EXHIBIT NO. 10.168


                    AMENDED AND RESTATED
                   JOINT VENTURE AGREEMENT


                           BETWEEN


         HIMAL INTERNATIONAL POWER CORPORATION LTD.,


                       PANDA OF NEPAL,


                        RDC OF NEPAL


                             and


              INTERNATIONAL FINANCE CORPORATION


                      KATHMANDU, NEPAL

                      TABLE OF CONTENTS


                                                        Page


SECTION 1.  DEFINITIONS                                   1

SECTION 2.  FORMATION OF THE COMPANY                      6

SECTION 3.  MAIN OBJECTIVES                               7

SECTION 4.  ROLES OF THE PARTIES                          7

SECTION 5.  ARTICLES OF ASSOCIATION                       7

SECTION 6.  SHARE CAPITAL                                 8

SECTION 7.  TRANSFER OF SHARES                            9

SECTION 8.  PRE-EMPTIVE RIGHTS                           10

SECTION 9.  GENERAL MEETINGS OF SHAREHOLDERS             11

SECTION 10. PROCEEDINGS AT GENERAL MEETINGS              14

SECTION 11. VOTE OF SHAREHOLDERS                         15

SECTION 12. DECISIONS                                    15

SECTION 13. DIRECTORS                                    21

SECTION 14. CHIEF EXECUTIVE OFFICER                      22

SECTION 15. STATUTORY AUDITOR                            22

SECTION 16. LOAN/WORKING CAPITAL                         23

SECTION 17. FISCAL PERIOD                                23

SECTION 18. FINANCIAL PERIOD                             23

SECTION 19. ACCOUNTING PRACTICES                         23

SECTION 20. PAYMENT AND TAX MATTERS                      24

SECTION 21. NON-ASSIGNABILITY                            25

SECTION 22. EFFECTIVE DATE                               25

SECTION 23. DURATION                                     25

SECTION 24. TERMINATION                                  26

SECTION 25. MODIFICATION                                 26

SECTION 26. GOVERNING LAW                                26

SECTION 27. ARBITRATION                                  26

SECTION 28. NON-COMPETITION                              28

SECTION 29. FUTURE PROJECT DEVELOPMENT                   28

SECTION 30. CONFIDENTIALITY                              29

SECTION 31. CORRUPT PRACTICES                            29

SECTION 32. FORCE MAJEURE                                30

SECTION 33. APPROVAL AND LICENSE                         30

SECTION 34. LANGUAGE                                     30

SECTION 35. NOTICE                                       30



                    AMENDED AND RESTATED
                   JOINT VENTURE AGREEMENT

                          PREAMBLE

WHEREAS Himal International   Power   Corporation    Ltd.
          (hereafter  referred  to as  "HIPC")  is  a  power
          generation and distribution Company established in
          Nepal  having  its  office at Soaltee  Hotel  Ltd.
          Tachachal, Kathmandu, Nepal.

WHEREAS Panda  of Nepal (hereafter referred to as "PANDA  OF
          NEPAL")  is  a  power generation and  distribution
          Company  established in Cayman Islands, and  is  a
          subsidiary of Panda Energy International, Inc.,  a
          Texas  (USA)  corporation, having  its  registered
          office  at  c/o Maples and Calder, P.O.  Box  309,
          Ugland  House, South Church Street, Grand  Cayman,
          Cayman Islands.

WHEREAS RDC  of  Nepal  (hereafter referred to  as  "RDC  OF
          NEPAL")  is  a  power generation and  distribution
          Company established in Cayman Islands and a having
          its  registered office at c/o W.S. Walker  &  Co.,
          lst Floor, Caledonian House, Mary Street, P.O. Box
          265  G, George Town, Grand Cayman, Cayman Islands,
          is    a   subsidiary   of   Resource   Development
          Consultants,  a  Wyoming (USA)  limited  liability
          company.

WHEREAS International    Finance   Corporation    (hereafter
          referred   to   as  "IFC")  is  an   international
          organization established by Articles of  Agreement
          among  its member countries having its offices  at
          2121  Pennsylvania Avenue, N.W., Washington,  D.C.
          20433, USA.

WHEREAS The Parties hereto have decided to establish a Joint
          Venture Company limited by shares through which to
          achieve  their objective of hydropower  generation
          at the Upper Bhote Koshi site, in Nepal, for which
          HIPC has already received the license.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:


SECTION 1.     DEFINITIONS

          "ACT"  means  the Company Act, as in  effect  from
          time to time, including any amendments thereto;

          "AFFILIATE(S)"  shall mean any  person  or  entity
          that  directly or indirectly (through one or  more
          intermediaries)  controls or is controlled  by  or
          under  common  control with the  Party  specified.
          For  purposes  of this definition,  control  of  a
          person  or  entity  means  the  power,  direct  or
          indirect,  to cause or determine the direction  of
          the  management  and policies of  such  person  or
          entity   (whether  by  ownership  of   securities,
          contract or otherwise);

          "AGREEMENT" means this Amended and Restated  Joint
          Venture  Agreement  dated as of Financial  Closing
          Date between Nepali Party and Foreign Parties;

          "ARTICLES" means the Amended and Restated Articles
          of  Association of the Company and amendments made
          thereto from time to time;

          "BUSINESS  DAY" shall mean any Day  on  which  the
          offices  of  HMGN  are  not closed  in  Kathmandu,
          Nepal;

          "COMPANY" means Bhote Koshi Power Company  Private
          Limited  incorporated under the Company Act,  2021
          (1964);

          "CONCERNED  DEPARTMENT" means  the  Department  of
          Industries, office of the Company Registrar or any
          other department or office designated by HMGN from
          time to time to regulate companies in Nepal;

          "DAY"  shall  mean  the  twenty-four  hour  period
          beginning at 0:00 hours Nepalese Standard Time;

          "DEG"  shall  mean DEG-Deutsche Investitions-  und
          Entwicklungsgesellschaft mbH, a company  organized
          and   existing  under  the  laws  of  the  Federal
          Republic of Germany;

          "DEG INVESTMENT AGREEMENT" shall mean the DEG
          Investment Agreement dated as of the Closing Date
          between the Company and DEG and shall include the
          DEG Special Conditions and the General Conditions;

          "DEG LOAN" shall mean the loan specified in
          Section 3.1 (a) of the DEG Special Conditions or,
          as the context may require, the principal amount
          thereof from time to time outstanding;

          "DEG  SPECIAL  CONDITIONS"  shall  mean  the   DEG
          Special  Conditions dated as of the  Closing  Date
          between the Company and DEG;

          "DIRECTOR(S)" means the Director(s)  appointed  by
          the   Shareholders  pursuant  hereto  and  holding
          office from time to time as Director(s);

          "DIVIDEND" means a distribution of the profits  of
          the Company;

          "DOCUMENT" means words represented in the form  of
          type, printing or handwriting;

          "FINANCIAL CLOSING DATE" means the date  on  which
          IFC makes an initial disbursement;

          "FINANCIAL  YEAR"  means  the  period  between   1
          January and ending 31 December for the purpose  of
          United States and other foreign tax laws;

          "FISCAL  YEAR" means the fiscal year  pursuant  to
          the laws of Nepal applying to a Nepali Company  to
          keep  its financial accounts and to file  its  tax
          returns;

          "FOREIGN  PARTIES"  collectively,  means  RDC   OF
          NEPAL, a Cayman Islands corporation and subsidiary
          of  Resource  Development Consultants,  a  limited
          liability  company,  of  Wyoming,  United  States,
          PANDA  OF  NEPAL,  a subsidiary  of  Panda  Energy
          International,  Inc.,  a  Texas,   United   States
          corporation,    and    IFC,    an    international
          organization,  which are parties to the  Agreement
          and  "Foreign  Party" means any of  the  foregoing
          individually;

          "GENERAL  CONDITIONS" shall  mean  the  Investment
          Agreement  General  Conditions  dated  as  of  the
          Closing Date, among the Company, IFC and DEG;

          "GOVERNMENTAL  AUTHORITY"  means  the   Investment
          Promotion  Board of HMGN and such relevant  agency
          or  department  of  HMGN  designated  to  regulate
          foreign  investment  in Nepal  including,  without
          limitation,   the  Department  of  Industries   of
          HMG/Nepal;

          "HMGN"  shall  mean  His Majesty's  Government  of
          Nepal, its agencies or departments;

          "IFC" means International Finance Corporation,  an
          international organization established by Articles
          of Agreement among its member countries;

          "IFC  INVESTMENT  AGREEMENT" shall  mean  the  IFC
          Investment Agreement dated as of the Closing  Date
          between the Company and IFC and shall include  the
          IFC Special Conditions and the General Conditions;

          "IFC  LOANS"  means loans made by IFC pursuant  to
          the nvestment Agreement IFC Special Conditions;

          "IFC  SHARES"  means Shares of the Company  to  be
          acquired   by  IFC  pursuant  to  the   Investment
          AgreementIFC Special Conditons;

          "IFC  SPECIAL  CONDITIONS"  shall  mean  the   IFC
          Special Conditions dated as of___ the Closing Date
          between the Company and IFC;

          "INTERNAL REVENUE CODE" means the Internal Revenue
          Code of the United States;

          "INVESTMENT AGREEMENT" shall mean and include  the
          IFC     Investment     Agreement     dated      as
          of_______________, 1997 the Closing Date,  between
          the   Company  and  IFC  and  the  DEG  Investment
          Agreement dated as of the Closing Date between the
          Company  and  DEG; means the Investment  Agreement
          dated  as  of  Financial Closing Date between  the
          Company and IFC;

          "LIENS"   shall   mean   any   mortgage,   pledge,
          hypothecation,  assignment,  deposit  arrangement,
          encumbrance,    lien   (statutory    or    other),
          preference,  priority or other security  agreement
          of   any  kind  or  nature  whatsoever  including,
          without  limitation, (i) any conditional  sale  or
          other title retention agreement, any financing  or
          similar  statement  or  notice  filed  under   any
          recording or notice statute, and any lease  having
          substantially  the  same  effect  as  any  of  the
          foregoing,  and  (ii) any designation  (except  as
          comtemplated by the Investment Agreement) of  loss
          payees or beneficiaries or additional insureds  or
          any   similar  arrangement  under  any   insurance
          policy;

          "LOANS"  shall mean and include the IFC Loans  and
          the DEG Loan;

          "MEMORANDUM"  means the Memorandum of  Association
          of the Company;

          "NEA"  means  the Nepal Electricity Authority  and
          its successors and assigns;

          "NEPALI  PARTY"  means Himal  International  Power
          Corp. Ltd., a party to the Agreement;

          "OFFICE"  means  the  registered  office  of   the
          Company;

          "PARTIES" means the parties to this Agreement  and
          each of their assigns and "Party" means any of the
          foregoing individually;

          "POWER   PURCHASE  AGREEMENT"  means   the   Power
          Purchase Agreement dated July 21, 1996 between the
          NEA  and  the  Company  concerning  the  sale   of
          electrical  energy  from the Project,  as  amended
          from time to time;

          "PROJECT"  means  the  36 MW  hydroelectric  power
          generation facility known as the Upper Bhote Koshi
          Hydroelectric Project to be located on  the  Bhote
          Koshi  River  in  the  Sindhupalchok  District  of
          Nepal;

          "PROMOTER"  means  the  Shareholders  signing  the
          application  for the registration of the  Company,
          the  Memorandum and the Articles (which shall  not
          include IFC);

          "PROXY" means the duly appointed representative of
          a  Shareholder to attend and vote in  any  General
          Meeting of the Company;

          "REGISTER"  means the register of the Shareholders
          maintained by the Company;

          "SCHEDULE  A"  means the definitions  included  in
          Schedule  A  to  the Investment  Agreement  as  in
          effect on the Financial Closing Date;

          "SHARE(S)"  means the share(s)  with  a  value  of
          Rupees  100  each  in  the share  capital  of  the
          Company from time to time;

          "SHAREHOLDER" means a person whose name  has  been
          registered  in the Register of the  Company  as  a
          Shareholder;

          "SHARE  RETENTION  AND  PROJECT  FUNDS  AGREEMENT"
          means  the  Share  Retention  and  Projects  Funds
          Agreement, dated as of _________, 1997, among  the
          Company,  Panda Energy International, Inc.,  Harza
          Engineering    Company    International,     Harza
          Engineering  Company  International  L.P.,   Himal
          International Power Corporation Pvt. Ltd., Soaltee
          Enterprises  Private  Ltd.,  Soaltee  Hotel  Ltd.,
          Surya Enterprises Private Ltd., Panda Bhote Koshi,
          Resource Development Consultants, Panda of  Nepal,
          RDC of Nepal, IFC, and DEG;

          "'SPECIAL   RESOLUTION"  means  a  resolution   as
          required  under  Section 68 of  the  Company  Act,
          1997;

          "SPECIFIED   PROPORTION(S)"   means,   prior    to
          Financial Closing Date, where the whole  is  100%:
          in  relation to Nepali Party, 10%; and in relation
          to  Foreign Parties, 85% to PANDA OF NEPAL and  5%
          to RDC OF NEPAL; and after Financial Closing Date,
          where  the  whole is 100%: in relation  to  Nepali
          Party, 10% and in relation to Foreign Parties, 75%
          to  PANDA OF NEPAL, 5% to RDC OF NEPAL and 10%  to
          IFC  or  any  of  its transferees (and  subsequent
          transferees),  unless  otherwise  agreed   to   in
          writing  between Nepali Party and Foreign  Parties
          or adjusted pursuant to this Agreement;

          "UNITED STATES" or "U.S." means the United  States
          of America.

          Words  in  singular  include  the  plural.   Words
          signifying a gender also signify any other gender.
          Persons   include  bodies  corporate   and   other
          association  of  persons.  Interpretation  of  the
          words  other than words mentioned above  shall  be
          done  in  accordance with the meaning ascribed  to
          them in the Agreement.


SECTION 2.     FORMATION OF THE COMPANY

          2.1  The  Parties immediately upon this  Agreement
               becoming  effective, agree  to  continue  the
               Company    which    has    been    previously
               established, which will be jointly  owned  by
               the Parties.

          2.2  The  name of the Company shall be BHOTE KOSHI
               POWER COMPANY PRIVATE LIMITED.

          2.3  The  head  office  of the  Company  shall  be
               located  at  Kathmandu, Nepal;  branches  and
               other   business  offices,   etc.,   may   be
               established anywhere as required, except that
               under  no circumstances may a branch or other
               business  office,  etc., be  located  in  the
               United States.

          2.4  The   Parties   hereto  shall   consult   and
               cooperate   with  each  other   as   to   the
               procedures and particulars required  for  the
               establishment   and   registration   of   the
               Company.


SECTION 3.     MAIN OBJECTIVES

          The main objectives of the Company shall be as
          follows:

          3.1  To  develop,  construct, own and operate  the
               Upper Bhote Koshi Hydroelectric Project.

          3.2  To  sell the generated power to the NEA, HMGN
               or   its  representatives,  or  directly   to
               consumers both local and foreign, and others.

          3.3  To build transmission lines to transmit power
               from  the  Upper  Bhote  Koshi  Hydroelectric
               Project to the NEA power grid or other points
               of  supply whether through the NEA system  or
               otherwise.


SECTION 4.     ROLES OF THE PARTIES

          4.1  Subject to the Articles, PANDA OF NEPAL shall
               be  the  lead  developer of the  Project  and
               shall be responsible to the Shareholders  for
               the  day-to-day operation and  management  of
               the Project and the Company.

          4.2  Subject  to the Articles and pursuant  to  an
               engineering   services   contract,   to    be
               negotiated and executed between RDC OF  NEPAL
               or  its  Affiliates and the Company,  RDC  OF
               NEPAL,  or  one  or more of  its  Affiliates,
               shall  be  retained  as the  Project  owner's
               engineer.

          4.3  Subject  to the Articles, HIPC shall use  its
               best efforts to provide the Project with  its
               essential  expertise,  including,   but   not
               limited  to: (i) obtaining local and  central
               government  permits, licenses  and  approvals
               for the Project and (ii) serving as the local
               business  liaison  for the  Project  and  the
               Parties.


SECTION 5.     ARTICLES OF ASSOCIATION

          The  Company's Articles shall be as agreed  to  by
          the  Parties hereto and approved by the Office  of
          Company  Registrar.  If any discrepancy  is  found
          between  this  Agreement  and  the  Articles,  the
          Parties  shall  amend the Articles  to  make  them
          coincide with this Agreement.


SECTION 6.     SHARE CAPITAL

          6.1  The  authorized  share capital  of  the  Company
               shall   be  Rupees  five  billion  four  hundred
               fourteen    million   five   hundred    thousand
               (Rs.  5,414,500,000) divided into one  class  of
               fifty   four   million  one  hundred  forty-five
               thousand (54,145,000) Shares of Rupees 100 each.
               The  initial issued share capital of the Company
               shall  be Rupees two billion (Rs. 2,000,000,000)
               divided into twenty million (20,000,000)  Shares
               of  Rupees 100 each and that shall be subscribed
               for  by the parties in Specified Proportions  as
               applicable prior to Financial Closing Date.  The
               initial  issued capital shall be  subscribed  by
               Foreign Parties and Nepali Party.

          6.2  Subject  to Section 6.6, the shareholding  ratio
               shall   at   all  times  be  in  the   Specified
               Proportions except that it may be changed by the
               mutual  written  agreement of Nepali  Party  and
               Foreign Parties subject to the approval  of  the
               Concerned Department.

          6.3  Subject  to the transfer restrictions set  forth
               in  Section 7 and subject to Section 6.6, shares
               held  by an Affiliate of the Nepali Party or  an
               Affiliate of the Foreign Parties shall be deemed
               to  be Shares held by that party for the purpose
               of determining the Specified Proportions.

          6.4  Subject   to   Section  6.6,  the   issued   and
               subscribed share capital of the Company shall be
               held in the Specified Proportions.  In addition,
               it  is  envisaged  that local and  international
               financial  institutions  may  subscribe  to  the
               share   capital  of  the  Company.   Except   as
               expressly set forth herein or in the Articles of
               the   Company,   any   local  or   international
               financial  institutions which subscribe  to  the
               share  capital of the Company shall be  required
               to  comply  with  all  requirements  imposed  on
               Shareholders by this Agreement and the  Articles
               of the Company.

          6.5  Subject  to Section 6.6, the percentage  initial
               subscribed share capital of the Company shall be
               subscribed in the following percentages:

                    HIPC:                  10%
                    PANDA OF NEPAL:        85%
                    RDC OF NEPAL:           5%

          6.6  In  the event that any Party does not contribute
               its  portion of the issued and subscribed  share
               capital  of  the  Company as  required  by  this
               Agreement,  the Articles and in accordance  with
               the  procedures set forth in the Act, each other
               Party  shall have the right to fund that portion
               of  the  share  capital in  proportion  to  each
               Party's ownership interest.

          6.7  The Parties shall pay in cash (which shall be
               in  the  form  of US dollars for the  Foreign
               Parties and shall be in US dollars or  Rupees
               for the Nepali Party as permitted by HMGN  or
               applicable  law),  kind  or  services.   Cash
               contributions of share capital shall be  made
               to   the   Company  through  proper   banking
               channels.


SECTION 7.     TRANSFER OF SHARES

          7.1  The  right to Shares of the Company may  only
               be   transferred  in  accordance   with   the
               provisions   of   this  Agreement   and   the
               Articles.

          7.2  No  Shareholder shall transfer its Shares  to
               any  person  who is not already a Shareholder
               without  the  prior written  consent  of  all
               other  Shareholders,  which  consent  may  be
               withheld  in the sole and absolute discretion
               of  all other Shareholders; provided however,
               that  nothing in this Section 7 or  elsewhere
               in  this  Agreement shall limit the right  of
               IFC  or any of its transferees (or subsequent
               transferees) to transfer any of its Shares in
               the Company.

          7.3  For  purposes  of  these  Articles  the  term
               "transfer" means, with respect to  any  Share
               of  the Company or any interest therein,  the
               transfer, sale, assignment or mortgage of the
               Share  or  any interest therein, the creation
               or permission to subsist of any pledge, lien,
               charge  or other encumbrance with respect  to
               the  Share or any interest therein, the grant
               of  any option, interest or other rights with
               respect to the Share or any interest therein,
               or  any other disposition of the Share or any
               interest  or rights in the Share or any  part
               thereof.

          7.4  No  transfer  or  purported  transfer  by   a
               Shareholder of any Share in violation of  the
               restriction in Section 7.2 shall be effective
               to   confer  upon  the  purported  transferee
               rights  (i)  to  receive dividends,  (ii)  to
               receive  a  share of the net  assets  of  the
               Company  upon its winding up, (iii) otherwise
               to   participate  in  distributions  of   the
               property  or assets of the Company,  (iv)  to
               receive  notice of meetings of  the  Company,
               (v)  to attend meetings of the Company,  (vi)
               to  vote  on any matter, or (vii) to  receive
               new Shares.  Further, any person who receives
               Shares  in  violation of the  restriction  in
               Section  7.2 shall be obliged within 30  days
               of receiving such Shares to offer to transfer
               the  Shares to the remaining Shareholders  of
               the Company in the Specified Proportions, and
               the  remaining Shareholders shall be entitled
               to purchase the Shares offered to them by the
               purported  transferee at a price agreed  upon
               by the Parties.

          7.5  Any  person who receives Shares in a transfer
               which complies with the requirements in  this
               Agreement  and the Articles shall  submit  to
               the other Parties of the Agreement and to the
               office  of  the  Company a  written  deed  of
               adherence  in the form annexed at Annexure  1
               of this Agreement stating that the transferee
               agrees to be governed by all of the terms and
               provisions of the Agreement, the Articles and
               the  obligations of the Party  from  whom  it
               purchased  the Shares, along with a  copy  of
               the  deed  to record the transfer or mortgage
               of such Shares.

          7.6  The  notifications of intention  to  transfer
               Shares,  the  terms  and  conditions   of   a
               proposed  transfer, and the decision  by  the
               remaining  Shareholders  either  to  purchase
               Shares or to consent to their transfer  to  a
               person who is not a Shareholder shall be done
               in writing.  It is understood and agreed that
               IFC   and  its  transferees  (and  subsequent
               transferees)   are   not   bound   by    this
               Section 7.6.

          7.7  Any  Shares  transferred under  this  Section
               shall  be  subject  to  necessary  government
               validation or approval in Nepal, if required.


SECTION 8.     PRE-EMPTIVE RIGHTS

          8.1  The  Parties  hereto shall  have  pre-emptive
               rights  in proportion to the number of Shares
               held by each of them with respect to any  new
               issuance  of shares of the Company.  However,
               upon the consent of all Shareholders, the pre-
               emptive  rights may be exercised in  a  ratio
               other    than    the   Shareholding    ratio,
               particularly  in the case of a  disinvestment
               by an existing Party.

          8.2  If  any  Party does not wish to exercise  its
               pre-emptive rights in whole or in part,  such
               Party  shall notify the Shareholders of  such
               intention  within forty-five (45)  days  from
               the  day of notice that new Shares have  been
               offered.   In  this case, the  other  Parties
               shall  have  the pre-emptive  right  to  such
               unsubscribed new shares.

          8.3  New  Shares  to  which none of  the  Partners
               hereto     have    subscribed    shall     be
               preferentially allocated to persons who  have
               agreed  to  accept  all  of  the  terms   and
               conditions   hereunder,   pursuant   to   the
               conditions set by the Shareholders.


SECTION 9.     GENERAL MEETINGS OF SHAREHOLDERS

          9.1  ANNUAL GENERAL MEETING

               a.    The  Annual  General  Meetings  of  the
               Company  shall  discuss the Company's  profit
               and  loss  account, cash flow of the  Company
               balance sheet and the report of the Board  of
               Directors   and   the   auditors,   fix   the
               remuneration   of   the   auditors,   declare
               dividends and perform all other work  of  the
               General Meeting.

               b.   The first Annual General Meeting of  the
               Company  shall  be convened within  one  year
               from  the  date  of  the Preliminary  General
               Meeting   and  every  other  Annual   General
               Meeting shall be convened within a period  of
               six months from the date of the expiry of the
               Fiscal Year of the Company.

               c.    The  Annual  General  Meetings  of  the
               Company shall be held in Kathmandu, Nepal  or
               such  other  place  as the  Shareholders  may
               decide  except  that under  no  circumstances
               shall  an Annual General Meeting be  held  in
               the United States.

          9.2. EXTRAORDINARY GENERAL MEETING

               a.   Both  the Concerned Department  and  any
               Shareholder or Shareholders holding at  least
               10%  in  the  aggregate  of  all  issued  and
               outstanding  Shares may submit an application
               to  the registered office of the Company  for
               the  convening  of  an Extraordinary  General
               Meeting  whenever they deem  necessary.   The
               power  of the Board of Directors to  call  an
               Extraordinary   General  Meeting   shall   be
               limited   to   calling  those   Extraordinary
               General    Meetings   which   the   Concerned
               Department or the Shareholders have requested
               pursuant to this Section.

               b.  An Extraordinary General Meeting shall be
               held  in Kathmandu, Nepal or such other place
               as  the  Shareholders may decide except  that
               under no circumstances shall an Extraordinary
               General Meeting be held in the United States.

          9.3  NOTICE PERIOD

               Every  General  Meeting of  the  Shareholders
               shall   be  convened  by  issuing  a   notice
               specifying the place, date and agenda of  the
               meeting  in advance.  In accordance with  the
               Act, the notice period for the Annual General
               Meetings shall be thirty (30) days and  shall
               be  thirty  (30) days for all  other  General
               Meetings or as otherwise required by the Act.
               The  days in the notice period may be reduced
               by unanimous consent of the Shareholders. The
               notice  of  the  General  Meetings  shall  be
               served  according to the Act and Articles  to
               such  persons who have the right  to  receive
               it.

          9.4  EX-AGENDA ITEMS

               At  a  General Meeting convened in accordance
               with  the  Act,  Shareholders may  also  make
               decisions  on  matters not mentioned  in  the
               agenda which had been sent while calling  the
               meeting  provided  that  two  thirds  of  the
               Shareholders  attending the meeting  vote  in
               favor of discussing such matters.

          9.5  QUORUM FOR GENERAL MEETING

               a.   The  proceedings of any General  Meeting
               shall  not  be conducted nor a resolution  be
               passed   unless  25%  of  total   number   of
               Shareholders  representing 67% of  the  total
               value  of  Shares of the Company are  present
               therein   either  in  person  or  by   proxy;
               provided  that the presence of at  least  two
               Shareholders shall be compulsory for  holding
               a General Meeting in that manner.

               b.   In  case the meeting cannot be held  for
               lack  of  quorum,  another meeting  shall  be
               convened  with an advance notice of at  least
               fifteen  (15) days.  In case another  meeting
               is   convened   in   this   manner   if   two
               Shareholders  of the Company,  who  represent
               51%  of the total value of Shares and who are
               entitled to vote are present there in person,
               there  shall  be no obstacle in  holding  the
               meeting.  If within half an hour of the  time
               appointed, such meeting still cannot be  held
               due  to  inadequate quorum, the same  meeting
               shall stand adjourned to the same day in  the
               next  week  at the same time and place.   The
               presence  of  15%  of  the  total  number  of
               Shareholders  representing 51% of  the  total
               value  of  Shares  at such adjourned  meeting
               either in person or by proxy shall constitute
               a quorum.  Notwithstanding anything contained
               herein  before,  the Company  shall  have  to
               recognize  such resolutions as are passed  at
               such a meeting and act accordingly.

               c.   A Special Resolution shall not be passed
               unless   33%   of   the   total   number   of
               Shareholders  representing 75% of  the  total
               value  of Shares are present either in person
               or by proxy.

               d.   The quorum for holding an Annual General
               Meeting  shall  be  as  prescribed   by   the
               Articles.  However, it will be necessary  for
               one representative of each Shareholder to  be
               present  at such a meeting for the quorum  to
               be complete.  If a meeting is adjourned as  a
               result  of  such  representative  not   being
               present,  then notwithstanding the provisions
               of  this clause, the meeting shall be held at
               the   next  appointed  date  even   if   such
               representative is not present  but  provided,
               the requirement of quorum as per this Section
               9.5 is met.

          9.6  PROXY

               Shareholders   desirous   of   nominating   a
               representative shall have to submit  a  proxy
               letter as prescribed in the Articles.

          9.7  ELECTION OF CHAIRPERSON

               The  Chairperson  of the Board  of  Directors
               shall  chair  the General Meeting  if  he  is
               present  and in his absence, the Shareholders
               present  at  a  General Meeting shall  elect,
               according      to     their     proportionate
               shareholding,  by  majority  one  Shareholder
               present  to  preside  as Chairperson  of  the
               meeting.

          9.8  RESOLUTIONS

               All  matters  to be discussed at the  General
               Meeting  shall be presented in  the  form  of
               resolutions.  Except as provided  in  Section
               12,  all other resolutions presented  at  the
               meeting  shall be deemed to have been  passed
               if  a simple majority of Shareholders present
               at  the  meeting,  whether in  person  or  by
               proxy,  vote in its favor, provided  that  in
               the case of a Special Resolution, it shall be
               deemed   to  have  been  passed  if  75%   of
               Shareholders present at the meeting,  whether
               in person or by proxy, vote in its favor.


SECTION 10.    PROCEEDINGS AT GENERAL MEETINGS

          10.1 The  Shareholders shall at all times regulate
               the  authorized  business of the  Company  by
               exercising control, supervision and direction
               in  the manner deemed appropriate by them and
               by delegating such powers, from time to time,
               to the Board of Directors as the Shareholders
               deem appropriate.  The power of managing  the
               Company  shall be vested in the  Shareholders
               solely in their capacity as Shareholders.

          10.2 Without   prejudice  to  the  above-mentioned
               general arrangements, the Shareholders  in  a
               General  Meeting  shall  have  the  following
               powers and responsibilities:

               a.   To  arrange for payment of all  expenses
               incurred    for    the   establishment    and
               registration  of  the  Company,  and  approve
               agreements  concluded before the  Company  is
               formally established.

               b.    To   appoint  and  remove  consultants,
               advisors,  technicians, assistants and  other
               employees.

               c.   To manage and supervise all functions of
               the    Company   and   make   all   necessary
               arrangements   for   smoothly   running   the
               business  of  the  Company  including  taking
               loans and advances.

               d.   To  execute and sign contracts on behalf
               of the Company.

               e.   To  operate bank accounts and  issue  or
               endorse bills of exchange, promissory  notes,
               etc.,  on behalf of the Company, and  buy  or
               sell  Government or other bonds to the extent
               allowed  by law, to accept, sign and deal  in
               bills   of  exchange,  cheques,  drafts   and
               Government securities and issue debentures on
               behalf of the Company.

               f.   To arrange for all documents relating to
               the financial transactions of the Company  to
               be  duly signed by a person designated by the
               Shareholders.

               g.  To exercise powers and fulfill the duties
               prescribed  by the Act, laws, this  Agreement
               and  the Articles as prevailing from time  to
               time.


SECTION 11.    VOTE OF SHAREHOLDERS

          11.1 Subject to Section 9 and to any other special
               rights  or restrictions as to voting attached
               to  any Shares by or in accordance with  this
               Agreement,  every Shareholder who is  present
               either in person or through a duly authorized
               representative shall have one vote for  every
               Share  of  which  he is the holder;  provided
               that no Shares of one party shall confer  any
               right  to  vote  upon  a resolution  for  the
               removal  from office of a Director  appointed
               by holders of Shares of the other Party.

          11.2 Shareholders shall only be entitled  to  vote
               in  accordance with the number of Shares held
               if  all  calls on subscription due  on  those
               Shares are paid.


SECTION 12.    DECISIONS

          The  decisions  listed below shall require  (i)  a
          95.1%  vote  of  all  outstanding  Shares  of  the
          Company prior to the commercial operation date  of
          the Project (such term "Commercial Operation Date"
          shall have the meaning defined in Schedule A)  and
          (ii)  90%  vote of all outstanding Shares  of  the
          Company after the Commercial Operation Date.

        12.1  Any  change  in  the  general  nature  of  the
               business of the Company or any subsidiary and
               any disposal of the undertaking or assets  of
               the Company or of any of its subsidiaries  or
               any  substantial part thereof other  than  in
               the ordinary course of business.

        12.2  Approval  of the remuneration of the President
               of the Company, if one is appointed.

        12.3  Any   transaction,  arrangement  or  agreement
               with  or  for the benefit of any Director  of
               the Company or his relative or any company or
               firm  in  which he is a partner, director  or
               shareholder.

        12.4  Acquisition  or  formation of  any  subsidiary
               company and acquisition of the undertaking or
               the  whole or part of the assets of any other
               company or business which in relation to  the
               Company's business is substantial.

        12.5  The  conduct  of any business by  the  Company
               other than as contemplated under the Articles
               or other governing documents of the Company.

        12.6  Incurrence  of  any indebtedness for  borrowed
               money  in excess of Rs. 10,000,000 including,
               without   limitation,   approval    of    all
               development,   construction   and   permanent
               financing arrangements for the Project.

        12.7  Increase,  other than by way of  bonus  issue,
               or  reduction, or other alteration whatsoever
               in  the authorized or issued Share capital of
               the  Company  or any of its subsidiaries,  or
               any  variation of the rights attached to  any
               of  the  Shares  for the time  being  in  the
               capital  of  the  Company  or  any   of   its
               subsidiaries,  or  the granting  of  any  new
               options to subscribe for Shares or issues  of
               any securities convertible into Shares of the
               Company  or  any  of  its  subsidiaries,   or
               entering into any agreement for the same.

        12.8  Any  issuance  or sale of Shares,  any  voting
               securities  of the Company or any  securities
               of  the  Company  which are  exercisable,  or
               convertible  into  Shares  or  other   voting
               securities of the Company.

        12.9  Any  issuance of any securities of the Company
               having  a  preference  as  to  dividends   or
               distributions whether during the life of  the
               Company or under dissolution, liquidation  or
               winding-up.

        12.10 Any  reorganization, consolidation, merger, or
               other business combination of the Company  or
               any   subsidiary  with  or  into  any   other
               corporation  which is not the  Company  or  a
               wholly-owned subsidiary of the Company.

        12.11 The   sale,  lease  or  exchange  of  all   or
               substantially  all  of  the  assets  of   the
               Company.

        12.12 Any   amendments   or   restatement   of   the
               Articles,  this Agreement or other  governing
               documents of the Company.

        12.13 Any recapitalization of the Company.

        12.14 Any  transaction by the Company with any Party
               to this Agreement, or any Affiliate of any of
               them.

        12.15 The  mortgage  or change of any  part  of  the
               Company's assets.

        12.16 The  acquisition or disposal by the Company of
               any  asset or the giving or receiving of  any
               service otherwise than at market value.

        12.17 The  admission of any new Shareholder  to  the
               Company  subject to the proviso contained  in
               Section 7.2 hereof.

        12.18 The   entering  into  any  purchase,  finance,
               lease,  hire purchase, other credit  sale  or
               deferred  payment  terms  contract   or   any
               contract of acquisition or use of any  assets
               of a capital nature having a value of greater
               in  total than Rs. 5,000,000 in any financial
               year  of  the  Company for which purpose  the
               aggregate payments to be made under any lease
               hire   purchase  or  other  credit  sale   or
               deferred  payment  terms  contract  will   be
               deemed to be payable in the year in which the
               contract is entered into.

        12.19 The  appointment  and removal of  auditors  of

               the Company.



        12.20 The  making  of  any  loans  to  Directors  or
               Shareholders of the Company.

        12.21 The  payment or making of any interim or final
               dividend   or   any  other  distribution   in
               whatever   amount   the   Shareholders   deem
               appropriate.

        12.22 Notwithstanding  the foregoing,  if  prior  to
               the tenth anniversary of Commercial Operation
               Date  (as defined in Schedule A) IFC owns  5%
               or   more  of  the  Shares,  then  except  as
               otherwise prohibited by applicable  law,  the
               Company  shall not take any action  regarding
               the following matters without the affirmative
               vote of IFC;

               i)   any material amendment of the Articles or the
                    Memorandum of the Company or this Agreement, unless
                    expressly permitted by the Shareholders' Agreement among the
                    Company, the Foreign Parties and the Nepali Party,

               ii)  any merger, consolidation, recapitalization or other
                    reorganization of the Company with or into any other person,

               iii) the taking of any corporate or other action by the
                    Company for the (A) commencement of a voluntary winding up
                    under any applicable bankruptcy, insolvency or similar law
                    now or hereafter in effect, (B) consent to the entry of any
                    order for relief in winding up by a court or under the
                    supervision of a court under any such law, (C) consent to
                    the appointment or taking possession by a receiver,
                    liquidator, assignee, custodian, trustee, sequestrator or
                    similar official of the Company or of any substantial part
                    of the property of the Company or (D) making by the Company
                    of a general assignment for the benefit of creditors,

               iv)  any sale, lease, exchange, transfer, pledge,
                    contribution to a joint venture or other disposition of
                    assets resulting in the diminution of assets or other
                    properties, or the incurrence or exposure, contingently or
                    directly, of liability, which individually or in the
                    aggregate would materially impair the ability of the Company
                    to construct, own and operate the plant in accordance with
                    the scope of the Project;

               v)   any transaction between the Company and any Affiliate,
                    any officer or director of the company or any Shareholder
                    (or any Affiliate of any of them), except future arm's
                    length transactions and except the performance of the
                    Principal Documents (as defined in Schedule A), as
                    applicable, in accordance with the terms thereof,

               vi)  any change in the Company's line of business from the
                    Project,

               vii) any change in the line of business of any of HIPC,
                    Panda of Nepal or RDC of Nepal from the holding of Shares in
                    the Company and matters related thereto,

               viii)     the entering into of any contract which
                    individually provides for aggregate payments in excess of
                    $10,000 or together with all other contracts provides for
                    aggregate payments in excess of $100,000 and which is not in
                    the ordinary course of business or is on terms less
                    favorable to the Company than those available in arm's
                    length transactions between unrelated parties, or

               ix)  any expansion of the Project,

               x)   for such time that any portion of the IFC Loans is
                    outstanding or during which IFC has any commitment with
                    respect to the IFC Loans, the appointment of a replacement
                    firm of auditors in the event the firm then engaged resigns
                    its engagement or such engagement is proposed to be
                    terminated by the Company,

               xi)  except as required by the Share Retention and Project
                    Funds Agreement, any (A) increase or reduction in the
                    authorized share capital of the Company, or (B) issuance,
                    sale or reduction by the Company of share capital or
                    securities convertible into, exchangeable for or otherwise
                    granting the right to acquire share capital (including
                    options, warrants and other rights), and

               xii) any creation, grant, incurrence or sufferance of any
                    Liens other than as permitted by the Investment Agreement
                    (except that the affirmative vote of the Director appointed
                    by IFC to the Board of Directors or the affirmative vote of
                    IFC at a meeting of Shareholders shall not be required for
                    the creation of a Lien in connection with the refinancing of
                    the IFC Loans).

        12.23 With  respect to clause (ix) of Section  12.22
               (pertaining to expansion of the Project),  in
               the  event  that IFC, in its  capacity  as  a
               Shareholder,  casts a negative vote  but  all
               other  necessary  votes and corporate  action
               have been taken to enable the Company to take
               the action specified in said clause (ix) were
               it  not for the negative vote of IFC (in  its
               capacity as a Shareholder), then the  Company
               may  give  notice  to IFC  that,  unless  IFC
               changes  its  negative vote to an affirmative
               vote,  the  Company, if  and  to  the  extent
               permitted  by applicable law, will  elect  to
               purchase    IFC's   Shares   (the   "Election
               Notice").  If, within thirty (30) days  after
               IFC receives the Election Notice (such thirty
               (30)  day  period referred to herein  as  the
               "Initial Thirty Day Period"), IFC changes the
               aforesaid  negative vote  to  an  affirmative
               vote,  then  the Company shall not  have  the
               right  to purchase IFC's Shares.  If,  within
               the  Initial Thirty Day Period, IFC does  not
               change  the  aforesaid negative  vote  to  an
               affirmative vote, then the Company, if and to
               the extent permitted by applicable law, shall
               have  the right, which must be exercised  (if
               at  all)  within  sixty (60) days  after  the
               expiration of the Initial Thirty Day  Period,
               to  purchase all (but not less than  all)  of
               IFC's  Shares at a purchase price  per  share
               that  will provide to IFC a return on  equity
               taking  into account dividends paid  and  any
               prior  return of capital, for IFC  of  twelve
               percent  (12%) per annum calculated  for  the
               period  from  the date on which IFC  acquired
               its  Shares  through the date on which  IFC's
               Shares are purchased and measured in constant
               U.S.  Dollars  by adjusting all  U.S.  Dollar
               amounts  by  the  rate of change  during  the
               foregoing  calculation  period  in  the  U.S.
               Consumer Price Index for all urban customers.
               It  is expressly acknowledged and agreed that
               IFC's failure to approve any expansion of the
               Project  in IFC's capacity as a lender  shall
               not  trigger  any rights of  the  Company  to
               purchase  IFC's Shares as set forth  in  this
               Section  12.23.  In the event the Company  is
               not  legally permitted to purchase the Shares
               or  if  the Shareholders (other than IFC)  so
               decide   even  if  the  Company  is   legally
               permitted  to purchase the Shares, the  right
               of   the   Company   contemplated   in   this
               Section 12.23 to purchase all of IFC's Shares
               may  be  exercised by the Shareholders (other
               than  IFC),  pro rata to their then  existing
               holdings   of   Shares  or  in   such   other
               proportion as they may agree.


SECTION 13.    DIRECTORS

          13.1 The  Shareholders of the Company may delegate
               such  administrative and  related  duties  as
               they deem appropriate.  The authority of  the
               Directors shall be limited to the performance
               of   such   duties  as  authorized   by   the
               Shareholders  and  as  may  be  necessary  to
               comply with the provisions of the Act.  In no
               instance   shall  the  Directors   have   the
               authority   to  make  unauthorized   business
               decisions on behalf of the Company.

          13.2 The  Company  shall  have  up  to  seven  (7)
               Directors, four (4) to be appointed by  PANDA
               OF  NEPAL  and one (1) each by RDC OF  NEPAL,
               IFC  and  Nepali  Party.  It  is  agreed  and
               acknowledged  that  IFC  does  not  have   to
               appoint  a  Director  and,  during  any  time
               period  in  which  IFC has  not  appointed  a
               Director, the total number of Directors shall
               be six (6).

          13.3 The  initial Directors shall consist  of  the
               nominees of the subscribers to the Memorandum
               of Association.

          13.4 Each Shareholder may:

               a.   appoint  any  person  to  serve  as  the
               Director(s)  whom it is entitled  to  appoint
               pursuant to Section 13.2; and

               b.    appoint  any  person  to  serve  as  an
               alternate  Director, such alternate  Director
               to   serve  as  Director  in  the  event  the
               Director(s)     appointed     pursuant     to
               Section 13.4(a) becomes unavailable; and

               c.   remove  any  Director  appointed  by  it
               pursuant  to  Section 13.4 (a)  or  (b)  from
               office with or without cause.

          13.5 The  remuneration of the Directors  shall  be
               such sum or sums as may from time to time  be
               determined  by  the Shareholders  in  General
               Meeting.

          13.6 The  Directors  may be paid  such  traveling,
               hotel  and other expenses as may properly  be
               incurred  by them in the execution  of  their
               duties,  including any such expenses incurred
               in   connection  with  their  attendance   at
               General  Meetings or in connection  with  the
               business  of  the  Company  carried  out   in
               accordance with this Agreement.

          13.7 Subject  as herein otherwise provided  or  to
               the terms of any lawful agreement, the office
               of a Director shall be vacated:

               a.   if  he  is found lunatic or  becomes  of

               unsound mind;



               b.   if  by  notice in writing given  to  the
               Company he resigns his office;

               c.   if  he  is  removed  from  office  under
               Section 13.4 (b) hereof; or

               d.   if  he  fails to meet any of  the  other
               qualifications provided in the Act.

          13.8 In the event a Director or alternate Director
               vacates his office under Section 13.7, or  if
               a Director or alternate Director is otherwise
               unable  to  carry out his duties as described
               in  this  Agreement,  the Shareholders  shall
               within  a  reasonable period of time  appoint
               another  person  to  serve  as  Director   or
               alternate Director of the Company as provided
               in  13.4 (a) and (b).  A Director shall  have
               no authority to appoint an alternate Director
               to serve in his place.

          13.9 Until such time as the Shareholders appoint a
               new  Director  as described in Section  13.8,
               the   Shareholders  shall  exercise  all  the
               powers  referred  to  in  this  Agreement  as
               exercisable by the Director.


SECTION 14.    CHIEF EXECUTIVE OFFICER

               Foreign  Parties  shall  have  the  right  to
               nominate,  by a majority vote of Shares,  the
               President  of  the Company who shall  be  the
               Chief  Executive  Officer.  This  appointment
               shall  be  made with the concurrence  of  the
               Nepali Party.


SECTION 15.    STATUTORY AUDITOR

          It  is  agreed that the Company shall  have  joint
          statutory  auditors  being a local  auditing  firm
          from   Nepal  and  an  internationally  recognized
          auditing  firm  whether or not represented/located
          in Nepal.


SECTION 16.    LOAN/WORKING CAPITAL

          The  Nepali Party, PANDA OF NEPAL and RDC OF NEPAL
          shall  exercise their best efforts to  enable  the
          Company   to  obtain  the  necessary  Loan/Working
          Capital  by arranging financing to the Company  or
          providing guarantees to the banks/lenders  of  the
          Company, etc.


SECTION 17.    FISCAL PERIOD

          The Fiscal year of the Company shall, commence  on
          July  16  and  end  on July 15 of  next  year,  as
          provided by Nepalese law, provided that the  first
          fiscal   year  shall  commence  on  the  date   of
          incorporation  and end on July  15,  of  the  next
          year.


SECTION 18.    FINANCIAL PERIOD

          The Financial year of the Company shall be defined
          as  the  period between 1 January and 31  December
          for the purpose of U.S. or other foreign tax laws.


SECTION 19.    ACCOUNTING PRACTICES

          The Company and its subsidiaries, if any, shall:

          19.1 Keep  proper,  usual  and current  accounting
               records and make true and complete entries of
               all    their    respective    dealings    and
               transactions with respect to their respective
               business  and  make available the  accounting
               records  of the Company and subsidiaries  (if
               any)  at  all reasonable times during  normal
               business hours for inspection by the nominees
               of the Shareholders.

          19.2 Prepare   regular  financial  and  management
               accounts and reports in a form acceptable  to
               each of the Shareholders.  Such accounts  and
               management  statements, cash flow projections
               and  progress  reports will be  prepared  and
               dispatched to the Shareholders within 4 weeks
               at  the  end  of  the  period  of  which  the
               accounts  relate.  The Company  shall  supply
               such  further information as the nominees  of
               the   Shareholders  may  from  time  to  time
               reasonably require as to all matters relating
               to  the business or financial position of the
               Company  and  its subsidiaries  (if  any)  or
               otherwise relating to the affairs thereof.


SECTION 20.    PAYMENT AND TAX MATTERS

          20.1 Unless otherwise prescribed hereunder, all of
               the  payments made by the Company to  RDC  OF
               NEPAL and PANDA OF NEPAL will be made in  US$
               or  convertible foreign currency at the  bank
               or other address nominated by RDC OF NEPAL or
               PANDA  OF  NEPAL in writing and  all  of  the
               payments made by the Company to IFC shall  be
               made  in US$ at the bank or any other address
               nominated   by   IFC  in  writing.    Foreign
               currency payments shall also be authorized to
               the  extent permitted by the proposed Project
               Agreement  executed between the  Company  and
               HMGN.

          20.2 Any  withholding tax imposed on the  payments
               under  this Agreement to PANDA OF NEPAL,  RDC
               OF  NEPAL and HIPC shall be withheld from the
               payments by the Company and immediately  paid
               to  the  competent tax office.   The  Company
               shall  obtain  from  the  competent  taxation
               authorities a certificate of payment of  such
               withholding tax or other appropriate evidence
               in  such form as shall be most useful to, and
               necessary  for  tax credit  purposes  in  the
               United  States and forward the same to  PANDA
               OF NEPAL or RDC OF NEPAL.

          20.3 Within  90 days after the end of each  Fiscal
               Year, the Company shall prepare and file,  or
               cause  to  be  prepared and  filed,  any  tax
               returns of the Company and shall send to each
               person  who  was a Shareholder  at  any  time
               during  such  fiscal  year  copies  of   such
               information as may be reasonably required for
               the  applicable income tax reporting purposes
               by  such  person.   The  Company  shall  also
               prepare,  within the same time  period,  such
               other   returns   and  information   as   any
               Shareholder  may reasonably request  for  the
               purposes   of   complying  with  requirements
               imposed on the Company or the Shareholder  by
               U.S. or other foreign tax laws.

          20.4 Without    affecting   in   any    way    the
               characterization of the Company as a  private
               limited    company   in   Nepal    and    the
               applicability of the provisions of  the  Act,
               the  Shareholders intend that the Company  be
               treated as a partnership for tax purposes  in
               the United States without responsibilities to
               HMGN and without in any way affecting its tax
               status  in  Nepal.   Each  Shareholder  whose
               earnings from the Company are reported to the
               U.S.  tax  authorities will ensure  that  the
               earnings  are reported on a basis  consistent
               with this characterization.  The Company  and
               its  Shareholders subject to taxation in  the
               United  States  will make an election  to  be
               treated  as a partnership for federal  income
               purposes  in  the United States  if  such  an
               election    becomes   available.     It    is
               acknowledged  and agreed that  the  preceding
               two sentences shall not be applicable to IFC.
               If  requested by any Shareholder, the Company
               will make an election to adjust the basis  of
               its  assets so that such basis will equal the
               basis  which  each  Shareholder  has  in  its
               Shares in the Company.  The purpose for  this
               adjustment  is  to ensure that any  investors
               purchasing Shares in the Company will not  be
               subject  to U.S. taxation on any appreciation
               in  the  value of the Company's  assets  that
               occurred before they purchased their Shares.


SECTION 21.    NON-ASSIGNABILITY

          Except  in  connection with the  transfer  of
          Shares   in   accordance   with   Section   7
          hereinabove,  the rights and  obligations  of
          each  of  the  Parties under  this  Agreement
          shall   not   be   assignable   directly   or
          indirectly  except  with  the  prior  written
          consent  of  the other Parties which  consent
          may be withheld by the other Parties in their
          sole and absolute discretion.


SECTION 22.    EFFECTIVE DATE

          This Agreement shall come into effect on  the
          latest  to occur of (i) the date of execution
          by  all  the Parties, (ii) the date on  which
          all  necessary approvals and/or licenses  are
          obtained from HMGN as required and (iii)  the
          date on which Financial Closing occurs.


SECTION 23.    DURATION

          This Agreement shall be valid initially for a
          period  of forty-one years from the Effective
          Date  and  it  may  be  renewed  with  mutual
          consent and with prior approval of the  HMGN,
          if such approval is required.

SECTION 24.    TERMINATION

          This  Agreement may be terminated at any time
          by an instrument signed by all the Parties.

SECTION 25.    MODIFICATION

          This  Agreement  may be changed,  amended  or
          otherwise  modified only by means of  written
          agreement  executed  by the  duly  authorized
          representatives  of  the  Parties.   Such   a
          modification shall be effective only upon the
          approval  of the relevant authority of  HMGN,
          Nepal, if such approval is required.

SECTION 26.    GOVERNING LAW

          This  Agreement shall be governed by the Laws
          of Kingdom of Nepal.

SECTION 27.    ARBITRATION

          27.1 All  disputes under this Agreement  shall  be
               resolved finally, and without appeal  to  any
               courts,  in  accordance  with  the  following
               procedures.

          27.2 At  the  Preliminary  General  Meeting,  each
               Party  shall  appoint  a  representative  who
               shall   be   principally   responsible    for
               administering the Agreement on behalf of such
               Party  and representing the Party's interests
               in the event of any disputes or disagreements
               under this Agreement.

          27.3 In  the  event that a Party has a dispute  or
               disagreement  with  another  Party   or   the
               Company,  such  Party shall  provide  written
               notice  to  the  Company  and  to  the  other
               Parties'  representatives setting  forth  the
               alleged   facts  and  issues  regarding   the
               dispute (the "Dispute Notice").  The Parties'
               representatives shall have thirty  (30)  days
               from  the  date  of receipt  of  the  Dispute
               Notice to resolve the claim.

          27.4 Any   dispute  or  disagreement  between  the
               Parties  or  between a Party and the  Company
               relating  to  or  in  connection  with   this
               Agreement, which is not finally settled by  a
               discussion     between     the      appointed
               representatives   shall   be   submitted   to
               mediation  at  the  written  request  of  any
               Party, specifying the issue or issues in  the
               dispute  and  summarizing the  Party's  claim
               with respect thereto.

          27.5 A  party initiating mediation proceedings may
               request  that a committee be established  and
               such   committee  resolve  the   dispute   or
               disagreement.   Such committee shall  consist
               of  one  representative appointed by each  of
               the  Parties and a chairman acceptable to all
               of   the  Parties.   For  purposes  of   such
               mediation proceedings, counsel for any  Party
               or  the  Company  may be present  unless  the
               Parties  agree  that  no  counsel  shall   be
               present  at such proceedings and the  use  of
               any  submissions  by  any  Party  or  by  the
               Company shall be restricted to such mediation
               proceeding  unless  raised  in  a  subsequent
               proceeding by the same Party as raised it  in
               the mediation proceeding.

          27.6 In the event that the Parties fail to form  a
               mediation  committee,  or  if  the  mediation
               committee  fails  to reach  a  decision  with
               respect  to  the dispute within  thirty  (30)
               days  of  the appointment of a chairman,  any
               Party may refer such dispute, controversy  or
               claim   to  arbitration  for  settlement   in
               accordance with the United Nations Commission
               on International Trade Law (UNCITRAL) as then
               presently   in   force.   For   purposes   of
               application of the UNCITRAL Arbitration Rules
               to this Agreement:

               (a)   The appointing authority shall  be  the
               Singapore  International  Arbitration  Centre
               ("SIAC").

               (b)  Each arbitral tribunal shall consist  of
               three  arbitrators.  Provided there are  only
               two  parties to any dispute, each party shall
               appoint   one   arbitrator  and   the   third
               arbitrator  shall be appointed by  SIAC.   If
               there  are  more  than  two  parties  to  any
               dispute,  each  of the parties  thereto  will
               work  together in good faith to appoint three
               arbitrators.   If the parties are  unable  to
               agree on such arbitrators within fifteen (15)
               days, three arbitrators shall be appointed by
               SIAC  upon  the request of any party  to  the
               dispute.   No arbitrator shall be  a  present
               employee  or  agent  of,  or  consultant   or
               counsel to, any party or any affiliate of any
               party.

               (c)   The  place of the arbitration shall  be
               Singapore.

               (d)   The language to be used in the arbitral
               proceedings shall be English.

               (e)    The  Parties  hereby  consent  to  the
               jurisdiction of the arbitration  panel.   The
               arbitration panel acting by majority decision
               shall   be  authorized  to  order  legal   or
               equitable    relief,    including    specific
               performance   or  injunctive   relief.    The
               arbitration award determined by a majority of
               the  arbitration  panel shall  be  final  and
               binding  and  enforceable  in  any  court  of
               competent jurisdiction.

               (f)    Within   thirty  (30)  days   of   the
               conclusion of the arbitration hearing, unless
               such  time  is extended by mutual  agreement,
               the  arbitrators shall notify the Parties  in
               writing  of their decision stating separately
               findings of fact and conclusions of law.  The
               arbitrators shall not have the power  to  add
               to  or amend this Agreement.  The decision of
               the majority of arbitrators shall specify how
               the expenses (including reasonable attorneys'
               fees) of the arbitration shall be allocated.


SECTION 28.    NON-COMPETITION

               The Nepali Party, PANDA OF NEPAL, and RDC  OF
               NEPAL (the "Private Parties") agree that they
               or  their  Affiliates shall not, directly  or
               indirectly,   develop   electric   generating
               plants which are competitive with the Company
               without  the prior written agreement  of  the
               other  Private Parties.  The Private  Parties
               shall  promptly disclose any interest in  any
               power   project  located  in  Nepal  to   the
               Shareholders of the Company.


SECTION 29.    FUTURE PROJECT DEVELOPMENT

          29.1 As  long  as  any of the Private Parties  are
               Shareholders  in  the Company,  such  Parties
               agree  to  develop any future power  projects
               located  in Nepal solely in cooperation  with
               the    other   Private   Parties   that   are
               Shareholders in the Company (unless a Private
               Parties  elects  not  to pursue  such  future
               project,  in which case, the remaining  other
               Private  Parties may locate a third party  or
               parties     to     substitute     for     the
               nonparticipating Private Party).

          29.2 RDC OF NEPAL and its Affiliates shall not  be
               required to comply with Section 29.1 where  a
               third  party initially solicits RDC OF  NEPAL
               to   act  as  owner's  engineer  or   in   an
               Engineering,   Procurement  and  Construction
               Contract   ("EPC")  or  consulting   engineer
               capacity on any project.  As long as  RDC  OF
               NEPAL is a Shareholder in the Company, RDC OF
               NEPAL   shall  not  assist  any  third  party
               private  developer with respect to any  power
               project   located  in  Nepal,   unless   such
               developer  holds the rights to  such  project
               prior  to  any such assistance, or the  other
               Parties  elect  not  to participate  in  such
               project as provided above.  In such case, the
               Private  Parties  shall  be  bound   by   the
               confidentiality  requirements  set  forth  in
               Section 30 of this Agreement.


SECTION 30.    CONFIDENTIALITY

          Each Private Party agrees that it shall,  and
          shall  cause each of its Affiliates,  agents,
          designee(s), representatives and employees to
          (a)   maintain  in  confidence  any  and  all
          proprietary   and  confidential   information
          designated in writing concerning the  Project
          and   (b)   refrain  from  using   any   such
          information in competition with or  otherwise
          to  the detriment of the Project.  No Private
          Party shall have any liability hereunder  for
          disclosure  or  use of any  such  information
          which (i) is in or, through no fault of  such
          Private   Party,   its  Affiliates,   agents,
          representatives or employees, comes into  the
          public  domain or (ii) was acquired  by  such
          Private  Party from other sources  after  the
          date  hereof, provided such sources  are  not
          prohibited  from disclosing such  information
          by legal, contractual or fiduciary obligation
          to the Company or (iii) such Private Party is
          compelled    by    legal,   regulatory,    or
          administrative    process     to     disclose
          confidential information or (iv) such Private
          Party  is  otherwise required  by  applicable
          law,  including,  but not limited  to  United
          States security laws to disclose confidential
          information.  The provisions of this  Section
          30  shall  survive  any termination  of  this
          Agreement.

SECTION 31.    CORRUPT PRACTICES

          Each  Party  agrees that  it  will  not  pay,
          promise,   offer  or  authorize  payment   of
          anything of value (in any form) to any person
          or organization either directly or indirectly
          (including, as applicable under law,  through
          an  agent, representative, sub-contractor  or
          other  third party) to obtain or  retain  any
          contract,  permit  or any  other  concession,
          where   such  payment,  promise,   offer   or
          authorization  is contrary to applicable  law
          or  laws  including, but not limited  to,  as
          applicable, the Foreign Corrupt Practices Act
          of the United States.

SECTION 32.    FORCE MAJEURE

          No  Party  shall be liable for any breach  or
          nonobservance  of any term  or  condition  of
          this  Agreement on account of  force  majeure
          which  shall  mean  fire, explosion,  act  of
          Government  and  other similar  circumstances
          beyond the control of a Party.

SECTION 33.    APPROVAL AND LICENSE

          HIPC  shall  extend its best  cooperation  in
          obtaining any necessary approvals or  license
          for  the  incorporation of the  Company  from
          HMGN.

SECTION 34.    LANGUAGE

          This  Agreement  is executed in  the  English
          Language  which  shall be deemed  to  be  the
          original.  In case of any discrepancy between
          any  translation and the above  version,  the
          English  version  shall  be  binding  in  all
          respects.

SECTION 35.    NOTICE

          35.1 Any  notice required or given hereunder shall
               be  in writing and may be given by registered
               airmail,   hand-delivery,   or   by    telex,
               facsimile  transmission  or  cable   at   the
               address for the Parties given hereinabove.

          35.2 Any  Party  may amend its address  set  forth
               above by written notice, made pursuant to any
               of the above methods to the other Parties and
               the Company.


SECTION 36.    PRIOR JOINT VENTURE AGREEMENT

          This  Agreement supercedes, in its  entirety,
          the  Joint Venture Agreement among the Nepali
          Party, Panda of Nepal and RDC of Nepal.


IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this Agreement on the ________________, 1997.



HIMAL INTERNATIONAL POWER       PANDA OF NEPAL
CORP. LTD                       a Cayman Islands company
                                and a subsidiary of Panda
                                Energy International, Inc.,
                                a Texas (USA) corporation








RDC OF NEPAL,                   INTERNATIONAL FINANCE
a Cayman Islands company and    CORPORATION
a subsidiary of Resource
Development Consultants, a
Wyoming (USA) limited
liability company





                              Authorized Representative







                        ANNEXURE - 1



(Annexure attached to the Joint Venture Agreement  of  Bhote

Koshi Power Company Private Limited dated _________, 1997).



By   this  Deed  I/we                              of  whose

registered             office             is              at

intending to become the holder of (          ) shares of Rs.

(           )  each  in  the  Capital of Bhote  Koshi  Power

Company  Private  Limited (the "Company")  hereby  agree(s),

subject to my/our becoming a holder of such shares, with the

Company and each of its shareholders to observe and be bound

by  all  the  provisions of an Agreement made on  _________,

1997  between  (1)  Himal  International  Power  Corporation

Private  Limited, (2) Panda of Nepal, (3) RDC of  Nepal  and

(4)  International  Finance Corporation  (a  copy  of  which

Agreement is attached hereto and has been initialed by me/us

for  identification) in all respects as if I/we  was/were  a

party  to  such  Agreement  and  were  named  therein  as  a

Shareholder or a party thereto.



IN  WITNESS whereof, the Parties hereto have set their hands

to these presents on the day and date mentioned herein above

earlier.