SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549
                             ----------------------

                                    FORM 10-Q

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

                         For the quarterly period ended

                               SEPTEMBER 30, 2002

                           COMMISSION FILE NO. 333-608

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.
                   ------------------------------------------
             (Exact name of registrant as specified in its charter)

              PHILIPPINES                                    Not Applicable
 -----------------------------------                      --------------------
 (State or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                           Identification No.)

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

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

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
               ---------                    ----------

Former name, former address and former fiscal year, if changed since last
report.  Not Applicable
         ---------------

767,162 shares of Common Stock, $0.038 par value were outstanding as of November
13, 2002.



<page>

                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                                    Form 10-Q

                               September 30, 2002
                                  -------------

                                 C O N T E N T S

PART I:  FINANCIAL INFORMATION                                            Page
------------------------------

Item 1.           Financial Statements
-------

Report of Independent Public Accountants                                    3

Balance Sheets, September 30, 2002 and December 31, 2001                    4

Statements of Income for the Three and Nine Months Ended
September 30, 2002 and 2001                                                 5

Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and 2001                                                 6

Notes to Financial Statements                                               7

Item 2.  Management's Discussion and Analysis of Financial
-------    Condition and Results of Operations                             13

Item 3.  Quantitative and Qualitative Disclosures on Market Risk           22
-------

Item 4.  Controls and Procedures                                           22
-------

PART II:  OTHER INFORMATION
---------------------------

Item 1.         Legal Proceedings                                          23
-------
Item 2.         Changes in Securities                                      23
-------
Item 3.         Defaults on Senior Securities                              23
-------
Item 4.         Submission of Matters to a Vote of Security Holders        23
-------
Item 5.         Other Information                                          23
-------
Item 6.         Exhibits and Reports on Form 8-K                           23
-------

Signatures                                                                 24

Officer Certifications                                                     25


<page>

Report of Independent Accountants

To the Board of Directors and Stockholders of
CE CASECNAN WATER AND ENERGY COMPANY, INC.



We have reviewed the accompanying balance sheets of CE Casecnan Water and Energy
Company,  Inc. as of September 30, 2002 and the related statements of income for
the three and nine months  ended  September  30, 2002 and 2001 and of cash flows
for the  nine  months  ended  September  30,  2002  and  2001.  These  financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical review procedures to the
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  interim  financial  statements  for  them to be in
conformity with accounting principles generally accepted in the United States of
America.

We previously audited in accordance with auditing  standards  generally accepted
in the United States of America,  the balance sheet as of December 31, 2001, and
the related  statements of income,  changes in stockholders'  equity and of cash
flows for the year then ended (not  presented  herein),  and in our report dated
February  26,  2002,  we expressed  an  unqualified  opinion on those  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
balance  sheet  information  as of December  31, 2001,  is fairly  stated in all
material  respects  in  relation  to the  balance  sheet  from which it has been
derived.




Makati City, Philippines
November 7, 2002


                                      (3)
<page>



                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                                 BALANCE SHEETS
             (Amounts in thousands U.S. Dollars, except share data)
<table>
<caption>

=======================================================================================
                                                            September 30,  December 31,
                                                               2002           2001
                                                             (Unaudited)    (Audited)
---------------------------------------------------------------------------------------


                                   A S S E T S
                                   -----------

                                                           <C>          <C>
Current assets:
  Cash                                                        $   5,446    $   1,078
  Trade receivable, net                                          41,365        8,012
  Accrued interest and other receivables                          6,691        6,601
  Restricted cash                                                15,957            -
  Prepaid expenses and other current assets                       4,353        3,285
------------------------------------------------------------------------------------
    Total current assets                                         73,812       18,976
Restricted cash and investments                                   5,978        5,978
Bond issue costs, net                                             5,591        6,712
Property, plant and equipment, net                              451,541      466,455
Deferred income tax                                               5,371        5,371
Other assets                                                      7,118       11,700
------------------------------------------------------------------------------------
                                                              $ 549,411    $ 515,192
====================================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current liabilities:
  Accounts payable and accrued expenses                       $   5,507    $   4,626
  Accrued interest                                               12,939        5,014
  Payable to affiliates                                          34,616       34,699
  Current portion of long-term debt                              38,146       35,200
------------------------------------------------------------------------------------
    Total current liabilities                                    91,208       79,539
------------------------------------------------------------------------------------
Notes payable                                                    51,263       40,763
------------------------------------------------------------------------------------
Long-term debt, net of current portion                          267,191      287,925
------------------------------------------------------------------------------------
Commitments and contingencies (Note 5)
------------------------------------------------------------------------------------
Stockholders' equity
  Capital stock
    Authorized - 2,148,000 shares at one Philippine peso
      ($0.038) par value per share
    Issued and outstanding - 767,162 shares                          29           29
    Additional paid-in capital                                  123,807      123,807
    Retained earnings/(accumulated deficit)                      15,913      (16,871)
------------------------------------------------------------------------------------
                                                                139,749      106,965
------------------------------------------------------------------------------------
                                                              $ 549,411    $ 515,192
====================================================================================
</table>

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

                                      (4)
<page>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                              STATEMENTS OF INCOME
             (Amounts in thousands U.S. Dollars, except share data)
                                   (Unaudited)
<table>
<caption>
================================================================================================
                                               Three Months Ended         Nine Months Ended
                                                  September 30               September 30
                                             ---------------------------------------------------
                                                2002          2001         2002           2001
------------------------------------------------------------------------------------------------

                                          <C>            <C>          <C>            <C>
Revenues
  Delivery of water                          $  20,480      $      -     $  60,262      $      -
  Sale of electricity                           18,660             -        36,849             -
------------------------------------------------------------------------------------------------
                                                39,140             -        97,111             -
------------------------------------------------------------------------------------------------
Operating expenses
  Depreciation                                   5,844             -        17,583             -
  Plant operations                               2,638           312         6,705           743
  Doubtful accounts expense                      3,177             -         8,062             -
------------------------------------------------------------------------------------------------
                                                11,659           312        32,350           743
------------------------------------------------------------------------------------------------
Operating income (loss)                         27,481          (312)       64,761          (743)
------------------------------------------------------------------------------------------------
Other income (expenses)
  Interest income                                   62            89           158           958
  Interest expense                             (10,602)      (10,713)      (32,106)      (33,365)
  Capitalized interest                               -        10,713             -        33,365
  Other expense                                    (22)            -           (29)            -
------------------------------------------------------------------------------------------------
                                               (10,562)           89       (31,977)          958
------------------------------------------------------------------------------------------------
Income (loss) before income taxes               16,919          (223)       32,784           215
Income tax benefit (expense)                         -            50             -           (48)
------------------------------------------------------------------------------------------------
Net income (loss)                            $  16,919     $    (173)    $  32,784     $     167
================================================================================================

Net income (loss) per share                  $   22.05     $   (0.23)    $   42.73     $    0.22
==================================================================================================

Average number of common shares outstanding    767,162       767,162       767,162       767,162
==================================================================================================
</table>

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

                                      (5)

<page>


                   CE CASECNAN WATER AND ENERGY COMPANY, INC.

                            STATEMENTS OF CASH FLOWS
                       (Amounts in thousands U.S. Dollars)
                                   (Unaudited)
<table>
<caption>
===============================================================================================
                                                                             Nine Months Ended
                                                                               September 30
                                                                          ---------------------
                                                                             2002        2001
-----------------------------------------------------------------------------------------------

                                                                       <C>          <C>
  Cash flows from operating activities
     Net income                                                           $ 32,784     $    167
     Adjustments to reconcile net income to net cash
        provided by operating activities:
         Depreciation                                                       17,583            -
         Amortization of bond issue costs                                    1,121        1,203
         Provision for deferred income taxes                                     -           48
     Changes in current assets and current liabilities:
         Increase in trade receivable                                      (33,353)           -
         (Increase) decrease in accrued interest and other receivables         (90)         525
         Increase in prepaid expenses and other current assets              (1,068)         (65)
         Increase (decrease) in accounts payable and accrued expenses          881          (96)
         Increase in accrued interest                                        7,925        9,316
         Decrease in payable to affiliates                                     (83)           -
-----------------------------------------------------------------------------------------------
     Net cash provided by operating activities                              25,700       11,098
-----------------------------------------------------------------------------------------------
  Cash flows from investing activities
     Additions to development and construction costs                        (2,669)     (56,054)
     Decrease in restricted cash and investments                                 -            1
     Decrease (increase) in other assets                                     4,582       (1,162)
     Increase in accounts payable and accrued expenses
        related to development and construction costs                            -        4,371
-----------------------------------------------------------------------------------------------
     Net cash provided by (used in) investing activities                     1,913      (52,844)
-----------------------------------------------------------------------------------------------
  Cash flows from financing activities
     (Increase) decrease in restricted cash and investments                (15,957)      47,922
     Increase in payable to affiliates related to construction                   -        8,128
     Repayment of bonds payable                                            (17,788)     (14,625)
     Increase in notes payable                                              10,500            -
-----------------------------------------------------------------------------------------------
     Net cash (used in) provided by financing activities                   (23,245)      41,425
-----------------------------------------------------------------------------------------------
  Net increase (decrease) in cash                                            4,368         (321)
  Cash at beginning of period                                                1,078          703
-----------------------------------------------------------------------------------------------
  Cash at end of period                                                   $  5,446     $    382
===============================================================================================
Supplemental cash flow disclosures:
     Cash interest paid net of amount capitalized                           21,689      (10,518)
     Cash taxes paid                                                             -            -
===============================================================================================
</table>

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

                                       (6)
<page>

CE CASECNAN WATER AND ENERGY COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS
As of and for the three and nine months ended September 30, 2002 and 2001
(UNAUDITED)

Note 1 - General
----------------

The accompanying unaudited interim financial statements have been prepared by CE
Casecnan  Water and Energy  Company,  Inc. (CE Casecnan or the Company)  without
audit,  pursuant to the rules and  regulations  of the  Securities  and Exchange
Commission  (SEC)  for  interim  financial  reporting.  In  the  opinion  of the
management,   the  accompanying   unaudited  financial  statements  contain  all
adjustments  (consisting only of normal recurring accruals) necessary to present
fairly the  financial  position of the Company as of  September  30,  2002,  the
results of its operations for the three and nine months ended September 30, 2002
and 2001 and its cash flows for the nine  months  ended  September  30, 2002 and
2001.  The results of operations  for the three and nine months ended  September
30, 2002 and 2001 are not  necessarily  indicative of the results to be expected
for the full year.

The accompanying unaudited interim financial statements and notes thereto should
be read in conjunction with the audited  financial  statements and notes thereto
included in the  Company's  Annual Report on Form 10-K for the fiscal year ended
December 31, 2001. In particular,  the Company's significant accounting policies
and  practices  are  presented in Note 2 to the  financial  statements  included
therein.

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

Note 2 - Trade receivable
-------------------------

Trade  receivable   pertains  to  a  receivable  from  the  Philippine  National
Irrigation  Administration  (NIA) for water delivered to NIA and the electricity
generated  and  delivered  by the  Company  to  the  Philippine  National  Power
Corporation (NPC) on behalf of NIA.

Trade  receivable as of September 30, 2002 and December 31, 2001 consists of (in
thousands):

==========================================================================
                                            September 30,     December 31,
                                                 2002            2001
--------------------------------------------------------------------------
Water delivery fee                             $36,875          $4,474
Guaranteed energy delivery fee                   3,676           2,059
Excess energy delivery fee                       9,397           2,000
--------------------------------------------------------------------------
                                                49,948           8,533
Less - allowance for doubtful accounts           8,583             521
--------------------------------------------------------------------------
                                               $41,365          $8,012
==========================================================================

                                      (7)
<page>

Included in total  revenues of $39.1 million and $97.1 million for the three and
nine months  ended  September  30,  2002,  are $8.8  million and $25.3  million,
respectively, related to the tax portion of the water delivery fees due from NIA
under the Project  Agreement.  As of September 30, 2002, the  cumulative  unpaid
portion of such fees since  commercial  operation of the Project  totaled  $27.1
million.  As NIA has not yet paid any portion of these fees,  the allowances for
doubtful  accounts as of September 30, 2002 and December 31, 2001  represent the
Company's estimate of the uncollectible portion of the amounts due from NIA.

The tax  portion of the water  delivery  fees were 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 its outstanding debt. In
connection with the unpaid portion of such fees, on August 16, 2002, the Company
commenced  arbitration  against NIA by serving it with a Request for Arbitration
under International Chamber of Commerce rules.

Note 3 - 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 $34.6 million and $34.7 million at September 30, 2002
and December 31, 2001.

The Company has $51.3  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
amounts of principal or interest payable on the notes shall bear interest at the
stated rate plus two (2%) percent.  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 on
such  notes  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.

Note 4 - Current portion of long-term debt
------------------------------------------

Floating  Rate Notes (FRNs) of $13.1  million and Series B Bonds of $4.3 million
will become due and payable on November 15, 2002 and an additional $16.9 million
Series A and $3.8  million  Series B Bonds  will be due and  payable  on May 15,
2003.

                                      (8)

<page>


Note 5 - Commitments and contingencies
--------------------------------------

Construction contract arbitration
---------------------------------

On May 7, 1997, the Company  entered into a fixed-price,  date certain,  turnkey
engineering,  procurement and construction contract to complete the construction
of the Casecnan Project (Construction Contract). The work under the Construction
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  Construction  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
Casecnan  Project's  partially  completed  vertical  surge shaft and the need to
drill a replacement surge shaft.

Upon the receipt of the working  schedule,  the Company 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 (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 Construction Contract, and the Contractor
was still  contractually  obligated  either to complete the Casecnan  Project by
March  31,  2001 or to pay  liquidated  damages  for  the  delay  in  completion
amounting to $125  thousand  per day of delay.  As of  September  30, 2002,  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.

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 sought  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 on

                                      (9)
<page>

December 11, 2001 amounted to a repudiation of the Construction Contract and has
filed a claim for unspecified  quantum meruit  damages.  The Contractor also has
alleged  that  the  delay  liquidated  damages  clause  in the EPC  Contract  is
unenforceable as a penalty. CE Casecnan believes all 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.   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.

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. On April
26, 2002, CE Casecnan and the Contractor  mutually  agreed that no demands would
be  made on the  Banca  di  Roma  demand  guaranty  except  pursuant  to a final
arbitration award. 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 from  March 14 to 19,  2002.  From  November 4 to 6,
hearings  were  held on the  Contractor's  claim  with  respect  to the  alleged
unenforceability  of the delay liquidated  damages clause.  On November 7, 2002,
the ICC issued the  arbitration  tribunal's  partial  award with  respect to the
Contractor's  force majeure and geologic  conditions  claims. The arbitral panel
awarded the  Contractor  18 days of schedule  relief in the aggregate for all of
the force majeure  events,  and awarded the Contractor $3.8 million with respect
to the cost of the collapsed  surge shaft,  which shall be  capitalized as costs
related to the  construction of the Project and included in accounts payable and
accrued expenses.  All of the Contractor's  other claims that have been heard by
the arbitral tribunal were denied.

Further  hearings on the  Contractors  repudiation and quantum meruit claims are
scheduled  for  January 20 through 23 and  January 28 through  31,  2003.  These
claims, and the alleged unenforceability of the delay liquidated damages clause,
have not been ruled on by the arbitration tribunal.

NIA arbitration
---------------

On August 16, 2002, CE Casecnan commenced  arbitration against NIA by serving it
with a Request for Arbitration under ICC rules (the Request for Arbitration). In
the  Request for  Arbitration,  CE Casecnan  claims  that NIA has  breached  its
obligations  under the  Casecnan  Project  Agreement  by failing to reimburse CE
Casecnan for certain tax payments and by failing to pay the portion of the Water
Delivery Fee under the Casecnan  Project  Agreement  attributable to certain tax
payments.  The Casecnan Project Agreement provides for arbitration in accordance
with International  Chamber of Commerce rules by a panel of three arbitrators in
Singapore.  CE  Casecnan  is  awaiting  NIA's  formal  answer to the Request for
Arbitration.  CE  Casecnan  intends  to  vigorously  pursue  its claims in these
proceedings.


                                      (10)
<page>


Shareholder Agreement litigation
--------------------------------

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   shareholder   LaPrairie  Group  Contractors
(International) Ltd. (LPG) that MidAmerican's  ownership interest in the Company
will  increase to 100%.  On July 8, 2002,  LPG filed a complaint in the Superior
Court of the State of  California,  City and  County of San  Francisco  against,
inter alia,  CE Casecnan  Ltd.  and  MidAmerican.  The Company is not named as a
defendant.  In the complaint,  LPG seeks  compensatory  and punitive damages for
alleged breaches of the Shareholder  Agreement and alleged breaches of fiduciary
duties  allegedly owed by MidAmerican and CE Casecnan Ltd. to LPG. The complaint
also seeks  injunctive  relief  against  all the  defendants  and a  declaratory
judgment  that LPG is entitled to maintain its 15% interest in the Company.  The
Company  does not  expect  any  material  financial  impact  as a result of this
litigation.

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 when NIA completed
the installation and testing of the Project's metering  equipment.  Accordingly,
as of September  30, 2002,  the Company has accrued $1.6 million for  liquidated
damages,  payable to NIA for 120 days of delay,  capitalized as costs related to
the  construction  of the  Project.  This is included  in  accounts  payable and
accrued expenses in the balance sheet.

Concentration of risk
---------------------

NIA's payments 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. Any material failure of NIA to fulfill its obligations under
the Project  Agreement and any material failure of the Philippine  Government 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.

                                      (11)

<page>


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
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.

In connection with an interagency  review of approximately 40 independent  power
project  contracts  in the  Philippines  in  July  2002,  the  Casecnan  Project
(together with four other  projects) has reportedly  been  identified as raising
legal  and  financial  questions  and,  with  those  other  contracts,  has been
prioritized  for  renegotiation.  No  written  report has yet been  issued  with
respect to the interagency  review,  and the timing and nature of steps, if any,
that  the  Philippine  Government  may  take  in  this  regard  are  not  known.
Accordingly,  it is not known what, if any, impact the government's  review will
have on the operations of the Company.  Company  representatives,  together with
certain  current and former  government  officials,  also have been requested to
appear, and have appeared, before a Philippine Senate committee which has raised
questions and made  allegations  with respect to the Casecnan  Project's  tariff
structure and  implementation.  No further  hearings are scheduled at this time.
The Company has and  intends to  continue  to respond to such  questions  and to
vigorously  defend the Casecnan  Project against any  allegations,  which may be
made.  The Company  believes the  allegations  made with respect to the Casecnan
Project to be without merit.

                                      (12)
<page>

CE CASECNAN WATER AND ENERGY COMPANY, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement Under the Private Securities Litigation Reform Act
------------------------------------------------------------------------

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   operating   uncertainty,
uncertainties   relating  to  doing  business  outside  of  the  United  States,
uncertainties  relating to domestic and  international  economic  and  political
conditions and  uncertainties  regarding the impact of  regulations,  changes in
government  policy,  industry  deregulation  and competition as discussed in the
Company's  Securities and Exchange Commission  filings,  including the Company's
Annual  Report on Form 10-K for the fiscal year ended  December  31,  2001.  The
Company  assumes  no  responsibility  to  update   forward-looking   information
contained herein.

Business of the Company
-----------------------

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 operation on December 11, 2001.

Critical Accounting Policies
----------------------------

The  preparation of financial  statements and related  disclosures in conformity
with accounting  principles  generally  accepted in the United States of America
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  included  in the report on Form 10-K  describes  the
significant  accounting  policies  and methods  used in the  preparation  of the
financial statements. Estimates are used for, but not limited to, accounting for
the allowance for doubtful  accounts,  income taxes 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.

                                      (13)
<page>

Allowance for Doubtful Accounts
-------------------------------

The allowance for doubtful accounts is based on the Company's  assessment of the
collectibility  of a  specific  customer's  account.  This  assessment  requires
judgment  regarding the ability of the customer to repay the amounts owed to the
Company.  Any  change  in the  Company's  assessment  of the  collectibility  of
accounts  receivable  that was not previously  provided for could  significantly
impact the calculation of such allowance and the results of operations.

Deferred Income Tax Assets and Liabilities
------------------------------------------

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.

Impairment of long-lived assets
-------------------------------

Long-lived  assets are reviewed  for  impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  Triggering  events  include a significant  change in the extent or
manner in which long-lived  assets are being used or in its physical  condition,
in legal factors,  or in the business climate that could affect the value of the
long-lived assets,  including changes in regulation.  The interpretation of such
events  requires  judgment  from  management  as to  whether  such an event  has
occurred  and is  required.  If an event  occurs that could  affect the carrying
value of the asset and  management  does not identify it as a triggering  event,
future results of operations could be significantly affected.

Upon the occurrence of a triggering  event,  the carrying amount of a long-lived
asset is reviewed to assess  whether the  recoverable  amount has declined below
its carrying  amount.  The  recoverable  amount is the estimated net future cash
flows that the  Company  expects  to  recover  from the future use of the asset,
undiscounted and without interest,  plus the asset's residual value on disposal.
Where the recoverable  amount of the long-lived  asset is less than the carrying
value,  an  impairment  loss would be  recognized to write down the asset to its
fair value which is based on discounted estimated cash flows from the future use
of the asset.

The  estimated  cash flows arising from future use of the asset that are used in
the  impairment  analysis  requires  judgment  regarding  what the Company would
expect to recover from future use of the asset.  Any changes in the estimates of
cash flows  arising  from future use of the asset or the  residual  value of the
asset on disposal based on changes in the market conditions,

                                      (14)
<page>

changes in the use of the assets,  management's  plans, the determination of the
useful  life  of  the  assets  and  technology  change  in  the  industry  could
significantly  change the calculation of the fair value or recoverable amount of
the asset and the resulting  impairment loss, which could  significantly  affect
the results of operations.

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

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

Revenues of $39.1  million for the three  months and $97.1  million for the nine
months ended September 30, 2002 consist of revenue for the delivery of water and
the  sale of  electricity.  Revenues  from  delivery  of  water  and the sale of
electricity comprised 52% and 48%,  respectively,  of the total revenues for the
quarter,  while the year to date revenues from delivery of water and the sale of
electricity comprised 62% and 38%,  respectively,  of the total revenues for the
year to date.  Revenues from sale of electrical  energy for the quarter consists
of 49% guaranteed  energy fees and 51% excess energy fees while the year-to-date
sale of electricity consists of 74% guaranteed energy fees and 26% excess energy
fees. The increase in rainfall in the third quarter  resulted in the high excess
energy fees.

The following table provides operating data of the Casecnan Project:

--------------------------------------------------------------------------------
                                          Three months ended  Nine months ended
                                             September 30,      September 30,
                                                 2002               2002
--------------------------------------------------------------------------------
Capacity factor                                   52%                24%
--------------------------------------------------------------------------------
Nameplate rating (NMW)                           150                150
--------------------------------------------------------------------------------
Electricity produced (kWh in millions)           172                237
--------------------------------------------------------------------------------
Water delivered (cubic meters in millions)       261                360
--------------------------------------------------------------------------------

Depreciation  expense for the three and nine months ended September 30, 2002 was
$5.8 million and $17.6 million, respectively.  There was no depreciation expense
for the three and nine months  ended  September  30,  2001 as the Company  began
operations  and usage of property,  plant and equipment in the fourth quarter of
fiscal year 2001.

Plant  operation costs of $2.6 million and $0.3 million were incurred during the
three months ended  September 30, 2002 and 2001,  respectively.  Plant operation
costs for the nine months  ended  September  30, 2002 and 2001 were $6.7 million
and $0.7 million,  respectively. The increase in costs in 2002 resulted from the
commencement  of commercial  operations of the Casecnan  Project on December 11,
2001.


                                      (15)
<page>

Doubtful  accounts  expense was $3.2  million and $8.1  million in the three and
nine months ended  September  30,  2002,  respectively.  The  doubtful  accounts
expense  was based on the  Company's  assessment  of the  collectibility  of the
accounts receivable.

Interest income consists of income on cash and restricted investments.  Interest
income  decreased in the third quarter of 2002 to $62 thousand from $89 thousand
in the same period in 2001.  Interest  income was $0.2 million and $1.0 million,
respectively  for the nine  months  ended  September  30,  2002 and 2001.  These
decreases are primarily due to lower cash balances.

Interest expense  inclusive of bond issue costs in the third quarter of 2002 was
$10.6  million  compared to $10.7  million for the same period in 2001.  Year to
date interest  expense was $32.1 million in 2002,  compared to $33.4 million for
the same period in 2001,  a 3.9%  decrease.  The  decrease  in interest  expense
resulted from scheduled  repayments of principal of the Company's  Floating Rate
Notes  and  Series  B  bonds,  offset  in  part  by the  issuance  of  unsecured
subordinated notes to CE Casecnan, Ltd.

Income tax expense for the three and nine months  ended  September  30, 2002 was
zero due to the Casecnan  Project's income tax holiday that is in effect for six
years from December 11, 2001,  the date of commercial  operations.  Deferred tax
benefit/(provision)  for the three and nine months in 2001 was $50  thousand and
$(48) thousand, respectively.

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

CE Casecnan  financed a portion of the costs of the Casecnan Project through the
issuance of $125.0 million of its 11.45% Senior Secured Series A Notes due 2005,
$171.5  million of its 11.95% Senior  Secured  Series B Bonds due 2010 and $75.0
million  of its  Senior  Secured  Floating  Rate  Notes  due 2002  (Securities),
pursuant to an indenture  (Trust  Indenture) dated November 27, 1995, as amended
to date.

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

The  Securities  are  subject  to  certain  optional  and  mandatory  redemption
provisions as defined in the Trust Indenture.  The Securities  contain customary
events of default and restrictive covenants.

Since November 2001, CE Casecnan has received $51.3 million from its parent,  CE
Casecnan Ltd. and issued unsecured subordinated notes payable, the proceeds from
which were used primarily to finance the interest and principal payments for the
notes and bonds.

                                      (16)
<page>

As of  September  30,  2002,  the  Company  also had  received  $6.0  million of
liquidated  damages from demands made on demand guarantees posted by Commerzbank
on behalf of the Contractor.

The cash flow from  operations  for the nine months ended  September 30, 2002 is
$25.7  million.  The  majority  of the cash flow from  operations  came from the
collections of water delivery fees and guaranteed  energy fees of $63.8 million,
partially offset by interest payments on the Securities.

The Company expects to spend $3.7 million for capital expenditures for 2002.

Due to the delay in the Project entering  commercial  operations and the failure
to receive delay liquidated  damages from the Contractor,  the Company's ability
to make  principal and interest  payments on the Securities on November 15, 2002
was contingent on rainfall  through October being at or near the levels expected
by the hydrology model and on receiving the resulting  excess energy fees. These
amounts  have  been  received  and the  Company  presently  expects  to meet the
November 15, 2002 debt service payments.  Going forward, the Company's liquidity
could be affected by changing  excess  energy  fees  resulting  from  unexpected
weather  patterns and by other  factors,  including NIA meeting its  obligations
under the Project Agreement.

The Company  believes  that it will  generate  and collect  adequate  revenue to
sustain operations and provide for the operation of its business for the next 12
months.

At  September  30,  2002 and  December  31,  2001,  the Company did not have any
relationships or transactions with persons or entities that derive benefits from
their  non-independent  relationship  with the  Company or its  related  parties
except as disclosed herein.

Construction contract arbitration
---------------------------------

On May 7, 1997, the Company  entered into a fixed-price,  date certain,  turnkey
engineering,  procurement and construction contract to complete the construction
of the Casecnan Project (Construction Contract). The work under the Construction
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  Construction  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

                                      (17)
<page>

December 2000 of the Casecnan Project's partially completed vertical surge shaft
and the need to drill a replacement surge shaft.

Upon the receipt of the working  schedule,  the Company 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 (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 Construction Contract, and the Contractor
was still  contractually  obligated  either to complete the Casecnan  Project by
March  31,  2001 or to pay  liquidated  damages  for  the  delay  in  completion
amounting to $125  thousand  per day of delay.  As of  September  30, 2002,  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.

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 sought  compensation  for alleged
additional  costs of  approximately  $4.0  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  $62.0 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 on December 11, 2001 amounted
to a  repudiation  of the  Construction  Contract  and has  filed  a  claim  for
unspecified  quantum meruit  damages.  The Contractor  also has alleged that the
delay  liquidated  damages  clause in the EPC  Contract  is  unenforceable  as a
penalty.  CE Casecnan believes all 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.  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.

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. On April
26, 2002, CE Casecnan and the Contractor  mutually  agreed that no demands would
be  made on the  Banca  di  Roma  demand  guaranty  except  pursuant  to a final
arbitration award. Hearings on the force majeure

                                      (18)
<page>

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 from March
14 to 19, 2002.  From November 4 to 6,  hearings  were held on the  Contractor's
claim  with  respect to the  alleged  unenforceability  of the delay  liquidated
damages clause.  On November 7, 2002, the ICC issued the arbitration  tribunal's
partial  award with  respect to the  Contractor's  force  majeure  and  geologic
conditions claims. The arbitral panel awarded the Contractor 18 days of schedule
relief in the  aggregate for all of the force  majeure  events,  and awarded the
Contractor  $3.8 million with respect to the cost of the collapsed  surge shaft,
which shall be capitalized as costs related to the  construction  of the Project
and included in accounts payable and accrued  expenses.  All of the Contractor's
other claims that have been heard by the arbitral tribunal were denied.

Further  hearings on the  Contractors  repudiation and quantum meruit claims are
scheduled  for  January 20 through 23 and  January 28 through  31,  2003.  These
claims, and the alleged unenforceability of the delay liquidated damages clause,
have not been ruled on by the arbitration tribunal.

NIA arbitration
---------------

On August 16, 2002, CE Casecnan commenced  arbitration against NIA by serving it
with a Request for Arbitration under ICC rules (the Request for Arbitration). In
the  Request for  Arbitration,  CE Casecnan  claims  that NIA has  breached  its
obligations  under the  Casecnan  Project  Agreement  by failing to reimburse CE
Casecnan for certain tax payments and by failing to pay the portion of the Water
Delivery Fee under the Casecnan  Project  Agreement  attributable to certain tax
payments.  The Casecnan Project Agreement provides for arbitration in accordance
with International  Chamber of Commerce rules by a panel of three arbitrators in
Singapore.  CE  Casecnan  is  awaiting  NIA's  formal  answer to the Request for
Arbitration.  CE  Casecnan  intends  to  vigorously  pursue  its claims in these
proceedings.

Shareholder Agreement litigation
--------------------------------

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 shareholder  LaPrairie Group Contractors
(International)  Ltd.  ("LPG")  that  MidAmerican's  ownership  interest  in the
Company  will  increase to 100%.  On July 8, 2002,  LPG filed a complaint in the
Superior  Court of the State of  California,  City and  County of San  Francisco
against, inter alia, CE Casecnan Ltd. and MidAmerican.  The Company is not named
as a defendant.  In the complaint,  LPG seeks  compensatory and punitive damages
for  alleged  breaches of the  Shareholder  Agreement  and  alleged  breaches of
fiduciary  duties allegedly owed by MidAmerican and CE Casecnan Ltd. to LPG. The
complaint  also  seeks  injunctive  relief  against  all  the  defendants  and a
declaratory

                                      (19)
<page>

judgment  that LPG is entitled to maintain its 15% interest in the Company.  The
Company  does not  expect  any  material  financial  impact  as a result of this
litigation.

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 September 30,
2002, payable to NIA for 120 days of delay. This is included in accounts payable
and accrued expenses in the balance sheet.

Concentration of risk
---------------------

NIA's payments 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. 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
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.

                                      (20)
<page>

In connection with an interagency  review of approximately 40 independent  power
project  contracts  in the  Philippines  in  July  2002,  the  Casecnan  Project
(together with four other  projects) has reportedly  been  identified as raising
legal  and  financial   questions  and  with  those  other  contracts  has  been
prioritized  for  renegotiation.  No  written  report has yet been  issued  with
respect to the interagency  review,  and the timing and nature of steps, if any,
that  the  Philippine  Government  may  take  in  this  regard  are  not  known.
Accordingly,  it is not known what, if any, impact the government's  review will
have on the operations of the Company.

Company  representatives,  together with certain  current and former  government
officials,  also have been  requested  to appear,  and have  appeared,  before a
Philippine Senate committee which has raised questions and made allegations with
respect  to the  Project's  tariff  structure  and  implementation.  No  further
hearings are scheduled at this time.  The Company has and intends to continue to
respond to such  questions  and to  vigorously  defend the  Project  against any
allegations  which may be made. The Company  believes the allegations  made with
respect to the Project to be without merit.

                                      (21)
<page>


Item 3. Quantitative and Qualitative Disclosures About Market Risk

For  quantitative  and  qualitative  disclosures  about market risk affecting CE
Casecnan,  see Item 7A "Qualitative  and Quantitative  Disclosures  About Market
Risk" of CE Casecnan's Annual Report on Form 10K for the year ended December 31,
2001. CE  Casecnan's  exposure to market risk has not changed  materially  since
December 31, 2001.

Item 4: Controls and Procedures

CE  Casecnan  Water and  Energy  Company's  chief  executive  officer  and chief
financial  officer have  established  "disclosure  controls and  procedures" (as
defined in Rule  13a-14(c) and Rule 15d-14(c) of the Securities and Exchange Act
of  1934) to  ensure  that  material  information  of the  companies  and  their
subsidiaries  is made known to them by others within the  respective  companies.
Under their supervision, an evaluation of the disclosure controls and procedures
was performed within 90 days prior to the filing of this quarterly report. Based
on that evaluation,  the above-mentioned officers have concluded that, as of the
date of the  evaluation,  the disclosure  controls and procedures were operating
effectively.  Additionally,  the  above-mentioned  officers find that there have
been no  signification  changes in internal  controls,  or in other factors that
could  significantly  affect internal  controls,  subsequent to the date of that
evaluation.

                                      (22)
<page>

CE CASECNAN WATER AND ENERGY COMPANY, INC.



PART II - OTHER INFORMATION


Item 1 - Legal Proceedings.
------

     See Note 5 to the  financial  statements  and  discussion  in  management's
discussion and analysis.

Item 2 - Changes in Securities.
------

     Not applicable.

Item 3 - Defaults on Senior Securities.
------

     Not applicable.

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

     Not applicable.

Item 5 - Other Information.
------

     Not applicable.

Item 6 - Exhibits and Reports on Form 8-K.
------

     (a) Exhibits

     (b) Reports on Form 8-K:

The  Company  issued a Current  Report on form 8-K dated  August  14,  2002 with
certification  of its  chief  executive  officer  and  chief  financial  officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The Company issued a Current Report on Form 8-K dated August 19, 2002 announcing
that  it  had  commenced  international  arbitration  to  require  the  National
Irrigation  Administration  of the Philippine  (NIA) to perform its  contractual
obligation to reimburse  certain taxes paid during  construction of the Casecnan
Multipurpose Project.

                                      (23)

<page>


SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                CE CASECNAN WATER AND ENERGY COMPANY, INC.


Date: November 14, 2002         /s/  Patrick J. Goodman
                                ----------------------------
                                     Patrick J. Goodman
                                Senior Vice President & Chief Financial Officer



                                      (24)

<page>


                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, David A. Baldwin, certify that:

1. I have reviewed this  quarterly  report on Form 10-Q of CE Casecnan Water and
Energy Company, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      (25)
<page>


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 14, 2002


                                   /s/ David A. Baldwin
                                   --------------------
                                       David A. Baldwin
                                       President
                                       (chief executive officer)


                                      (26)
<page>


I, Patrick J. Goodman, certify that:

1. I have reviewed this  quarterly  report on Form 10-Q of CE Casecnan Water and
Energy Company, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,
                                      (27)
<page>

including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.




Date:  November 14, 2002


                            /s/  Patrick J. Goodman
                            -------------------------------------------------
                            Patrick J. Goodman
                            Senior Vice President and Chief Financial Officer


                                      (28)