EXHIBIT 4.19(c)
                                
          SECOND AMENDED AND RESTATED CREDIT AGREEMENT
                    (PARTNERSHIP GUARANTORS)


          This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated

as  of  October  __,  1998 (this "Second Amendment")  is  by  and

between  SALTON  SEA FUNDING CORPORATION, a Delaware  corporation

("Funding  Corporation"),  as  lender,  and  CALENERGY  OPERATING

CORPORATION, a Delaware corporation (formerly known as  CalEnergy

Operating  Company)  ("CEOC"), VULCAN  POWER  COMPANY,  a  Nevada

corporation   ("VPC"),  CONEJO  ENERGY  COMPANY,   a   California

corporation  ("Conejo"),  NIGUEL  ENERGY  COMPANY,  a  California

corporation  ("Niguel"), SAN FELIPE ENERGY COMPANY, a  California

corporation  ("San  Felipe"),  BN  GEOTHERMAL  INC.,  a  Delaware

corporation  ("BNG"),  DEL  RANCH,  L.P.,  a  California  limited

partnership  ("Del  Ranch"), ELMORE, L.P., a  California  limited

partnership  ("Elmore"),  LEATHERS, L.P.,  a  California  limited

partnership ("Leathers"), VULCAN/BN GEOTHERMAL POWER  COMPANY,  a

Nevada general partnership ("Vulcan"), CALENERGY MINERALS LLC,  a

Delaware limited liability company ("Minerals LLC"), and CE TURBO

LLC,  a  Delaware  limited liability company  ("Turbo  LLC",  and

together  with  CEOC, VPC, Conejo, Niguel, San Felipe,  BNG,  Del

Ranch,   Elmore,   Leathers,  Vulcan,  and  Minerals   LLC,   the

"Partnership Guarantors") as borrowers.

                      W I T N E S S E T H:

            WHEREAS,   Funding  Corporation  is   a   corporation

established  for  the  sole  purpose  of  making  loans  to   the

Guarantors  of  proceeds from the issuance  of  notes  and  bonds

(collectively,  the "Securities") in its individual  capacity  as

principal  and  as  agent  acting on  behalf  of  the  Guarantors

pursuant  to  the  Trust Indenture, dated as of  July  21,  1995,

between  Funding Corporation and Chase Manhattan Bank  and  Trust

Company,  National  Association, a national  banking  association

organized  under  the  laws of the United  States,  successor  in

interest  to  Chemical  Trust Company of California,  as  trustee

("Trustee"), as the same may be amended, modified or supplemented

(as so amended, modified or supplemented, including, pursuant  to

that certain First Supplemental Indenture dated as of October 18,

1995, that certain Second Supplemental Indenture dated as of June

20,  1996, that certain Third Supplemental Indenture dated as  of

July  29,  1996,  and that certain Fourth Supplemental  Indenture

dated as of even date herewith, the "Indenture"); and

           WHEREAS,  the principal and interest payments  on  the

Securities will be serviced by repayment of loans made by Funding

Corporation  to the Guarantors and guaranteed by the  Guarantors,

subject to the conditions set forth in the Indenture; and

           WHEREAS,  on  July  21, 1995 the  Funding  Corporation

issued  and sold Securities in the aggregate principal amount  of

$475,000,000 (the "Initial Securities"); and

           WHEREAS,  Funding Corporation used a  portion  of  the

proceeds from the sale of the Initial Securities to make  a  loan

to  CEOC  and  VPC  pursuant  to that  certain  Credit  Agreement

(Partnership  Guarantors)  dated as  of  July  21,  1995  between

Funding  Corporation,  CEOC  and VPC  (the  "Initial  Partnership

Credit  Agreement") in the aggregate amount of  $75,000,000  (the

"Initial Partnership Project Loan") portions of which were  used:

(a)  to  repay  certain  non-recourse  indebtedness  incurred  by

CalEnergy  in  connection  with the acquisition  of  Magma  Power

Company;  and  (b)  to pay certain costs of issuing  the  Initial

Securities; and

           WHEREAS,  on  June  20, 1996 the  Funding  Corporation

issued  and sold Securities in the aggregate principal amount  of

$135,000,000 (the "Supplemental Securities"); and

           WHEREAS,  Funding Corporation used a  portion  of  the

proceeds from the sale of the Supplemental Securities to  make  a

loan  to  the Initial Partnership Guarantors and Conejo,  Niguel,

San   Felipe,  BNG,  Del  Ranch,  Elmore,  Leathers  and   Vulcan

(collectively, the "Supplemental Partnership Guarantors") in  the

aggregate  amount of $135,000,000 (the "Supplemental  Partnership

Project  Loan"),  portions of which were used for  the  following

purposes: (a) approximately $96,000,000 to refinance all existing

project-level indebtedness of the Partnership Project  Companies,

(b)   approximately   $15,000,000   to   fund   certain   capital

improvements  to  the Partnership Projects  and  the  Salton  Sea

Projects, and (c) approximately $23,000,000 to fund a portion  of

the  purchase  price  for  the  acquisition  by  certain  of  the

Partnership  Guarantors  of  the 50%  interest  in  each  of  the

Partnership Projects previously owned by a third party; and

            WHEREAS,  in  connection  with  the  making  of   the

Supplemental  Partnership Project Loan, each Initial  Partnership

Guarantor  and each Supplemental Partnership Guarantor agreed  to

become  jointly  and  severally liable with each  other  for  the

entire amount of the Initial Partnership Project Loan; and

           WHEREAS, in order to evidence and implement the making

of  the Supplemental Partnership Project Loan and the addition of

the  Supplemental Partnership Guarantors as borrowers  under  the

Initial  Partnership  Project  Loan,  Funding  Corporation,   the

Initial  Partnership Guarantors and the Supplemental  Partnership

Guarantors entered into that certain Amended and Restated  Credit

Agreement (Partnership Guarantors) dated as of June 20, 1996 (the

"Supplemental Partnership Credit Agreement") to amend and restate

the Initial Partnership Credit Agreement (the Initial Partnership

Credit Agreement, as so amended, the "Existing Partnership Credit

Agreement"); and

          WHEREAS, Funding Corporation has simultaneously with

the execution and delivery of this Second Amendment issued and

sold Securities in the aggregate principal amount of $285,000,000

(the "New Securities"); and

           WHEREAS,   Funding  Corporation  intends  to  use  the

proceeds  from  the  New  Securities  to  make  a  loan  to   the

Partnership  Guarantors  in  the  amount  of  $201,728,000   (the

"Additional  Partnership Project Loan,"  and  together  with  the

Initial Partnership Project Loan and the Supplemental Partnership

Project Loan, the "Partnership Project Loan"), portions of  which

will  be  used  for  the  following purposes:  (a)  approximately

$140,520,000  to  finance the construction  of  an  approximately

30,000  metric  tonnes/year  zinc recovery  facility  (the  "Zinc

Recovery  Project") which will extract and process metallic  zinc

from the geothermal brine used by the Salton Sea Projects and the

Partnership  Projects, to be owned and operated by Minerals  LLC,

(b)  approximately $36,617,000 to finance an upgrade of the brine

processing  facilities at the Vulcan Project and  the  Del  Ranch

Project   (the   "Region   2  Brine  Facilities   Construction"),

(c)  approximately  $7,964,000 to finance the construction  of  a

turbo expander (the "TurboExpander Project") to be owned by Turbo

LLC  which  will  produce approximately 10MW of electricity  from

geothermal  energy,  and (d) approximately  $16,627,000  to  fund

certain capital improvements to the Partnership Projects and  the

Salton Sea Projects.

            WHEREAS,  in  connection  with  the  making  of   the

Additional  Partnership Project Loan, each Partnership  Guarantor

(including  Minerals  LLC and Turbo LLC)  has  agreed  to  become

jointly   and   severally  liable  with  each  other  Partnership

Guarantor  for  the  entire  amount of  the  Initial  Partnership

Project Loan and the Supplemental Partnership Project Loan; and

           WHEREAS, in order to evidence and implement the making

of  the  Additional Partnership Project Loan and the addition  of

Minerals  LLC  and  Turbo  LLC  as borrowers  under  the  Initial

Partnership Project Loan and the Supplemental Partnership Project

Loan,  the  parties hereto have agreed to amend and  restate  the

Existing Partnership Credit Agreement as set forth herein.

           NOW,  THEREFORE,  for  and  in  consideration  of  the

premises  and  the  mutual covenants hereinafter  contained,  the

parties  hereto formally covenant, agree and bind  themselves  as

follows:

ARTICLE 1.
DEFINITIONS AND AMENDMENT
                   Section 1.1.   Definitions.
   Capitalized terms used and not otherwise defined herein  shall
have the meanings ascribed thereto in Exhibit A to the Indenture,
which Exhibit A is hereby incorporated by this reference.
        Section 1.2.   Second Amendment and Restatement.
   From  and  after  the date hereof, the terms of  the  Existing
Partnership  Credit Agreement shall be amended to read  in  their
entirety  as set forth in this Second Amendment and the terms  of
this  Second  Amendment shall govern and control the  rights  and
obligations of the parties in and with respect to the Partnership
Project  Loan, notwithstanding any conflict between the terms  of
this  Second  Amendment and the terms of the Existing Partnership
Credit  Agreement.   As  amended  and  restated  by  this  Second
Amendment,  the  Existing Partnership Credit Agreement  shall  be
referred to herein as the "Agreement."
ARTICLE 2.
DESCRIPTION OF THE LOAN
  Section 2.1.   Acknowledgments of the Partnership Guarantors;
                    Partnership Project Loan.
  The Partnership Guarantors hereby acknowledge and agree that:
               (a)  The Partnership Guarantors are indebted to

Funding Corporation for all principal, interest, and other

amounts currently outstanding on the Initial Partnership Project

Loan and the Supplemental Partnership Project Loan;

               (b)  Pursuant to this Agreement, Funding

Corporation does hereby lend to the Partnership Guarantors and

the Partnership Guarantors do hereby borrow from Funding

Corporation the principal amount of the Additional Partnership

Project Loan;

               (c)  The Partnership Project Loan shall be

evidenced by a promissory note or notes issued by the Partnership

Guarantors in favor of Funding Corporation (collectively, the

"Partnership Project Note"); and

               (d)  If proceeds from the issuance of any

Additional Securities are loaned to the Partnership Guarantors,

the outstanding principal balance on the Partnership Project Loan

shall be increased by the amount of such proceeds and the

Partnership Project Loan shall include the loan to the

Partnership Guarantors of such proceeds, as evidenced by a

promissory note issued by the Partnership Guarantors.

             Section 2.2.   Term of This Agreement.
   This Agreement shall remain in full force and effect from  the
date  hereof until payment in full of all amounts due under  this
Agreement.
                    Section 2.3.   Interest.
   Interest hereunder shall be paid in arrears on each  May  30th
and  November  30th  commencing on November 30,  1998  until  all
principal hereunder is paid in full.  Interest shall be  computed
on  the basis of a three hundred sixty (360) day year, consisting
of  twelve (12) thirty (30) day months and at the applicable rate
per  annum  specified on Schedule 1 hereto.  Principal  shall  be
payable  hereunder  in an amount and on the dates  set  forth  on
Schedule 1 hereto.
                    Section 2.4.   Repayment.
   The Partnership Guarantors shall repay the Partnership Project
Loan in installments to Funding Corporation on the dates, at  the
times  and in the amounts set forth on Schedule 1 attached hereto
(as  the  same  may be modified pursuant to Section  8.3  of  the
Indenture).
                   Section 2.5.   Prepayment.
                                
               (a)  Optional Prepayment

 .    The Partnership Guarantors shall have the optional right  to
prepay  the Partnership Project Loan in such amounts and at  such
times as may be appropriate to permit Funding Corporation to  (i)
redeem   the  Securities  pursuant  to  the  optional  redemption
provisions set forth in Section 3.1 of the Indenture and Sections
2(i)  and 2(j) of the Fourth Supplemental Indenture, dated as  of
even date herewith (the "Fourth Supplemental Indenture"), between
the  Funding  Corporation and the Trustee, or  (ii)  defease  the
Securities  pursuant  to the optional defeasance  provisions  set
forth in Section 10.1 of the Indenture.
               (b)  Mandatory Prepayment.  The Partnership

Guarantors shall be required to prepay principal, and to pay

accrued interest on such prepaid principal, on the Partnership

Project Loan in such amounts and at such times as may be required

(i) to permit the Funding Corporation to redeem the Securities

pursuant to the mandatory redemption provisions set forth in

Section 3.3 of the Indenture and (ii) to permit the Funding

Corporation to redeem the New Securities pursuant to the

mandatory redemption provisions set forth in Sections 2(l) and

2(m) of the Fourth Supplemental Indenture, in each case as such

provisions apply specifically to the Partnership Guarantors, the

Partnership Projects and/or the Partnership Project Documents.

     Section 2.6.  Obligations of the Partnership Guarantors
                    Hereunder Unconditional.
   The  obligations  of the Partnership Guarantors  to  make  the
payments  required  in  Sections 2.3  and  2.4  hereof  shall  be
absolute and unconditional; and the Partnership Guarantors  shall
not  discontinue such payments for any cause, including,  without
limiting   the  generality  of  the  foregoing,   any   acts   or
circumstances  that  may  constitute  failure  of  consideration,
eviction  or constructive eviction from the Partnership Projects,
destruction  of or damage to the Partnership Projects,  including
commercial frustration of purpose, or change in the tax or  other
laws  or  administrative rulings of or administrative actions  by
the  United States of America or the State of California  or  any
political subdivision of either.  The Partnership Guarantors may,
however, at their own cost and expense and in their own  name  or
in  the  name  of Funding Corporation, prosecute  or  defend  any
action  or  proceeding or take any other action  involving  third
persons   which   the  Partnership  Guarantors  deem   reasonably
necessary in order to secure or protect their rights with respect
to the Partnership Projects.
            Section 2.7.   General Terms of Payment.
               (a)  All sums payable to Funding Corporation

hereunder shall be deemed paid to the extent the Depositary Agent

shall apply amounts held by the Depositary Agent in accordance

with the Depositary Agreement to the payment of principal of or

interest on the Partnership Project Loan and the Securities in

accordance with the Depositary Agreement.

               (b)  Whenever any payment hereunder shall be due,

or any calculation shall be made, on a day which is not a

Business Day, the date for payment or calculation, as the case

may be, shall be extended to the next succeeding Business Day,

and any interest on any payment shall be payable for such

extended time at the specified rate.

               (c)  If no due date is specified for the payment

of any amount payable by the Partnership Guarantors hereunder,

such amount shall be due and payable not later than ten (10) days

after receipt of written demand by Funding Corporation to the

Partnership Guarantors for payment thereof.

                    Section 2.8.   Security.
   The  obligations of the Partnership Guarantors hereunder shall
be secured as set forth herein and under the Security Documents.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
           The  Partnership Guarantors represent and  warrant  to

Funding Corporation as follows:

Section 3.1.   Organization, Power and Status of the Partnership
                           Guarantors.
               (a)  CEOC and BNG are corporations duly organized,

validly existing and in good standing under the laws of the State

of Delaware, (b) VPC is a corporation duly organized, validly

existing and in good standing under the laws of the State of

Nevada, (c) Conejo, Niguel and San Felipe are corporations duly

organized, validly existing and in good standing under the laws

of the State of California, (d) Del Ranch, Elmore and Leathers

are limited partnerships, duly organized, validly existing and in

good standing under the laws of the State of California, (e)

Vulcan is a general partnership, duly organized, validly existing

and in good standing under the laws of the State of Nevada, (f)

Minerals LLC and Turbo LLC are limited liability companies, duly

organized, validly existing and in good standing under the laws

of the State of Delaware, and (g) each of the Partnership

Guarantors is duly qualified in the State of California and is

duly authorized to do business in each other jurisdiction where

the nature of its activities makes such qualification necessary.

Each of the Partnership Guarantors has all requisite power and

authority to carry on its business as now being conducted and as

proposed to be conducted.

   Section 3.2.   Authorization; Enforceability; Execution and
                            Delivery.
               (a)  Each of the Partnership Guarantors has all

necessary power and authority to execute, deliver and perform its

obligations under this Agreement, the Partnership Project Note

and each other Financing Document to which it is a party.

               (b)  All action on the part of each of the

Partnership Guarantors that is required for the authorization,

execution, delivery and performance of this Agreement, the

Partnership Project Note and each other Financing Document to

which such Partnership Guarantor is a party have been duly and

effectively taken; and the execution, delivery and performance of

this Agreement, the Partnership Project Note and each such other

Financing Document to which any of the Partnership Guarantors is

a party does not require the approval or consent of any holder or

trustee of any Debt or other material obligations of the

Partnership Guarantors which has not been obtained.

               (c)  This Agreement, the Partnership Project Note

and each other Financing Document to which any of the Partnership

Guarantors is a party have been duly authorized, executed and

delivered by the Partnership Guarantors.  Each of this Agreement,

the Partnership Project Note and each other Financing Document to

which any of the Partnership Guarantors is a party constitutes a

legal, valid and binding obligation of such Partnership Guarantor

enforceable against such Partnership Guarantor in accordance with

the terms hereof and thereof, except as the enforceability

thereof may be limited by bankruptcy, insolvency, or similar laws

affecting creditors' rights generally, and subject to general

principles of equity.

  Section 3.3.   No Conflicts; Laws and Contracts; No Default;
                 Representations and Warranties.
                                
               (a)  Neither the execution, delivery and

performance of this Agreement, the Partnership Project Note or

any other Financing Document to which any of the Partnership

Guarantors is a party, nor the consummation of any of the

transactions contemplated hereby or thereby (i) contravenes any

provision of Law applicable to any of the Partnership Guarantors

or any of the Collateral, except any contravention which,

individually or in the aggregate, could not reasonably be

expected to result in a Material Adverse Effect, (ii) conflicts

or is inconsistent with or constitutes a default under the

articles of incorporation, by-laws, certificate of formation,

limited liability company operating agreement, or partnership

agreement of any of the Partnership Guarantors, or of any other

terms of any Partnership Project Document, Financing Document or

any other agreement or instrument to which the Partnership

Guarantors may be subject except any such conflict,

inconsistency, default or violation which, individually or in the

aggregate, could not reasonably be expected to result in a

Material Adverse Effect or (iii) results in the creation or

imposition of (or the obligation to create or impose) any Liens

(other than Permitted Liens) on the Partnership Collateral.

               (b)  Each of the Partnership Guarantors is in

compliance with any and all Laws applicable to it, except any

such noncompliance which, individually or in the aggregate, could

not reasonably be expected to result in a Material Adverse

Effect.

                   Section 3.4.   Litigation.
    There  are  no  claims,  actions,  suits,  investigations  or
proceedings  at  law  or in equity (including  any  Environmental
Claims)  or by or before any arbitrator or Governmental Authority
now  pending against any of the Partnership Guarantors or, to the
best  knowledge  of any of the Partnership Guarantors  after  due
inquiry, threatened against any of the Partnership Guarantors  or
any  property  or  other  assets or  rights  of  the  Partnership
Guarantors  that  could reasonably be expected  to  result  in  a
Material Adverse Effect.
              Section 3.5.   Environmental Matters.
   To  the best knowledge of the Partnership Guarantors after due
inquiry,  the  Partnership Projects are in  compliance  with  all
existing  applicable Environmental Laws and there are  no  facts,
circumstances or conditions under any existing Environmental  Law
which  could,  individually or in the aggregate  with  all  other
circumstances or conditions, reasonably be expected to result  in
a Material Adverse Effect.
             Section 3.6.   Employee Benefit Plans.
  Each Plan (including without limitation each Plan of a Commonly
Controlled  Entity)  as to which the Partnership  Guarantors  may
have  any liability complies with all applicable requirements  of
Law and regulations, and (i) no "reportable event" (as defined in
Section  4043  of ERISA (other than an event not subject  to  the
notice requirement of the PBGC)) has occurred with respect to any
such   Plan,  (ii)  there  has  been  no  withdrawal   from   any
Multiemployer Plan or steps taken to do so that have resulted  or
could reasonably be expected to result in material liability  for
the Partnership Guarantors, (iii) no Plan has been terminated  or
has commenced to be terminated which could reasonably be expected
to  result  in material liability for the Partnership Guarantors,
(iv)  no  contribution failure has occurred with respect  to  any
Plan  sufficient to give rise to a lien under Section  302(f)  of
ERISA  or Section 412 of the Code and (v) no condition exists  or
event  or transaction has occurred with respect to any Plan that,
in  each  case,  could  reasonably be expected  to  result  in  a
Material Adverse Effect.
     Section 3.7.   Business of the Partnership Guarantors.
   Except as otherwise permitted in this Agreement and the  other
Financing  Documents,  none  of  the  Partnership  Guarantors  is
engaged  in any business other than the development, acquisition,
construction,  operation  and  financing  of  the  Projects   and
transactions  related thereto or as permitted under  Section  4.7
hereof.
                   Section 3.8.   Valid Title.
  Each of the Partnership Guarantors has valid legal title to all
of its assets.
               Section 3.9.   Security Interests.
   The  security  interests to be transferred  to  and/or  to  be
created  in favor of Funding Corporation hereunder and under  the
Security  Documents  will be, to the extent provided  herein  and
therein, valid and perfected first priority security interests in
and liens on the collateral described therein.
               Section 3.10.  Utility Regulation.
   None of the Partnership Guarantors is subject to regulation by
any  Governmental  Authority under PUHCA  as  a  "public  utility
company"  or  an  "affiliate,"  or  "subsidiary  company"  of   a
"registered holding company" or a company subject to registration
under PUHCA.
               Section 3.11.  Qualifying Facility.
   The Partnership Projects (other than the Zinc Recovery Project
and  the  TurboExpander Project) are Qualifying Facilities.   The
TurboExpander  Project is (a) a Qualifying  Facility  or  (b)  an
Eligible Facility owned by an Exempt Wholesale Generator.
             Section 3.12.  Investment Company Act.
   None  of  the  Partnership Guarantors is,  and  following  the
execution   of  the  Partnership  Project  Note,  will   be,   an
"investment company" or, to its knowledge, an entity "controlled"
by  an  "investment  company" as such terms are  defined  in  the
Investment Company Act of 1940, as amended.
                   Section 3.13.  No Defaults.
   None  of  the Partnership Guarantors is in default  under  any
Project Documents or other material project contract which  could
reasonably  be  expected to result in a Material Adverse  Effect.
To the best of the Partnership Guarantors' knowledge, no material
default  exists  by any other party to the Project  Documents  or
other material project contracts.
             Section 3.14.  Governmental Approvals.
   All  Governmental Approvals which are required to be  obtained
by,  in  the  name  of  or on behalf of any  of  the  Partnership
Guarantors  or,  to  the  knowledge of  any  of  the  Partnership
Guarantors,  any  other  party  to  any  Financing  Document,  in
connection with (a) the issuance of the Partnership Project  Note
and   (b)  the  execution,  delivery  and  performance   by   the
Partnership  Guarantors  and any other  party  to  any  Financing
Document  of the Financing Documents, have been duly obtained  or
made, are validly issued and are in full force and effect.
                  Section 3.15.  Margin Stock.
   None  of  the Partnership Guarantors is engaged,  directly  or
indirectly,  principally, or as one of its important  activities,
in  the business of extending, or arranging for the extension of,
credit  for  the  purposes of purchasing or carrying  any  margin
stock, within the meaning of Regulation G, T, U or X of the Board
of  Governors  of the Federal Reserve System.   No  part  of  the
proceeds  of any loan made under this Agreement will be used  for
"purchasing" or "carrying" any "margin stock" as so  defined,  or
for  extending credit to others for the purpose of purchasing  or
carrying margin stock, or for any purpose which would violate, or
cause a violation of, any such regulation.
                      Section 3.16.  Taxes.
  The Partnership Guarantors have filed all federal and state tax
returns,  to  date, required to be filed by applicable  laws  and
have  paid all federal and state taxes due under such tax returns
except to the extent that such taxes are being contested in  good
faith and by appropriate proceedings and adequate reserves, bonds
or other security have been established with respect thereto.
       Section 3.17.  Ownership of Partnership Guarantors.
   As  of  the  date  of this Agreement, (a)  Magma  and  Funding
Corporation are the sole shareholders of CEOC and VPC,  (b)  CEOC
and  Conejo are the sole general partners of Del Ranch, and Magma
and  Conejo are the sole limited partners of Del Ranch, (c)  CEOC
and Niguel are the sole general partners of Elmore, and Magma and
Niguel are the sole limited partners of Elmore, (d) CEOC and  San
Felipe  are the sole general partners of Leathers, and Magma  and
San Felipe are the sole limited partners of Leathers, (e) VPC and
BNG are the sole general partners of Vulcan, (f) CEOC is the sole
shareholder of each of Conejo, Niguel, and San Felipe, (g) VPC is
the  sole  shareholder of BNG, (h) SSMC and Magma  are  the  sole
members  of  Minerals LLC, and (i) CESS and Magma  are  the  sole
members of Turbo LLC.
                   Section 3.18.  Disclosure.
   Each  of the Series D and E Preliminary Offering Circular  and
the  Series  D and E Final Offering Circular as of its  date  did
not,  and the Series D and E Final Offering Circular (as the same
may  have  been amended or supplemented) as of the  date  of  the
issuance  of  the Series D and E Securities did not, contain  any
untrue statement of a material fact or omit to state any material
fact  necessary to make the statements therein, in the  light  of
the  circumstances  under which they were made,  not  misleading.
Each of the Series F Preliminary Offering Circular and the Series
F  Final Offering Circular as of its date did not, and the Series
F  Final Offering Circular (as the same may have been amended  or
supplemented) as of the date of the issuance and delivery of  the
New  Securities  will  not, contain any  untrue  statement  of  a
material fact with respect to the Partnership Guarantors or  omit
to  state any material fact necessary to make the statements made
therein with respect to the Partnership Guarantors, in the  light
of the circumstances under which they were made, not misleading.
ARTICLE 4.
COVENANTS AND AGREEMENTS OF THE PARTNERSHIP  GUARANTORS
           Each Partnership Guarantor hereby covenants and agrees

that from the date of this Agreement, it shall faithfully observe

and  fulfill, and shall cause to be fulfilled and observed,  each

of the following covenants that is applicable to such Partnership

Guarantor  until  all amounts due under the  Securities  and  the

Indenture shall have been repaid.

             Section 4.1.   Reporting Requirements.
   Each  of  the Partnership Guarantors shall provide to  Funding
Corporation  (a) unaudited quarterly reports for the first  three
quarters  of  each  fiscal  year containing  condensed  financial
information  within  forty-five (45) days  of  the  end  of  each
quarter and audited annual reports within ninety (90) days of the
end of each fiscal year, (b) all other information in respect  of
the  Partnership Guarantors requested by Funding  Corporation  to
enable  Funding  Corporation to meet its  obligations  under  the
Indenture, (c) copies of material notices delivered in connection
with any Partnership Project Documents, and (d) written notice of
any  Credit  Agreement  Default or Event of  Default  under  this
Agreement  or  any  event or condition that could  reasonably  be
expected to result in a Material Adverse Effect.
                 Section 4.2.   Sale of Assets.
   Except  as  contemplated by the Partnership Project Documents,
none  of the Partnership Guarantors shall sell, lease (as lessor)
or  transfer  (as transferor) any property or assets material  to
the  operation of the Partnership Projects except in the ordinary
course  of business to the extent that such property is no longer
useful  or  necessary  in connection with the  operation  of  the
Partnership  Projects; provided, however,  without  limiting  the
generality  of  the  foregoing, that the  Partnership  Guarantors
shall  be  allowed to lend useful spare parts to the  Salton  Sea
Guarantors  for  use  in  the Salton Sea  Projects  or  to  other
Permitted Facilities financed with Permitted Debt for use in such
Permitted Facilities.
          Section 4.3.   Sale of Partnership Interests.
   Neither  CEOC  nor VPC shall sell, transfer or convey  any  of
their partnership interests in the Partnership Project Companies.
                    Section 4.4.   Insurance.
   Except  as set forth below, the Partnership Project  Companies
shall  maintain or cause to be maintained (a) on the date  hereof
the  insurance in effect with respect to the Partnership Projects
on  the date hereof and (b) insurance as is generally carried  by
companies  engaged  in  similar  businesses  and  owning  similar
properties  in the same general areas and financed in  a  similar
manner.    The   Partnership  Project  Companies  have   business
interruption insurance, casualty insurance, including  flood  and
earthquake  coverage, and primary and excess liability insurance,
as   well  as  customary  worker's  compensation  and  automobile
insurance.  The Partnership Project Companies shall not reduce or
cancel such insurance coverages (or permit any such coverages  to
be  reduced  or canceled) if the Insurance Consultant  determines
that  (i)  such reduction or cancellation would not be reasonable
under  the circumstances and (ii) the insurance coverages  sought
to   be   reduced  or  canceled  are  available  on  commercially
reasonable  terms or that another level of coverage greater  than
that  proposed by the Partnership Project Companies is  available
on commercially reasonable terms (in which case such coverage may
be reduced to such greater available levels).
                    Section 4.5.   QF Status.
   The  Partnership Project Companies shall operate and  maintain
the  Partnership  Projects (other than the Zinc Recovery  Project
and  the  TurboExpander Project) as Qualifying Facilities  unless
the  failure  to  do  so operate and maintain  such  Projects  as
Qualifying Facilities would not cause or result in (a)  a  breach
of  the  power  purchase agreements that the Partnership  Project
Companies  are party to or (b) an adverse effect on the  revenues
to  be  received  under  such  power  purchase  agreements.   The
Partnership   Guarantors   shall   operate   and   maintain   the
TurboExpander Project as a Qualifying Facility or as an  Eligible
Facility owned by one or more Exempt Wholesale Generators  unless
the  failure to so maintain or operate the TurboExpander  Project
could  not  reasonably  be expected to have  a  Material  Adverse
Effect.
          Section 4.6.   Governmental Approvals; Title.
   Each  of  the  Partnership Guarantors shall at all  times  (a)
obtain  and  maintain  in  full force  and  effect  all  material
Governmental Approvals and other consents and approvals  required
at  any time in connection with its business and (b) preserve and
maintain  good  and  valid  title to its  properties  and  assets
(subject to no liens other than Permitted Liens), except in  each
case  where the failure to do so in clause (a) or (b)  could  not
reasonably be expected to have a Material Adverse Effect.
               Section 4.7.   Nature of Business.
  None of the Partnership Guarantors shall engage in any business
other  than  their existing businesses and, in the  case  of  the
Partnership  Project  Companies,  the  development,  acquisition,
construction, operation and financing of the Partnership Projects
as  contemplated by the Transaction Documents; provided, however,
that  (a)  CEOC  shall be permitted to enter into  agreements  to
provide   operating  and  maintenance  services,   administrative
services,  technical services or related services  for  Permitted
Facilities  owned in whole or in part by CalEnergy  (directly  or
indirectly)  and located in Imperial County, California  and  (b)
the Partnership Guarantors may engage in Permitted Facilities  at
the  SSKGRA  (i)(A) for which Permitted Debt may be incurred  and
(B)  if  the  Independent  Engineer  certifies  that  such  other
projects  could  not reasonably be expected to  have  an  adverse
impact on the geothermal resources for the Salton Sea Projects or
the  Partnership Projects or (ii) if Funding Corporation and  the
Guarantors  take  such action as the Rating Agencies  require  to
confirm the Investment Grade Rating of the Securities.
              Section 4.8.   Compliance With Laws.
   Each  of  the  Partnership Guarantors shall  comply  with  all
applicable laws, except where non-compliance could not reasonably
be expected to have a Material Adverse Effect.
       Section 4.9.   Prohibition on Fundamental Changes.
   None  of  the  Partnership Guarantors  shall  enter  into  any
transaction  of  merger  or consolidation,  change  its  form  of
organization  or its business, liquidate or dissolve  itself  (or
suffer  any liquidation or dissolution); provided, however,  that
any  Guarantor  shall be able to merge with  or  into  any  other
Guarantor  so  long as no Default or Event of Default  exists  or
shall occur as a result thereof and in the event that any of  the
Partnership  Guarantors  is  not the  surviving  entity  (i)  the
surviving  entity shall, simultaneously with such merger,  assume
all  the  obligations  of such Partnership Guarantor  under  this
Agreement  and under the other Financing Documents to which  such
Partnership Guarantor was a party, (ii) Funding Corporation shall
have  received appropriate amendments to this Agreement  and  the
other Financing Documents to which such Partnership Guarantor was
a  party,  all  financing statements necessary  to  preserve  its
valid,  perfected,  first  priority  security  interest  in   the
Partnership  Collateral,  each in form and  substance  reasonably
satisfactory to Funding Corporation, (iii) after giving effect to
such  merger,  the merger shall not result in a Material  Adverse
Effect  and  (iv) after giving effect to such merger,  no  Credit
Agreement  Event  of  Default  or Event  of  Default  shall  have
occurred  or  be continuing.  None of the Partnership  Guarantors
shall  purchase or otherwise acquire all or substantially all  of
the  assets  of  any  other Person, except for  the  purchase  or
acquisition  by  the  Partnership Guarantors of  the  partnership
interests  or  assets of the Partnership Projects  not  currently
owned by the Partnership Guarantors; provided, however, that  the
Partnership Guarantors may engage in Permitted Facilities at  the
SSKGRA (a) for which Permitted Debt may be incurred or (b) if the
Independent Engineer certifies that such other projects could not
reasonably  be  expected  to  have  an  adverse  impact  on   the
geothermal  resources  for  the  Salton  Sea  Projects   or   the
Partnership  Projects  or  (c)  if Funding  Corporation  and  the
Guarantors  take  such action as the Rating Agencies  require  to
confirm the Investment Grade Rating of the Securities.
                  Section 4.10.  Revenue Fund.
   Each  of the Partnership Guarantors shall take all actions  as
may  be necessary to cause revenues of the Partnership Guarantors
to  be deposited in the Revenue Fund, the Zinc Construction  Fund
or  the Region 2/Turbo Construction Fund, as applicable, in  each
case in accordance with the terms of the Depositary Agreement.
          Section 4.11.  Transactions With Affiliates.
   None  of  the  Partnership Guarantors  shall  enter  into  any
transaction  or  agreement with any Affiliate of the  Partnership
Guarantors  other than (a) as contemplated under the  Transaction
Documents or (b) transactions in the ordinary course of  business
and on terms no less favorable to the Partnership Guarantors than
the  Partnership  Guarantors  would  obtain  in  an  arms  length
transaction  with  a  Person that is  not  an  Affiliate  of  the
Partnership Guarantors.
               Section 4.12.  Restricted Payments.
   The  Partnership  Guarantors shall  not  make  any  Restricted
Payments  except (a) as permitted under the Depositary  Agreement
or  as  contemplated in the Offering Circular  to  occur  on  the
Closing  Date  and  (b) in respect of Operating  and  Maintenance
Costs.
   Section 4.13.  Exercise of Rights Under Partnership Project
                           Documents.
   None of the Partnership Guarantors shall exercise, or fail  to
exercise, their rights under the partnership agreements  of  each
of the Partnership Project Companies (other than Minerals LLC and
Turbo  LLC)  or  any of the Partnership Project  Documents  in  a
manner which could reasonably be expected to result in a Material
Adverse Effect.
             Section 4.14.  Amendments to Contracts.
   Neither CEOC nor VPC shall terminate, amend, replace or modify
(other  than immaterial amendments or modifications as  certified
by the Partnership Gurantors) the partnership agreement of any of
the  Partnership  Project  Companies or the  Partnership  Project
Documents  to  which  it  is  a party  unless  such  termination,
amendment,  replacement or modification (a) could not  reasonably
be  expected to have a Material Adverse Effect or (b) is required
under  applicable  law  or  to maintain the  Qualifying  Facility
status  of  a  Project.   In addition, none  of  the  Partnership
Guarantors shall terminate, amend, replace or modify (other  than
immaterial  amendments  or  modifications  as  certified  by  the
Partnership Guarantors) any of the Partnership Project  Documents
to which it is a party (other than a Permitted Power Contract Buy-
Out) unless (i)(A) such Partnership Guarantor certifies that such
termination,  amendment, replacement or  modification  could  not
reasonably be expected to have a Material Adverse Effect and  (B)
in  the case of any amendment, termination or modification of any
Power  Purchase Agreement which affects the revenues  derived  by
any  of  the  Partnership  Guarantors, the  Independent  Engineer
certifies that such amendment, termination or modification  could
not reasonably be expected to have a Material Adverse Effect, (b)
the  Partnership  Guarantors provide a  letter  from  the  Rating
Agencies   confirming   that  such  amendment,   termination   or
modification shall not result in a Rating Downgrade, or (c)  such
amendment,   termination  or  modification  is   required   under
applicable law or to maintain the Qualifying Facility status of a
Project.
            Section 4.15.  Limitations on Debt/Liens.
   The Partnership Guarantors shall not create or incur or suffer
to   exist   any  Debt  except  Permitted  Guarantor  Debt.   The
Partnership Guarantors shall not grant, create, incur  or  suffer
to  exist  any  Liens  upon any of their properties,  except  for
Permitted Liens.
                Section 4.16.  Books and Records.
   The  Partnership  Guarantors shall maintain  their  books  and
records  and  give  the  Funding Corporation,  the  Trustee,  the
Collateral Agent and the Independent Engineer inspection rights.
          Section 4.17.  Additional Project Documents.
   The  Partnership  Guarantors shall perform and  observe  their
respective covenants and obligations under all of the Partnership
Project  Documents  in  all material respects  except  where  the
failure to do so could not reasonably be expected to result in  a
Material Adverse Effect.  The Partnership Project Companies shall
not  enter into any Additional Project Document if entering  into
such  document  could  reasonably be  expected  to  result  in  a
Material Adverse Effect.
            Section 4.18.  Maintenance of Existence.
   The  Partnership  Guarantors shall at all times  preserve  and
maintain in full force and effect (a) their existence as  limited
partnerships,  limited  liability companies,  corporations  or  a
general  partnership, as applicable, in good standing  under  the
laws  of  the  State  of  California,  Nevada  or  Delaware,   as
applicable,  (b)  their  qualification to  do  business  in  each
jurisdiction  in which the character of the properties  owned  or
leased  by them or in which the transaction of their business  as
conducted  or  proposed to be conducted makes such  qualification
necessary,  and  (c) all of their powers, rights, privileges  and
franchises which are necessary for the ownership and operation of
their respective businesses.
                      Section 4.19.  Taxes.
   The  Partnership Guarantors shall pay and discharge all taxes,
assessments and governmental charges upon them, their income  and
their  properties  prior  to  the date  on  which  penalties  are
attached  thereto, unless and to the extent only  that  (a)  such
taxes, assessments and governmental charges shall be contested in
good  faith  and  by appropriate proceedings,  and  (b)  adequate
reserves,  bonds or other security are established  with  respect
thereto.
  Section 4.20.  Additional Documents; Filings and Recordings.
   The  Partnership  Guarantors shall  execute  and  deliver,  as
requested by Funding Corporation, such other documents  as  shall
reasonably  be  necessary or advisable  in  order  to  effect  or
protect the rights and remedies of Funding Corporation granted or
provided  for by this Agreement or the other Financing  Documents
to  which  the Partnership Guarantors are party and to consummate
the   transactions   contemplated   therein.    The   Partnership
Guarantors  shall,  at  their own expense,  take  all  reasonable
actions (a) that are requested by Funding Corporation or (b) that
an  Authorized Officer of the Partnership Guarantors  has  actual
knowledge are necessary as a legal matter, to establish, maintain
and  perfect  the  first priority security interests  of  Funding
Corporation.   Without limiting the generality of the  foregoing,
the  Partnership Guarantors shall execute or cause to be executed
and  shall  file or cause to be filed such Financing  Statements,
continuation statements, and fixture filings and such  mortgages,
or  deeds of trust in all places necessary or advisable  (in  the
opinion   of  counsel  for  Funding  Corporation)  to  establish,
maintain and perfect such security interests.
 Section 4.21.  Information and Access to Independent Engineer.
   The  Partnership  Guarantors  shall  provide  the  Independent
Engineer  with  information regarding the Zinc Recovery  Project,
the  Region 2 Brine Facilities Construction and the TurboExpander
Project   which  is  reasonably  requested  by  the   Independent
Engineer.   The Partnership Project Companies shall  provide  the
Independent  Engineer with access to the Zinc  Recovery  Project,
the  Region 2 Brine Facilities Construction and the TurboExpander
Project as reasonably requested by the Independent Engineer.
ARTICLE 5.
DEFAULT AND REMEDIES
                Section 5.1.   Events of Default.
  Each of the following events and occurrences shall constitute a
Credit Agreement Event of Default under this Agreement:
               (a)  the failure by the Partnership Guarantors to

pay or cause to be paid any principal of, premium, if any, or

interest, fees or any other obligations on the Partnership

Project Note for fifteen (15) or more days after the same becomes

due and payable, whether by scheduled maturity or required

prepayment or by acceleration or otherwise, after application by

the Trustee, in accordance with the provisions of the Indenture,

of any amounts in Funding Corporation's account in the Debt

Service Reserve Fund (as defined in the Depositary Agreement) and

amounts otherwise advanced by other Guarantors for the benefit of

the Partnership Guarantors.

               (b)  any representation or warranty made by the

Partnership Guarantors under this Agreement shall prove to have

been untrue or misleading in any material respect as of the time

made, confirmed or furnished and the fact, event or circumstance

that gave rise to such inaccuracy could reasonably be expected to

result in a Material Adverse Effect and such fact, event or

circumstance shall continue to be uncured for thirty (30) or more

days from the date an Authorized Officer of the Partnership

Guarantors has actual knowledge thereof; provided, however, that

if the Partnership Guarantors commence efforts to cure such fact,

event or circumstance within such thirty (30) day period, the

Partnership Guarantors may continue to effect such cure and such

misrepresentation shall not be deemed a Credit Agreement Event of

Default for an additional sixty (60) days so long as the

Partnership Guarantors are diligently pursuing such cure;

               (c)  the failure by any of the Partnership

Guarantors to perform or observe any covenant contained in

Sections 4.2, 4.4, 4.7, 4.9, 4.12, 4.13, 4.14, 4.16, or 4.19

hereof, if any, and such failure shall continue uncured for

thirty (30) or more days after an Authorized Officer of such

Partnership Guarantor obtains actual knowledge of such failure;

               (d)  the failure by any of the Partnership

Guarantors to perform or observe any of the other covenants

contained in this Agreement or in the other Financing Documents

the Partnership Guarantors are party to (other than such failures

described in Sections 5.1(c) above) and such failure shall

continue uncured for sixty (60) or more days after an Authorized

Officer of the Partnership Guarantors has actual knowledge of

such failure; provided, however, that if the Partnership

Guarantors commence efforts to cure such default within such

sixty (60) day period, the Partnership Guarantors may continue to

effect such cure of the default and such default shall not be

deemed a Credit Agreement Event of Default for an additional

thirty (30) days so long as the Partnership Guarantors are

diligently pursuing such cure;

               (e)  any of the Partnership Guarantors:

                         (1)  does not pay its Debts as they

become due or admits in writing its inability to pay its Debts or

makes a general assignment for the benefit of creditors; or

                         (2)  commences any case, proceeding or

other action seeking reorganization, arrangement, adjustment,

liquidation, dissolution or composition of it or its debts under

any applicable liquidation, conservatorship, bankruptcy,

moratorium, arrangement, adjustment, insolvency, reorganization

or similar laws affecting the rights or remedies of creditors

generally, as in effect from time to time (collectively, "Debtor

Relief Law"); or

                         (3)  in any involuntary case, proceeding

or other action commenced against it which seeks to have an order

for relief (injunctive or otherwise) entered against it, as

debtor, or seeks reorganization, arrangement, adjustment,

liquidation, dissolution or composition of it or its Debts under

any Debtor Relief Law, (A) fails to obtain a dismissal of such

case, proceeding or other action within sixty (60) days of its

commencement, or (B) converts the case from one chapter of the

Bankruptcy Reform Act of 1978, as amended, to another chapter, or

(C) is the subject of an order for relief; or

                         (4)  has a trustee, receiver, custodian

or other official appointed for or take possession of all or any

part of its property or has any court take jurisdiction of any of

its property, which action remains undismissed for a period of

sixty (60) days;

               (f)  the entry of one or more final and non-

appealable judgment or judgments for the payment of money in

excess of Ten Million Dollars ($10 Million) (exclusive of

judgment amounts fully covered by insurance or indemnity) against

the Partnership Guarantors, which remain unpaid or unstayed for a

period of ninety (90) or more consecutive days;

               (g)  an event of default under any Permitted

Guarantor Debt of the Partnership Guarantors in excess of Ten

Million Dollars ($10 Million) occurs and such debt becomes due

and payable prior to its stated maturity;

               (h)  the Partnership Guarantors fail to perform

any of their respective payment obligations under the Partnership

Guarantee for fifteen (15) or more days after the same becomes

due and payable;

               (i)  any Governmental Approval required for the

operation of a Project owned by the Partnership Project Companies

is revoked, terminated, withdrawn or ceases to be in full force

and effect if such revocation, termination, withdrawal or

cessation could reasonably be expected to have a Material Adverse

Effect and such revocation, termination, withdrawal or cessation

is not cured for sixty (60) days following the occurrence

thereof;

               (j)  any Partnership Project Document ceases to be

valid and binding and in full force and effect other than as a

result of an amendment, termination or Permitted Power Contract

Buy-Out permitted under this Agreement, and any such event

results in a Material Adverse Effect; provided, however, that no

such event shall be a Credit Agreement Event of Default if within

one hundred eighty (180) days from the occurrence of any such

event, the Partnership Guarantors (1) cause the third party to

resume performance or cure such misrepresentation or (2) enter

into an Additional Project Document in replacement thereof, as

permitted under this Agreement;

               (k)  the failure of any of the Partnership

Guarantors to perform or observe any of its covenants or

obligations contained in any of the Partnership Project Documents

to which it is a party if such failure shall result in the

termination of such Partnership Project Document or otherwise

result in a Material Adverse Effect; provided, however that such

event shall not be a Credit Agreement Event of Default if within

one hundred eighty (180) days from the occurrence of any such

event, the Partnership Guarantors enter into an Additional

Project Document in replacement thereof as permitted under this

Agreement;

               (l)  any of the Partnership Security Documents

ceases to be effective or any Lien granted therein ceases to be a

valid and perfected Lien in favor of the Collateral Agent on the

Collateral described therein with the priority purported to be

created thereby; provided, however, that the Partnership

Guarantors shall have ten (10) days to cure any such impairment

or cessation or to furnish to the Trustee, the Collateral Agent

or the Depositary Agent all documents or instruments required to

cure any such cessation; or

               (m)  an Event of Default under Section 6.1 (c),

(d), (e), (f), (g), (h), (i), (j), (k) or (l) of the Indenture

occurs.

        Section 5.2.   Consequences of Event of Default.
   If  one or more Credit Agreement Events of Default under  this
Agreement have occurred and are continuing, then:
               (a)  in the case of a Credit Agreement Event of

Default under Section 5.1(e) hereof, the entire outstanding

principal amount of the Partnership Project Note, all interest

accrued and unpaid thereon, and all premium and other amounts

payable under the Partnership Project Note and this Agreement, if

any, shall automatically become due and payable, without

presentment, demand, protest or notice of any kind; or

               (b)  in the case of a Credit Agreement Event of

Default under:

           (1)   Sections 5.1(a) or (h) hereof, upon the  written

and  unrescinded direction of the Holders of no less than  thirty

three  and  one-third  percent (33 1/3%) in  aggregate  principal

amount  of the Outstanding Securities, Funding Corporation  shall

declare  the  outstanding  principal amount  of  the  Partnership

Project  Note  to  be  accelerated and due and  payable  and  all

interest  accrued and unpaid thereon, and all premium  and  other

amounts  payable  under this Agreement, if  any  to  be  due  and

payable, and

           (2)   Sections 5.1(b), (c), (d), (f), (g),  (i),  (j),

(k),  (l)  and  (m)  hereof,  upon the  written  and  unrescinded

direction of the Holders of no less than fifty percent  (50%)  in

aggregate principal amount of the Outstanding Securities, Funding

Corporation shall declare the outstanding principal amount of the

Partnership  Project Note to be accelerated and due  and  payable

and  all interest accrued and unpaid thereon, and all premium and

other amounts payable under this Agreement, if any to be due  and

payable.

                 Section 5.3.   Continuing Lien.
                                
               (a)  The liens and security interests granted in

this Agreement, the other Financing Documents to which the

Partnership Guarantors are party and the Security Documents to

which the Partnership Guarantors are party secure all

indebtedness and all obligations of the Partnership Guarantors

owed to Funding Corporation in connection with the Partnership

Project Loan of whatever kind or character, whether now owing,

hereafter arising or hereafter to be performed.

               (b)  Notwithstanding anything to the contrary in

this Agreement, the other Financing Documents to which the

Partnership Guarantors are party or the Security Documents to

which the Partnership Guarantors are party, if at the time the

principal balance of the Securities is fully paid (the "Pay-off

Date"), any other amounts owed by the Partnership Guarantors

hereunder remain to be paid, Funding Corporation shall not be

obligated to release any collateral remaining subject to the

Security Documents, and such collateral shall continue to secure

the payment of such amounts remaining as of the Pay-off Date.

               Section 5.4.   Defense of Actions.
   Upon  the  occurrence of a Credit Agreement Event of  Default,
Funding Corporation may (but shall not be obligated to) commence,
appear in or defend any action or proceeding purporting to affect
the  Partnership  Project Loan, the Partnership Projects  or  the
respective rights and obligations of Funding Corporation and  any
other  person  pursuant to this Agreement,  any  other  Financing
Document  to  which the Partnership Guarantors are party  or  any
Security Document to which the Partnership Guarantors are  party.
Funding  Corporation may (but shall not be obligated to) pay  all
necessary  expenses,  including reasonable  attorneys'  fees  and
expenses,  incurred  in  connection  with  such  proceedings   or
actions,  which expenses the Partnership Guarantors hereby  agree
to repay to Funding Corporation promptly upon demand.
ARTICLE 6.
GENERAL TERMS AND CONDITIONS
                     Section 6.1.   Notices.
   All notices, requests, complaints, demands, communications  or
other  papers  shall be sufficiently given and  shall  be  deemed
given  when delivered or mailed by registered or certified  mail,
postage prepaid, or sent by telegram or telex, addressed  to  the
parties as follows:
If to the Partnership Guarantors:        CalEnergy      Operating
                               Corporation
                               302  South 36th Street, Suite 400-C
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Vulcan Power Company
                               302  South 36th Street, Suite 400-E
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Conejo Energy Company
                               302  South 36th Street, Suite 400-G
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Niguel Energy Company
                               302  South 36th Street, Suite 400-H
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               San Felipe Energy Company
                               302  South 36th Street, Suite 400-I
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               BN Geothermal Inc.
                               302  South 36th Street, Suite 400-J
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Del Ranch, L.P.
                               302  South 36th Street, Suite 400-C
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Elmore, L.P.
                               302  South 36th Street, Suite 400-C
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Leathers, L.P.
                               302  South 36th Street, Suite 400-C
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               Vulcan/BN     Geothermal     Power
                               Company
                               302  South 36th Street, Suite 400-E
                               Omaha, Nebraska 68131
                               Attention: General Counsel

                               CalEnergy Minerals LLC
                               302  South 36th Street, Suite 400-L
                               Omaha, Nebraska 68131
                               Attention: General Counsel
                               
                               CE Turbo LLC
                               302  South 36th Street, Suite 400-M
                               Omaha, Nebraska 68131
                               Attention: General Counsel
                               
If to Funding Corporation:     Salton Sea Funding Corporation
                               302  South 36th Street, Suite 400-A
                               Omaha, Nebraska 68131
                               Attention:     Chief     Financial
                               Officer

If to Moody's:                 Moody's Investors Service
                               99 Church Street
                               New York, New York 10007
                               Attention:   Corporate   Utilities
                               Department

If to S & P:                   Standard & Poor's Corporation
                               25 Broadway
                               New York, New York 10004
                               Attention:    Corporate    Finance
                               Department
                               Electric Utilities Group

The  above parties may, by notice given hereunder, designate  any

further  or  different  addresses to  which  subsequent  notices,

certificates or other communications shall be sent.

             Section 6.2.   Amendments and Waivers.
   This  Agreement  may only be amended by a document  signed  by
Funding Corporation and the Partnership Guarantors.  No waiver of
any   provision  of  this  Agreement  nor  consent   by   Funding
Corporation  to  any  departure  by  the  Partnership  Guarantors
therefrom  shall in any event be effective unless the same  shall
be in writing and signed by Funding Corporation.  Any such waiver
or  consent shall be effective only in the specific instance  and
for the specific purpose for which given.  No failure on the part
of  Funding  Corporation to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof (except  as
provided above) nor shall any single or partial exercise  of  any
right hereunder preclude any other or further exercise thereof or
the exercise of any other right.  This Agreement shall be binding
upon the Partnership Guarantors, its successors and any permitted
assigns.
              Section 6.3.   Election of Remedies.
   The  remedies herein provided are cumulative and not exclusive
of  any remedies provided by law.  Funding Corporation shall have
all of the rights and remedies granted in the Financing Documents
and  available  at law or in equity, and these  same  rights  and
remedies  may be pursued separately, successively or concurrently
against  the Partnership Guarantors, or any collateral under  the
Financing   Documents,   at  the  sole  discretion   of   Funding
Corporation.
                  Section 6.4.   Severability.
    Any   provision  of  this  Agreement  which  is   prohibited,
unenforceable or not authorized in any jurisdiction shall, as  to
such   jurisdiction,  be  ineffective  to  the  extent  of   such
prohibition,   unenforceability  or  non-authorization,   without
invalidating  the  remaining provisions hereof or  affecting  the
validity,  enforceability or legality of such  provision  in  any
other jurisdiction.
   Section 6.5.   Third-Party Beneficiaries; Prior Agreements.
   It  is intended that the Trustee, the Collateral Agent and the
Depositary  Agent be, and the Trustee, the Collateral  Agent  and
the  Depositary Agent are hereby made, third-party  beneficiaries
of  this  Agreement.  This Agreement is for the sole  benefit  of
Funding Corporation, the Trustee, the Holders and the Partnership
Guarantors  and is not for the benefit of any other third  party.
Notwithstanding the two preceding sentences, no Holder shall have
any  right  to  pursue any remedy hereunder  except  through  the
Trustee as permitted under Sections 6.5 and 6.6 of the Indenture.
This  Agreement supersedes all prior agreements among the parties
with respect to the matters addressed herein.
        Section 6.6.   Partnership Guarantors in Control.
  In no event shall Funding Corporation's or the Trustee's rights
and  interests  under  this Agreement  and  the  other  Financing
Documents  be  construed  to  give  Funding  Corporation  or  the
Trustee, or be deemed to indicate that Funding Corporation or the
Trustee has, control of the business, management or properties of
the  Partnership  Guarantors or power over the  daily  management
functions   and  operating  decisions  made  by  the  Partnership
Guarantors.
                Section 6.7.   Number and Gender.
   Whenever  used herein, the singular number shall  include  the
plural  and  the plural the singular, and the use of  any  gender
shall be applicable to all genders.
                    Section 6.8.   Captions.
  The captions, headings, table of contents and arrangements used
in  this Agreement are for convenience only and do not and  shall
not  be deemed to affect, limit, amplify or modify the terms  and
provisions hereof.
         Section 6.9.   Applicable Law and Jurisdiction.
    This  Agreement  shall  be  governed  by  and  construed  and
interpreted  in  accordance  with  the  laws  of  the  State   of
California.
                     Section 6.10.  Consent.
   Whenever the consent or approval of Funding Corporation or the
Partnership  Guarantors  is  required  herein,  such  consent  or
approval shall not be unreasonably withheld or delayed.
                   Section 6.11.  No Recourse.
   Funding  Corporation  agrees that no general  partner  (except
CEOC,  VPC, Conejo, Niguel, San Felipe and BNG), limited  partner
(except   Conejo,  Niguel  and  San  Felipe),  member,   officer,
director,  employee or shareholder of the Partnership  Guarantors
or   any   Affiliate   of  any  such  party  (collectively,   the
"Nonrecourse  Parties")  shall be personally  liable  under  this
Agreement  for  the  payment of any sums now or  hereafter  owing
Funding Corporation under the terms of, or for the performance of
any obligation contained in, this Agreement.  Funding Corporation
agrees that its rights shall be limited to proceeding against the
Partnership  Guarantors and the security provided or intended  to
be  provided pursuant to the Security Documents and that it shall
have no right to proceed against the Nonrecourse Parties for  (a)
the satisfaction of any monetary obligation of, or enforcement of
any  monetary claim against, the Partnership Guarantors, (b)  the
performance  of  any  obligation, covenant or  agreement  arising
under  this  Agreement, or (c) any deficiency judgment  remaining
after  foreclosure  of  any  property  securing  the  obligations
hereunder.
                  Section 6.12.  Counterparts.
   This  Agreement  may be signed in any number of  counterparts,
each  of which shall be an original, with the same effect  as  if
the signatures thereto and hereto were upon the same instrument.
             Section 6.13.  Successors and Assigns.
   All  the  covenants, promises and agreements in this Agreement
contained by or on behalf of the Partnership Guarantors, or by or
on  behalf  of Funding Corporation, shall bind and inure  to  the
benefit  of  their respective successors and assigns, whether  so
expressed or not.
          Section 6.14.  Joint and Several Obligations.
   The  obligations of the Partnership Guarantors are  joint  and
several.
              Section 6.15.  Maximum Interest Rate.
   Notwithstanding any provision to the contrary contained herein
or  in  the  Partnership  Project Note,  at  no  time  shall  the
Partnership  Guarantors be obligated or required to pay  interest
on  the  principal balance due hereunder or thereunder at a  rate
which  could be in excess of the maximum interest rate  permitted
by  law  to  be contracted or agreed to be paid. If by the  terms
hereof  or  of  the  Partnership Project  Note,  the  Partnership
Guarantors are at any time required or obligated to pay  interest
in  excess  of  such  maximum rate, then  the  rate  of  interest
applicable hereunder shall be deemed to be immediately reduced to
such  maximum rate and the interest payable shall be computed  at
such maximum rate.


          [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
          IN WITNESS WHEREOF, the parties hereto have caused this

Agreement  to be duly executed and delivered by their  respective

officers  thereunto duly authorized as of the  date  first  above

written.


PARTNERSHIP GUARANTORS:


                         CALENERGY OPERATING CORPORATION,
                         a Delaware corporation



                         By:/s/  Steven A. McArthur
                         Name:  Steven A. McArthur
                         Title:    Executive Vice President


                         VULCAN POWER COMPANY,
                         a Nevada corporation



                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President


                         CONEJO ENERGY COMPANY,
                         a California corporation



                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President

                         NIGUEL ENERGY COMPANY,
                         a California corporation



                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President


                         SAN FELIPE ENERGY COMPANY,
                         a California corporation



                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President


                         BN GEOTHERMAL INC.,
                         a Delaware corporation



                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President


                         DEL RANCH, L.P.,
                         a California limited partnership



                         By: CalEnergy Operating Corporation,
                             a Delaware corporation, its general partner

                             By:/s/  Steven A. McArthur
                             Name:     Steven A. McArthur
                             Title:    Executive Vice President


                         ELMORE, L.P.,
                         a California limited partnership

                         By: CalEnergy Operating Corporation,
                             a Delaware corporation, its general partner



                             By:/s/  Steven A. McArthur
                             Name:   Steven A. McArthur
                             Title:      Executive Vice President


                         LEATHERS, L.P.,
                         a California limited partnership

                         By:     CalEnergy Operating Corporation,
                              a Delaware corporation, its general partner



                             By:/s/  Steven A. McArthur
                             Name:  Steven A. McArthur
                             Title:     Executive Vice President


                         VULCAN/BN GEOTHERMAL POWER COMPANY,
                         a Nevada general partnership

                         By: Vulcan Power Company,
                              a  Nevada corporation, its  general partner



                             By:  /s/  Steven A. McArthur
                             Name:   Steven A. McArthur
                             Title:     Executive Vice President

                         CALENERGY MINERALS LLC,
                         a Delaware limited liability company
                         
                         By:
                         Salton Sea Minerals Corp.,
                             a Delaware corporation, its manager
                         
                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President
                         
                         
                         CE TURBO LLC,
                         a Delaware limited liability company
                         
                         By:   Magma Power Company,
                               a Nevada corporation, its manager
                         
                         By:  /s/  Steven A. McArthur
                         Name:   Steven A. McArthur
                         Title:     Executive Vice President


FUNDING CORPORATION:

                         SALTON SEA FUNDING CORPORATION,
                         a Delaware corporation




                         By:  /s/  Steven A. McArthur
                         Name:       Steven A. McArthur
                         Title:      Executive Vice President