Loan No. TO122

                         NATIONAL BANK FOR COOPERATIVES
                                CREDIT AGREEMENT


     THIS CREDIT  AGREEMENT  (this  "Agreement")  is made and entered into as of
this 22nd day of June,  1994, by and between the NATIONAL BANK FOR  COOPERATIVES
("CoBank")  and  CHUGACH   ELECTRIC   ASSOCIATION,   INC.,  an  Alaska  electric
cooperative (the "Company").

                                    RECITALS

     WHEREAS,  this  Agreement  is entered  into in  conjunction  with the Third
Supplemental  Indenture ("Third  Supplement") to the Indenture of Trust dated as
of  September  15,  1991 (the " 1991  Trust  Indenture"),  as amended by a First
Supplemental Indenture and a Second Supplemental Indenture thereto (the entirety
of which  shall be  referred  to &-, the  "Original  Indenture"),  and all terms
capitalized  herein which are not otherwise defined shall have the meaning given
in the Third Supplement or the Original Indenture; and

     WHEREAS, from time to time CoBank may make advances in consideration of the
issuance to it of CoBank Bonds, the amount,  interest rate or rates and maturity
of which shall have been agreed upon between the parties;

     NOW,  THEREFORE,  in consideration  of the foregoing,  the parties agree as
follows:
     SECTION  1.  The  Maximum  Amount.  On the  terms  and  conditions  of this
Agreement,  CoBank may fund, by means of one or more  advances,  CoBank Bonds in
the principal amount not to exceed $80,000,000 (the "Maximum Amount") at any one
time outstanding.

     SECTION  2.  Purpose.  The  purpose  of the Loan is for  general  corporate
purposes,  including' but not limited to repaying any unsecured lines of credit,
and the Company agrees to use the proceeds of the Loan for those purposes only.

     SECTION 3.  Availability.  Upon the receipt by CoBank of one or more CoBank
Bonds,  advances will be made available to fund such Bond or Bonds on any day on
which CoBank and the Trustee are open for  business (a "Business  Day") upon the
telephonic or written request of an authorized employee of the Company. Requests
for advances must be received by CoBank no later than 12:00 noon, Mountain time,
on the day the advance is desired. Unless otherwise agreed, all advances will be
made available by wire transfer of immediately  available funds.  Wire transfers
will be made to such account or accounts as the Company may authorize  from time
to time on forms supplied by CoBank.  In making advances on telephonic  request,
CoBank shall be entitled to rely on (and shall incur no liability to the Company
in acting upon) any request made by a person  identifying  himself or herself as
one of the persons authorized by the Company to request advances hereunder.



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     SECTION 4. CoBank  Bonds.  The  Company's  obligation to repay the advances
shall be evidenced by First Mortgage  Bonds,  CoBank Series,  issued pursuant to
the Original Indenture and the Third Supplement thereto.

     SECTION 5.  Capitalization.  The Company  agrees to purchase such equity in
CoBank as CoBank may from time to time require in accordance with its bylaws and
capital  plan;  provided,  however,  that  CoBank may not require the Company to
purchase  equity  in  CoBank in an amount  greater  than 13% of the  portion  of
CoBank's five year average risk adjusted asset base  attributable  to loans made
by CoBank to the  Company.  All such  equity  which the  Company  may now own or
hereafter  acquire or be  allocated  in CoBank  shall be subject to a  statutory
first  lien in favor of CoBank to secure  any  indebtedness  of the  Company  to
CoBank.  In  connection  with the  foregoing,  the Company  hereby  acknowledges
receipt, prior to the execution of this Agreement, of CoBank's bylaws, a written
description  of the terms and  conditions  under  which  the  equity is  issued,
CoBank's  Loan-Based  Capital Plan,  CoBank's most recent annual report,  and if
more recent than CoBank's latest annual report, its latest quarterly report.

     SECTION 6.  Security.  The  Company's  obligations  hereunder and under all
instruments  and  documents  contemplated  hereby  shall be  secured  by a first
priority lien (subject only to exceptions permitted under the Original Indenture
or otherwise approved in writing by CoBank) pursuant to the Original Indenture.

     SECTION 7. Notices.  All notices hereunder shall be in writing and shall be
deemed to be duly given upon delivery, if delivered by "Express Mail," overnight
courier,  messenger  or  other  form of hand  delivery  or sent by  telegram  or
facsimile transmission (with receipt confirmed),  or three days after mailing if
sent by certified or registered mail, to the parties at the following  addresses
(or such other address for a party as shall be specified by like notice):

If to CoBank, as follows:                    If to the Company, as follows:

National Bank for Cooperatives               Chugach Electric Association, Inc.
Post Office Box 5110                         5601 Minnesota Drive
Denver, Colorado 80217                       Post Office Box 196300
                                             Anchorage, AK 99519-6300

Attn:    Western Division                    Attn: Joe Griffith
         Rural Utility Banking Group
         Fax No: (303) 740-4002              Fax No: (907) 562-0027


     SECTION 8. Costs and  Expenses.  To the extent  allowed by law, the Company
agrees to pay to  CoBank,  on  demand,  all  out-of-pocket  costs  and  expenses
incurred by CoBank  (including,  without  limitation,  the  reasonable  fees and
expenses of counsel  retained by CoBank) in connection  with the  enforcement of
CoBank's  rights under CoBank Bonds,  and the Trust  Indenture after an Event of
Default (the "Loan Documents").



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     SECTION 9. Effectiveness and Severability. This Agreement shall continue in
effect until all indebtedness and obligations of the Company hereunder and under
all other Loan Documents shall have been repaid or the Commitment  shall expire,
whichever is later.  Any provision of the Loan Documents  which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof or thereof.

     SECTION 10.  Successors and Assigns.  This Agreement  shall be binding upon
and  inure to the  benefit  of the  Company  and  CoBank  and  their  respective
successors  and assigns,  except that the Company may not assign or transfer its
rights or obligations hereunder without the prior written consent of CoBank.

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
by their duly authorized officers as of the date shown above.

NATIONAL BANK FOR COOPERATIVES               CHUGACH ELECTRIC ASSOCIATION, INC.



By:   /s/ Larry E. Brutlag                   By: /s/ Eugene N. Bjornstad
Title:     SVP                               Title: General Manager


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