        $1,783           $521
Accrued liquidated damages (Note 9)               1,620              -
Other accounts payable and accrued expenses       1,773            439
-------------------------------------------------------------------------------
                                                 $5,176           $960
===============================================================================

Note 9 - Commitments and contingencies

Replacement contract

     The Casecnan Project was initially  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. On
May 7, 1997, the Company  terminated the Hanbo Contract due to defaults by Hanbo
and HECC  including the  insolvency  of both  companies.  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 was  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 lenders' independent engineer under the
Trust  Indenture.  In January 2001, the Company  received a new working schedule
from the Contractor  that showed a completion date of August 31, 2001. The delay
in completion was  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.

     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 its March 20, 2001 Supplement to
Request for  Arbitration,  the Contractor  also seeks  compensation  for alleged
additional  costs of approximately $4 million it incurred from the claimed force
majeure events to the extent it is unable to recover from its insurer.  On April
20,  2001,  the  Contractor  filed a further  supplement  seeking an  additional
compensation  for damages of  approximately  $62  million for the alleged  force
majeure  event (and  geologic  conditions)  related to the collapse of the surge
shaft. The Contractor has alleged that the circumstances surrounding the placing
of the Casecnan Project into commercial operation in December 2001 amounted to a
recission  of the  Replacement  Contract  and has filed a claim for  unspecified
quantum meruit damages.  CE Casecnan believes all of such allegations and claims
are without merit and is vigorously  contesting  the  Contractor's  claims.  The
arbitration is being  conducted  applying New York law and pursuant to the rules
of the International Chamber of Commerce.

     On June 25, 2001, the arbitration tribunal temporarily enjoined CE Casecnan
from making calls on the demand  guaranty  posted by Banca di Roma in support of
the  Contractor's  obligations  to CE  Casecnan  for delay  liquidated  damages.
Hearings  on the force  majeure  claims  were held in London  from July 2 to 14,
2001, and hearings on the Contractor's  April 20, 2001 supplement from September
24 to October 3, 2001. Further hearings were held from January 21 to February 1,
2002 and additional hearings were held from March 14 to 19, 2002.

     Upon the 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 Trust 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").  The ultimate parent company has fully satisfied its obligations under
the Shareholder Support Letter.

     The  receipt of the new  working  schedule  did not  change the  Guaranteed
Substantial  Completion Date under the Replacement Contract,  and the Contractor
was still  contractually  obligated  either to complete the Project by March 31,
2001 or to pay liquidated  damages for the delay in  completion.  As of December
31, 2001,  the Company has  received  approximately  $6.0 million of  liquidated
damages from  demands made on the demand  guarantees  posted by  Commerzbank  on
behalf of the Contractor.  Although the outcome of the arbitration,  as with any
litigious  proceeding,  is  difficult  to assess,  the Company  believes it will
prevail and receive additional liquidated damages in the arbitration.

Project transmission line

     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.
The  Project  transmission  line was  completed  on August 13,  2001 and NIA has
completed  the  installation  and testing of the Project's  metering  equipment.
Accordingly,  the Company has accrued $1.6 million for liquidated  damages as of
December  31,  2001,  payable to NIA for 120 days of delay and this was shown as
part of accounts payable and accrued expenses in the balance sheets.

Concentration of risk

     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.  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.

Regulatory environment

     The Philippine  Congress has passed the Electric Power Industry  Reform Act
of 2001 which is aimed at restructuring the power industry, privatization of the
National Power Corporation and introduction of a competitive electricity market,
among others. The passage of the bill 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 10 - 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 certain rights to an ownership interest in the Company.

Note 11 - Retirement plan

     The Company has a funded,  noncontributory,  defined  benefit plan covering
all of its regular  employees.  The  benefits  are based on years of service and
compensation on the last year of employment.

     Based  on the  latest  actuarial  valuation  as of  January  1,  2001,  the
actuarial accrued  liability  amounted to $75,011 and the fair value of the plan
assets  amounted to $20,796  resulting  to an unfunded  actuarial  liability  of
$54,215.  The  principal  actuarial  assumptions  used to  determine  retirement
benefits  included  investment yield of 10% and salary increase rate of 11%. The
Company's  annual  contribution  to the  retirement  plan  consists of a payment
covering the current service cost for the year plus a payment toward funding the
actuarial accrued liability.

     The total retirement  expense incurred was $80,280 in 2001,  $8,278 in 2000
and $13,138 in 1999.

Note 12 - 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 that
the Company could realize in a current transaction.

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

Cash, trade receivable, accounts payable and accrued expenses

     The  carrying  amount  reported  in the balance  sheets for these  accounts
approximates  fair  value  because  of the  short  maturity  and  nature of such
accounts.

Notes payable

     The carrying amount reported in the balance sheets  approximates fair value
in the absence of quoted market price.

<PAGE>

Long-term debt

     The fair value of the Company's long-term debt is estimated based on quoted
market prices of similar types of arrangements.

==============================================================================
                               2001                           2000
------------------------------------------------------------------------------
                      Carrying       Estimated      Carrying      Estimated
     In thousands       value       fair value        value       Fair value
------------------------------------------------------------------------------
Series B Bonds        $171,500      $154,350        $171,500      $156,134
Series A Notes         125,000       115,000         125,000       114,875
FRNs                    26,625        25,028          56,250        53,859
------------------------------------------------------------------------------
                      $323,125      $294,378        $352,750      $324,868
==============================================================================
<PAGE>


Item 9. Changes in and  Disagreements  with  Accountants  on Accounting and
        Financial Disclosures

     None


<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            45    Director and Chairman
Gregory E. Abel           39    Vice Chairman and President
Patrick J. Goodman        35    Director, Senior Vice President and
                                Chief Financial Officer
Douglas L. Anderson       44    Vice President, General Counsel and
                                Assistant Secretary
David A. Baldwin          37    Director, Vice President and General Manager
Jose Sandejas             64    Director and Corporate Secretary
Marivic Punzalan-Espiritu 33    Director and Assistant Corporate Secretary
Jose Jaime Cruz           31    Director
Scott LaPrairie           44    Director
Linda Castillo            42    Director
James D. Stallmeyer       44    Vice President
Brian K. Hankel           39    Vice President and Treasurer
Paul J. Leighton          48    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 and President 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.

     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.

     Douglas L.  Anderson.  In  addition to serving as Vice  President,  General
Counsel and  Assistant  Secretary for the Company,  Mr.  Anderson is Senior Vice
President and General Counsel of MidAmerican. Mr. Anderson joined MidAmerican in
February  1993.  From 1990 to 1993.  Mr.  Anderson was a business  attorney with
Fraser & Stryker 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
..

     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.

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

     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.

     Linda B. Castillo. In addition to serving as a Director of the Company, Ms.
Castillo 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,  2001,  the  authorized  capital  stock of the Company
consisted of 2,148,000  shares of common stock,  par value 1.00  Philippine peso
($0.038)  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, 2001 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  Trust  Indenture  contains  certain  restrictions  on the  payment  of
dividends with respect to the Common Stock.



<PAGE>


Principal Stockholders

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

3.   San Lorenzo Ruiz Builders                     115,074          15% (3)(4)
     and Developers Group, Inc.
     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) Pursuant to the share ownership adjustment mechanism in the Shareholder
Agreement,  which is based upon pro-forma financial  projections of the Casecnan
Project at commencement of commercial  operations,  MidAmerican  Energy Holdings
Company  ("MidAmerican"),  through  its  wholly  owned  indirect  subsidiary  CE
Casecnan Ltd, has advised the minority shareholders that MidAmerican's ownership
interest  in the  Company  will  increase to 100%.  An initial  shareholder  has
indicated its disagreement with the ownership  adjustment and its right to up to
a 15% ownership  interest and has requested certain  information with respect to
the  project's  economics  which  form the basis of such  adjustment.  Number of
shares  owned  subject to upward  adjustment  based on the absence of the timely
exercise of the option specified in note (4) below.

     (3) Pursuant to the share ownership adjustment mechanism in the Shareholder
Agreement,  which is based upon pro-forma financial  projections of the Casecnan
Project at commencement of commercial  operations,  MidAmerican  Energy Holdings
Company  ("MidAmerican"),  through  its  wholly  owned  indirect  subsidiary  CE
Casecnan Ltd, has advised the minority shareholders that MidAmerican's ownership
interest  in the  Company  will  increase to 100%.  An initial  shareholder  has
indicated its disagreement with the ownership  adjustment and its right to up to
a 15% ownership  interest and has requested certain  information with respect to
the project's economics which form the basis of such adjustment.  Neither of the
minority shareholders will have a major role in the development, construction or
operation of the Casecnan project.

     (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  December  13, 2001
announcing  that on December  11, 2001 it achieved  commercial  operation of the
Casecnan combined  irrigation and hydroelectric  power generation  project under
the terms of the Project Agreement and that achievement of commercial  operation
commences the 20 year Cooperation Period under the Project Agreement.



<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, 2002.

                  CE CASECNAN WATER AND ENERGY COMPANY, INC.



                  By:   /s/ * Douglas L. Anderson
                        Douglas L. Anderson
                        Vice President

     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, 2002
-------------------
David L. Sokol

/s/ David A. Baldwin*      Vice President & General Manager       March 29, 2002
---------------------      (Principal Executive Officer)
David A. Baldwin

/s/ Patrick J. Goodman*    Director, Senior Vice President        March 29, 2002
-----------------------    and Chief Financial Officer
Patrick J. Goodman         (Principal Financial Officer)

/s/ Linda B. Castillo*     Director                               March 29, 2002
----------------------
Linda B. Castillo

/s/ Marivic Espiritu*      Director                               March 29, 2002
---------------------

/s/ Jose Jaime Cruz*       Director                               March 29, 2002
--------------------
Jose Jaime Cruz

/s/ Jose R. Sandejas*      Director                               March 29, 2002
---------------------
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
FirstBank,  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



<PAGE>



                                POWER OF ATTORNEY


     The undersigned, a member of the Board of Directors and/or as Officer of CE
CASECNAN  WATER AND  ENERGY  COMPANY,  INC.,  a  corporation  registered  in the
Republic of the Philippines  (the  "Company"),  hereby  constitutes and appoints
Douglas L.  Anderson  and Paul J.  Leighton and each of them as his/her true and
lawful   attorney-in-fact  and  agent,  with  full  power  of  substitution  and
resubstitution,  for and in his/her stead, in any and all capacities, to sign on
his/her  behalf the Company's  Form 10-K Annual Report for the fiscal year ended
December  31, 2001 and to execute any  amendments  thereto and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the United  States  Securities  and Exchange  Commission  and  applicable  stock
exchanges,  with the full power and  authority  to do and perform each and every
act and thing  necessary or advisable to all intents and purposes as he might or
could  do  in  person,   hereby   ratifying   and   confirming   all  that  said
attorney-in-fact and agent or his/her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

Dated as of March 29, 2002.

/s/ David L. Sokol
DAVID L. SOKOL


/s/ Patrick J. Goodman                      /s/ David A. Baldwin
PATRICK J. GOODMAN                          DAVID A. BALDWIN


/s/ Marivic Espiritu                       /s/ Jose Jaime Cruz
MARIVIC ESPIRITU                           JOSE JAIME CRUZ


/s/ Linda B. Castillo                      /s/ Jose R. Sandejas
LINDA B. CASTILLO                          JOSE R. SANDEJAS