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
                                
                          JUNE 30, 1998
                                
                   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.)

       6750 Ayala Avenue, 24th Floor
       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 June 30, 1998.
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                            Form 10-Q
                                
                          June 30, 1998
                          _____________
                                
                         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, June 30, 1998 and December 31, 1997         4

Statements  of  Operations for the Three Months and 
Six Months Ended June 30, 1998 and 1997 and for the 
period from inception (September 21, 1994)to June 30,1998   5

Statements of Cash Flows for the Six Months Ended 
June 30,1998 and 1997 and for the period from inception 
(September 21, 1994) to June 30, 1998                       6

Notes to Financial Statements                               7

Item 2. Management's Discussion and Analysis of 
Financial Condition and Results of Operations               9

PART II:  OTHER INFORMATION

Item 1. Legal Proceedings                                   12
Item 2. Changes in Securities                               12
Item 3. Defaults on Senior Securities                       12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information                                   12
Item 6. Exhibits and Reports on Form 8-K                    12

Signatures                                                  13

Exhibit 27                                                  14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We  have  reviewed the accompanying balance sheet of CE  Casecnan
Water  and  Energy  Company, Inc. (a company in  the  development
stage)  as  of  June  30,  1998, and the  related  statements  of
operations  for  the three months and six months ended  June  30,
1998  and the period from inception (September 21, 1994) to  June
30,  1998, and cash flows for the six months ended June 30,  1998
and  1997  and the period from inception (September 21, 1994)  to
June 30, 1998. The financial statements are the responsibility of
the Company's management.

A review of interim financial information consists principally of
applying  analytical  procedures to  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  auditing  standards   generally
accepted in the United States of America, 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  financial  statements
referred  to  above for them to be in conformity with  accounting
principles generally accepted in the United States of America.

We  have  audited in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of CE
Casecnan Water and Energy Company, Inc. as of December 31,  1997,
and  the  related  statements of operations for  the  year  ended
December 31, 1997, changes in stockholders' equity for the period
from  date of inception (September 21, 1994) to December 31, 1997
and  cash flows for the year ended December 31, 1997, and for the
period  from inception (September 21, 1994) to December 31,  1997
(not  presented  separately herein)  and,  in  our  report  dated
January  23, 1998, we expressed an unqualified opinion  on  those
financial statements.


SYCIP, GORRES, VELAYO & CO.



Makati City, Philippines
August 12, 1998
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                         BALANCE SHEETS
        (in thousands, except share and per share amounts)
                ________________________________
                                                     
                                         June 30,      December 31,
                                           1998            1997        
ASSETS                                  (unaudited)
Cash                                        $  2,527     $    547
Restricted cash and short-term investments   117,683      183,607
Settlement receivable, accrued interest 
  and other receivables                       84,137        2,962
Restricted investments                       123,250      126,684
Due from affiliates, net                         670          ---
Bond issue costs, net                         10,924       11,513
Development and construction costs           221,777      158,266
Deferred income tax                            8,664        8,333
                                                                 
   Total assets                             $569,632     $491,912
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                             
                                                                 
Liabilities:                                                     
Accounts payable and accrued expenses       $101,117     $ 19,192
Advances from an affiliate                       ---        3,059
Notes and bonds payable                      371,500      371,500
                                                                 
 Total liabilities                           472,617      393,751
                                                                 
Commitments and contingencies                                    
                                                                 
Stockholders' equity:
Common stock - par value $0.038 per share,                              
 authorized 2,148,000 shares, issued and      
 outstanding 767,162 shares                      29           29 
Additional paid in capital                  123,807      123,807
Accumulated deficit                         (26,821)     (25,675)
Total stockholders' equity                   97,015       98,161
                                                                 
Total liabilities and stockholders' equity $569,632     $491,912
                                                                 


    The accompanying notes are an integral part of these financial statements.
<PAGE>
               CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                    
                   UNAUDITED STATEMENTS OF OPERATIONS
           (in thousands, except share and per share amounts)
                    ________________________________
                                                                From Inception
                         Three Months Ended   Six Months Ended (Sept. 21, 1994)
                           June 30,              June 30,              to
                            1998      1997      1998      1997   June 30, 1998
Revenues:                                                       

Interest and other income   $4,960   $5,914   $10,044   $10,418    $57,935
                                                                          
Total revenues               4,960    5,914    10,044    10,418     57,935
                                                                          
Costs and expenses:                                                       
Interest expense, net of                                                  
interest capitalized         4,966    9,189    10,932    18,885     90,754
Amortization of bond                                                  
issue costs                    295      264       589       527      2,666
                                                                          
Total costs and expenses     5,261    9,453    11,521    19,412     93,420
                                                                          
Loss before income taxes      (301)  (3,539)   (1,477)   (8,994)   (35,485)
                                                                          
Deferred income tax benefit     68      867       331     2,203      8,664
                                                                          
Net loss to common 
stockholders                 $(233) $(2,672)  $(1,146)  $(6,791)  $(26,821)
                                                                          
Net loss per share          $(0.30) $ (3.48)  $ (1.49)  $ (8.85)  $ (38.30)
                                                                          
Average number of common                                                  
shares outstanding         767,162  767,162   767,162   767,162    700,356

The accompanying notes are an integral part of these financial statements.
<PAGE>
             CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                  
                 UNAUDITED STATEMENTS OF CASH FLOWS
                           (in thousands)
                  ________________________________
                                  

                                      Six Months Ended    From Inception
                                          June 30,     (September 21, 1994)
                                      1998        1997     June 30, 1998
Cash   flows   from   operating                           
activities:
Net loss                             $(1,146)    $(6,791)   $(26,821)
Adjustments  to  reconcile  net                           
cash flows used in operating
activities:
Deferred income tax benefit             (331)     (2,203)     (8,664)
Amortization of bond issue costs         589         527       2,666
Decrease (increase) in accrued                                     
 interest and other receivables       (1,175)      2,818      (4,137)
Increase  in  accounts  payable                                     
 and accrued expenses                    231         174       6,686
Net cash flows used in                                     
operating activities                  (1,832)     (5,475)    (30,270)
                                                                    
Cash flows from investing activities:
Additions to construction in progress(63,511)    (24,750)   (221,777)
Decrease (increase) in restricted                                     
 cash and short-term investments      65,924      13,109    (117,683)
Decrease (increase) in restricted
 investments                           3,434      14,365    (123,250)
Increase (decrease) in accounts                                     
 payable and accrued expenses 
 related  to development and
 construction activities               1,694         618      14,431
Net cash flows provided by (used in) 
 investing activities                  7,541       3,342    (448,279)
                                                                    
Cash flows from financing activities:
Issuance of bonds payable                  -           -     371,500
Proceeds from issuance of            
 capital stock                             -           -          29
Additional paid-in capital                 -           -     123,807
Bond issue costs                           -           -     (13,590)
Increase (decrease) in advances                                     
 from an affiliate                    (3,729)      2,369        (670)
Net cash flows provided by                                     
 (used in) financing activities       (3,729)      2,369     481,076

Net increase in cash                   1,980         236       2,527
Cash at beginning of period              547          32           -
Cash at end of period                 $2,527      $  268    $  2,527
                                                                    
Supplemental disclosure:                                            
Interest paid (net of amount         
 capitalized)                        $10,701     $18,914    $84,067


The accompanying notes are an integral part of these financial statements.
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                  NOTES TO FINANCIAL STATEMENTS
            (in thousands, except per share amounts)
                ________________________________
                                
                                
1.   General:

In  the  opinion  of  management  of CE  Casecnan  Water  and  Energy
Company,  Inc.  ("CE  Casecnan" or the "Company"),  the  accompanying
unaudited    financial    statements    contain    all    adjustments
(consisting   only  of  normal  recurring  accruals)   necessary   to
present  fairly the financial position as of June 30,  1998  and  the
results  of  operations for the three and six months ended  June  30,
1998  and  1997  and the period from inception (September  21,  1994)
to  June  30,  1998,  and cash flows for the six  months  ended  June
30,  1998  and  1997  and  the period from inception  (September  21,
1994) to June 30, 1998.

The  results  of operations for the three and six months  ended  June
30,  1998  and  1997 are not necessarily indicative  of  the  results
to be expected for the full year.

2.   Other Footnote Information:

Reference  is  made  to  the  Company's  December  31,  1997  audited
financial   statements   included  in   Form   10-K   that   included
information  necessary  or  useful  to  the  understanding   of   the
Company's   business  and  financial  statement  presentations.    In
particular,   the  Company's  significant  accounting  policies   and
practices  were  presented  as  Note 3 to  the  financial  statements
included in that report.

3.   Commitments and Contingencies

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

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

The  Casecnan  Project  was being constructed pursuant  to  a  fixed-
price,   date-certain,  turnkey  construction  contract  (the  "Hanbo
Contract")  on  a  joint  and  several  basis  by  Hanbo  Corporation
("Hanbo")   and   Hanbo  Engineering  and  Construction   Co.,   Ltd.
("HECC"),  both of which are South Korean corporations.   As  of  May
7,   1997,  CE  Casecnan  terminated  the  Hanbo  Contract   due   to
defaults  by  Hanbo and HECC including the insolvency  of  each  such
company.   On  May 7, 1997, CE Casecnan entered into  a  new  turnkey
engineering,  procurement  and  construction  contract  to   complete
the     construction     of     the     Casecnan     Project     (the
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                  NOTES TO FINANCIAL STATEMENTS
            (in thousands, except per share amounts)
                ________________________________

Commitments and Contingencies (continued)

Replacement  Contract").   The work under  the  Replacement  Contract
is   being  conducted  by  a  consortium  consisting  of  Cooperativa
Muratori  Cementisti  CMC  di Ravenna and  Impresa  Pizzarotti  &  C.
Spa,    working  together  with  Siemens  A.G.,  Sulzer  Hydro  Ltd.,
Black  &  Veatch  and  Colenco Power Engineering Ltd.  (collectively,
the "Replacement Contractor").

On  August  6,  1997,  CE Casecnan announced that  it  had  issued  a
notice  to  proceed to the Replacement Contractor.   The  Replacement
Contractor   was  already  on  site  and  had  fully  mobilized   and
commenced  engineering,  procurement and  construction  work  on  the
project.

In  connection  with  the  Hanbo  Contract  termination  CE  Casecnan
tendered  four  certificates of drawing to Korea First  Bank  ("KFB")
under  the  irrevocable standby letter of credit  issued  by  KFB  as
security  under  the  Hanbo Contract to pay  for  certain  transition
costs   and   other  then  ascertainable  damages  under  the   Hanbo
Contract.   As  a  result  of KFB's wrongful  dishonor  of  the  draw
request, CE Casecnan filed an action in New York State Court.

On  April  17,  1998, CE Casecnan announced that it and Hanbo,  HECC,
Hanbo  Steel  Company,  Ltd. and KFB mutually agreed  to  settle  the
differences  among  them  related to  the  Casecnan  Project.   Under
the  settlement,  KFB  agreed  to pay CE  Casecnan  $90,000  and  the
parties  have  discontinued with prejudice  the  pending  arbitration
and   litigation  proceedings  and  released  each  other  from   all
claims   arising   out  of  the  litigation  and   arbitration.    In
accordance   with   the  terms  of  such  settlement,   CE   Casecnan
received  $10,000  from  KFB  on April 17,  1998  and  the  remaining
$80,000, including interest, on July 3, 1998.  The receipt of the $10,000
and the accrual of the receivable for the remaining $80,000 were included
in accounts payable and accrued expenses, pending final determination
of actual transition costs and damages incurred by the Company.
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            (in thousands, except per share amounts)
                ________________________________

Results of Operations:

The  Company  is  in the construction stage and has not  yet  started
commercial  operations.  Revenue  consists  of  interest  income   on
cash   received   from   bond  proceeds  and  equity   contributions.
Revenue  decreased  in  the second quarter of  1998  to  $4,960  from
$5,914  in  the same period in 1997, a 16.1% decrease.  For  the  six
months  ended  June  30,  1998, revenue  decreased  to  $10,044  from
$10,418,  a  3.6% decrease.  These decreases are primarily  a  result
of lower cash balances due to construction draws.

Interest   expense  in  the  second  quarter  of  1998  was   $11,500
compared  to  $11,469  for the same period  in  1997.   For  the  six
months  ended  June 30, 1998 and 1997, interest expense  was  $23,044
and  $22,911,  respectively.   Capitalized  interest  in  the  second
quarter  1998  increased to $6,534 from $2,280 for  the  same  period
in  1997,  a  186.6%  increase.  For the six months  ended  June  30,
1998,  capitalized  interest increased to  $12,112  from  $4,026  for
the  same  period  in  1997,  a 200.8% increase.   The  increases  in
capitalized   interest  result  from  higher  cumulative  development
and  construction costs.  Amortization of bond issue  costs  for  the
three  and  six month periods ended June 30, 1998 was $295  and  $589
respectively,  compared  to $264 and $527 for  the  same  periods  in
1997.   Interest  expense, capitalized interest and  amortization  of
bond  issue  costs  relate to the notes and bonds payable  issued  by
the Company in the fourth quarter of 1996.

Liquidity and Capital Resources:

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

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

The   Securities  are  subject  to  certain  optional  and  mandatory
redemption  schemes  as  defined in the  Indenture.   The  Securities
contain  customary  events  of  default  and  restrictive  covenants.
<PAGE>
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            (in thousands, except per share amounts)
                ________________________________

Liquidity and Capital Resources (continued):

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

On  August  6,  1997,  CE Casecnan announced that  it  had  issued  a
notice  to  proceed to the Replacement Contractor.   The  Replacement
Contractor   was  already  on  site  and  had  fully  mobilized   and
commenced  engineering,  procurement and  construction  work  on  the
project.

In  connection  with  the  Hanbo Contract  termination,  CE  Casecnan
tendered  four  certificates of drawing to Korea First  Bank  ("KFB")
under  the  irrevocable standby letter of credit  issued  by  KFB  as
security  under  the  Hanbo Contract to pay  for  certain  transition
costs   and   other  then  ascertainable  damages  under  the   Hanbo
Contract.  As  a  result  of  KFB's wrongful  dishonor  of  the  draw
request, CE Casecnan filed an action in New York State Court.

On  April  17,  1998, CE Casecnan announced that it and Hanbo,  HECC,
Hanbo  Steel  Company,  Ltd. and KFB mutually agreed  to  settle  the
differences  among  them  related to  the  Casecnan  Project.   Under
the  settlement,  KFB  agreed  to pay CE  Casecnan  $90,000  and  the
parties  have  discontinued with prejudice  the  pending  arbitration
and   litigation  proceedings  and  released  each  other  from   all
claims   arising   out  of  the  litigation  and   arbitration.    In
accordance   with   the  terms  of  such  settlement,   CE   Casecnan
received  $10,000  from  KFB  on April 17,  1998  and  the  remaining
$80,000, including interest, on July 3, 1998.

The Company has commenced, for all of its information systems, a year 
2000 date conversion project to address all necessary code changes, 
testing and implementation.  The "Year 2000 Computer Problem" creates
risk for the Company from unforeseen problems in its own computer
systems and from third parties with whom the Company deals on financial
transactions worldwide.  Such failures of the Company's and/or third 
parties' computer systems could have a material impact on the Company's 
ability to conduct its business, and especially to process and account
for the transfer of funds electronically.  Management believes that it 
will substantially complete the year 2000 implementation before 
January 1, 2000 and that the related costs and potential effect should
not have a material financial impact on the Company.
<PAGE>
CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                

PART II - OTHER INFORMATION


Item 1 -  Legal proceedings.

     See Note 3 Commitments and Contingencies and Liquidity and 
     Capital Resources.

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:

     Exhibit 27 - Financial Data Schedule

  (b)  Reports on Form 8-K:

     (i)   The Company filed a Current Report on Form 8-K dated April
       8, 1998 reporting the New York Appellate Court order for Korea
       First Bank to honor draws on an irrevocable standby letter  of
       credit issued by Korea First Bank for the benefit of the Company.
     (ii)  The Company filed a Current Report on Form 8-K dated
       April 17, 1998 reporting settlement with Korea First Bank, Hanbo
       Corporation, Hanbo Engineering & Construction Company, Ltd. and
       Hanbo Steel Company, Ltd.
<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:   August  13,  1998   /s/ Craig M. Hammett
                            Craig M. Hammett
                            Senior Vice President and Chief Financial Officer


                            /s/  Patrick J. Goodman
                            Patrick J. Goodman
                            Vice President,
                            Chief Accounting Officer & Controller