EXHIBIT NO. 10.143.01



                       SPECIAL CONDITIONS



                             between



            BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                               and


   DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH



                  Dated as of the Closing Date





                        TABLE OF CONTENTS

                                                        PAGE NOS.


     ARTICLE 1
     Special Conditions and General Conditions; Definitions

     Section 1.1  Special Conditions and General Conditions     1
     Section 1.3  General Definitions                           1

     ARTICLE 2
     The Project and Financial Plan

     Section 2.1  The Project                                    2
     Section 2.2  Financial Plan - Estimated Project Cost.       2

     ARTICLE 3
     Agreement for the DEG Loan

     Section 3.1   The DEG Loan.                                 3
     Section 3.2   Disbursement Procedure.                       3
     Section 3.3   Interest                                      3
     Section 3.4   Fees.                                         3
     Section 3.5   Repayment.                                    4
     Section 3.6   Voluntary Prepayment.                         5
     Section 3.7   Mandatory Prepayment.                         6
     Section 3.8   Prepayment Premium.                           9
     Section 3.9   Additional Interest.                          9
     Section 3.10  Payments in Deutsche Marks.                  10
     Section 3.11  Allocation of Partial Payments               11
     Section 3.12  Suspension or Cancellation of Disbursements
                   by DEG                                       11
     Section 3.13  Termination of Commitment.                   12
     Section 3.14  Cancellation by the Company                  12
     Section 3.15  Funding Costs                                12
     Section 3.16  Maintenance Amount                           12

     ARTICLE 4
     Representations and Warranties

     Section 4.1  Representations and Warranties Contained
                  in General Conditions.                        13
     Section 4.2  Rights and Remedies not Limited               13

     ARTICLE 5
     Conditions of Disbursement

     Section 5.1  Conditions of Initial Disbursement            13
     Section 5.2  Conditions of All Disbursements               13
     Section 5.3  No Waivers                                    14

     ARTICLE 6
     Particular Covenants

     Section 6.1  Particular Covenants.                         14

     ARTICLE  7
     Events of Default

     Section 7.1  Events of Default                             14

     ARTICLE 8
     Miscellaneous

     Section 8.1  Notices                                       14
     Section 8.2  English Language                              14
     Section 8.3  Expenses                                      15
     Section 8.4  Jury Trial                                    15
     Section 8.5  Confidential Information                      15

SCHEDULE 2.2(a)
          FINANCING PLAN                                        17

SCHEDULE 2.2(b)
          PROJECT COSTS                                         18

SCHEDULE 3.2(a)(i)
          FORM OF DEG DISBURSEMENT REQUEST                      20

SCHEDULE 3.2(a)(ii)
          FORM OF DEG LOAN DISBURSEMENT RECEIPT                 23



                       SPECIAL CONDITIONS

     AGREEMENT, dated as of the Closing Date, between BHOTE KOSHI
POWER  COMPANY  PRIVATE  LIMITED,  a  private  limited  liability
company  organized and existing under the laws of the Kingdom  of
Nepal   (the   "Company")   and   DEG-DEUTSCHE   INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH, a company  organized  and  existing
under  the  laws  of  the Federal Republic  of  Germany  ("DEG").
(Capitalized  terms used herein shall be defined as  provided  in
Section 1.3 hereof).

      WHEREAS, the Company has requested DEG to make a term  loan
to  it  on  the terms and subject to the conditions set forth  in
this  Agreement, for the purpose of financing a  portion  of  the
costs  of construction of the Company's proposed run of the river
hydroelectric  power  facility with a rated  capacity  of  36  MW
(nominal  net)  and a 25 km transmission line,  the  Upper  Bhote
Koshi  electric power project, in the Sindhupalchok  District  of
Nepal;

      WHEREAS,  DEG is willing to make such a term  loan  to  the
Company  on the terms and subject to the conditions set forth  in
this Agreement, for the purpose described above;

     NOW THEREFORE, the parties hereto agree as follows:


                           ARTICLE 1

     Special Conditions and General Conditions; Definitions

      Section  1.1    Special Conditions and General  Conditions.
This  document is entitled "DEG Special Conditions."  A  document
entitled  "Investment Agreement General Conditions" (the "General
Conditions")  is  appended hereto.  Such two  documents  together
constitute  the DEG Investment Agreement, dated the date  of  the
Special  Conditions  between DEG and the  Company  (collectively,
this "Agreement").  If any provision of the General Conditions is
inconsistent with a provision of the DEG Special Conditions,  the
provision of the DEG Special Conditions shall prevail.

     Section 1.2    Principles of Construction.  For all purposes
of  this  Agreement, (i) capitalized terms used but not otherwise
defined herein shall have the meanings set forth in Schedule A to
the  General Conditions (as amended or supplemented from time  to
time)  and  (ii)  the  principles of construction  set  forth  in
Schedule A to the General Conditions shall apply.
     Section 1.3    General Definitions.

      "DEG Loan" shall have the meaning ascribed to it in Section
3.1 hereof.

      "DEG  Loan  Interest  Rate" shall  mean  9.60%  per  annum;
provided, however, that in the event any part of the DEG Loan has
been  undisbursed  and (i) if in accordance with  Section  3.5(c)
such  undisbursed amount reduces the loan repayment  schedule  by
one  full payment of principal, the DEG Loan Interest Rate  shall
at  such  time  be reduced by .05% or (ii) if in accordance  with
Section 3.5(c) such undisbursed amount reduces the loan repayment
schedule by two or more full payments of principal, the DEG  Loan
Interest Rate shall at such time be reduced by .1%.

      "Disbursement  Request" shall mean, for  purposes  of  this
Agreement,  a request for a Loan Disbursement, submitted  by  the
Company to DEG, in accordance with the provisions of Section  3.2
hereof.

      "DM" or "Deutsche Marks" shall mean the freely transferable
lawful currency of the Federal Republic of Germany, provided that
to  the extent so required and pursuant to the general principles
of  currency law, where any amount is outstanding or expressed in
Deutsche  Marks under this Agreement or the other Loan Documents,
such amount so outstanding or so expressed shall be deemed to  be
so  outstanding or so expressed, as the case may be, in units  of
the Euro at the time when Deutsche Marks are replaced by the Euro
pursuant  to  the  applicable regulations of the  European  Union
and/or  of  the Federal Republic of Germany and DEG has  notified
the  Company  at least sixty (60) days in advance  that  payments
shall thereafter be made in units of the Euro.

      "Euro" shall mean the common European currency, as and when
such currency is introduced and reorganized by applicable law  of
the  European Union and/or the Federal Republic of Germany as the
new European currency.

      "Loan  Disbursement"  shall  mean,  for  purposes  of  this
Agreement, any disbursement of any portion of the DEG Loan.


                           ARTICLE 2

                 The Project and Financial Plan

      Section 2.1    The Project.  The project to be financed  is
the  Facility, the Site, all auxiliary facilities, utilities  and
the  sites  thereof,  the construction, equipping,  placing  into
operation,  and  operation  of the  Facility,  and  as  otherwise
described in the Letter of Information.

     Section 2.2    Financial Plan - Estimated Project Cost.

      (a)  The proposed sources of financing for the Project  are
set forth on Schedule 2.2(a) hereof.

      (b)  As of the date hereof, the total estimated cost of the
Project is set forth on Schedule 2.2(b) hereof.


                           ARTICLE 3

                   Agreement for the DEG Loan

     Section 3.1    The DEG Loan.

      (a)   On  the terms and subject to the conditions  of  this
Agreement, DEG agrees to lend to the Company the amount of up  to
Twenty  One  Million  Deutsche  Marks  (DM21,000,000)  (the  "DEG
Loan").

      (b)   The  DEG  Loan is not revolving in  nature,  and  any
amounts repaid, prepaid or canceled pursuant to the terms of this
Agreement may not be re-borrowed.

     Section 3.2    Disbursement Procedure.

      (a)   The Company may request Disbursements of the DEG Loan
by  delivering to DEG, at least ten (10) Business Days  prior  to
the  proposed  date  of Disbursement, a DEG Disbursement  Request
substantially  in the form of Schedule 3.2(a)(i)  hereof,  and  a
receipt substantially in the form of Schedule 3.2(a)(ii) hereof.

      (b)   DEG shall make Disbursements of the DEG Loan  to  the
credit  of  the  Company into the Offshore Retention  Account  in
accordance  with  the  provisions  of  the  Trust  and  Retention
Agreement.

      (c)  Each Disbursement of the DEG Loan shall be made in  an
aggregate  amount  of  not less than One Million  Deutsche  Marks
(DM1,000,000),  and  there  shall  be  no  more  than  eight  (8)
Disbursements of the DEG Loan.

     (d)  Each Disbursement of the DEG Loan will be made on a pro
rata  basis  with a corresponding Disbursement of the IFC  Loans,
such that the ratio of the amount of each Disbursement of the DEG
Loan  to the total amount of the DEG Loan shall be equal  to  the
ratio of the amount of each Disbursement of the IFC Loans to  the
total amount of the IFC Loans.

     Section 3.3    Interest.  Subject to Section 3.9 hereof, the
Company  shall  pay interest on the DEG Loan from  time  to  time
outstanding in accordance with this Section 3.3.  Interest  shall
accrue  from  day to day and shall be payable in arrears  on  the
Interest  Payment Dates.  The Company shall pay interest  at  the
DEG  Loan  Interest  Rate  on the full amount  of  the  DEG  Loan
outstanding  from  time  to time.  The interest  payable  on  any
Interest  Payment Date shall include interest accruing  from  and
including  the last Interest Payment Date through  the  day  just
preceding the current Interest Payment Date.  Interest  shall  be
pro-rated on the basis of a 360-day year and 30 day months in the
relevant interest period.

     Section 3.4    Fees.

     (a)  The Company shall pay to DEG in Deutsche Marks:

                     (i)   a  commitment fee at the rate  of  two
               percent  (2.0%) per annum on that part of the  DEG
               Loan  as  shall not, from time to time, have  been
               canceled  by DEG or disbursed to the Company,  and
               in accordance with subsection (b) below;

                     (ii) a front-end fee for the DEG Loan of  an
               amount  of one percent (1.0%) of the total  amount
               of  the  DEG  Loan, to be paid within thirty  (30)
               days after the date of this Agreement, but in  any
               event  prior  to  the date of the first  DEG  Loan
               Disbursement; and

                     (iii)      an  annual loan fee  of  Thirteen
               Thousand  One  Hundred Twenty-Five Deutsche  Marks
               (DM13,125),  to  be  paid on  the  first  Interest
               Payment  Date  and  every second Interest  Payment
               Date thereafter.

      (b)   The  commitment fee specified in subsection  (a)  (i)
above in respect of the DEG Loan commences to accrue on the  date
this Agreement is executed; and

                     (i)   is pro-rated on the basis of a 360-day
               year for the actual number of days elapsed; and

                     (ii)  is payable by the Company with respect
               to  the  DEG  Loan, semi-annually in  arrears,  on
               March  15 and September 15 in each year; the first
               such payment to be made on March 15, 1998.

     Section 3.5    Repayment.

      (a)  The Company shall repay the DEG Loan on each Principal
Payment  Date  in  accordance with the following  loan  repayment
schedule:

      Date Payment Due         Installment (DM)

 1.   March 15, 2001              562,900.00
 2.   September 15, 2001          562,819.84
 3.   March 15, 2002              627,834.36
 4.   September 15, 2002          627,008.67
 5.   March 15, 2003              672,836.65
 6.   September 15, 2003          705,491.66
 7.   March 15, 2004              739,731.52
 8.   September 15, 2004          766,832.42
 9.   March 15, 2005              817,045.97
 10.  September 15, 2005          844,548.05
 11.  March 15, 2006              897,245.57
 12.  September 15, 2006          930,012.06
 13.  March 15, 2007              985,441.21
 14.  September 15, 2007        1,017,991.50
 15.  March 15, 2008            1,079,408.96
 16.  September 15, 2008        1,131,796.27
 17.  March 15, 2009            1,186,726.12
 18.  September 15, 2009        1,242,496.74
 19.  March 15, 2010            1,306,118.22
 20.  September 15, 2010        1,365,723.62
 21.  March 15, 2011            1,435,079.12
 22.  September 15, 2011        1,494,911.47

 TOTAL                         21,000,000.00



      (b)  The dates for payment of principal of the DEG Loan are
intended to coincide with the relevant Interest Payment Dates.

      (c)   If  any part of the DEG Loan has been undisbursed  on
September 30, 2000 or any part of the DEG Loan has been  prepaid,
such  undisbursed or prepaid parts of the DEG Loan shall be  set-
off  against  the  repayment installments  in  inverse  order  of
maturity  to  reduce  the term of the DEG Loan.   DEG  shall  (i)
recalculate the amortization schedules set out in subsection  (a)
above  accordingly and deliver the same to the Company, and  (ii)
upon  delivery  to  the  Company  of  the  properly  recalculated
amortization  schedules, this Agreement will be  deemed  to  have
been   amended   to  substitute  such  recalculated  amortization
schedules for subsection (a) above.

     Section 3.6    Voluntary Prepayment.

      (a)   The Company may, on any Interest Payment Date, prepay
all  or  any part of the DEG Loan then outstanding, on  not  less
than thirty (30) days' written notice to DEG, but only if:

                     (i)   the  Company simultaneously  pays  the
               prepayment premium specified in Section 3.8 hereof
               in  respect of any outstanding balance of the  DEG
               Loan, with respect to the portion of the DEG  Loan
               so prepaid;

                     (ii) the Company simultaneously pays (x) all
               accrued interest on the amount of the DEG Loan  to
               be prepaid, and (y) all other amounts then payable
               under this Agreement;

                     (iii)      for  a  partial prepayment,  such
               prepayment is in an aggregate amount of  not  less
               than One Million Deutsche Marks (DM1,000,000);

                     (iv) the Company simultaneously prepays, pro
               rata, the outstanding principal amount of the  IFC
               Loans   (or   portion  thereof,  as   applicable),
               together   with  all  accrued  interest   on   the
               principal  amounts  of  the  Loans  (or   portions
               thereof,  as  applicable), the Maintenance  Amount
               (if  any)  on  the Loans (or portions thereof,  as
               applicable)  and  all  other  amounts   then   due
               hereunder   or  under  any  of  the   other   Loan
               Documents; and

                    (v)  if DEG so requires, the Company delivers
               to  DEG, prior to the date of prepayment, evidence
               satisfactory   to   DEG  that   all   Governmental
               Approvals  necessary in respect of the  prepayment
               have  been  obtained or an opinion of counsel,  in
               form and substance reasonably satisfactory to DEG,
               that none are required.

      (b)   Amounts  prepaid under this Section and  Section  3.7
shall  be  applied by DEG to all respective outstanding repayment
installments of the DEG Loan in inverse order of maturity.

     (c)  Upon delivery of a notice in accordance with subsection
(a)  above,  the Company shall make the prepayment in  accordance
with the terms of that notice.

      (d)   The  Company may not request Disbursement of  amounts
prepaid under this Agreement.

     Section 3.7    Mandatory Prepayment.

      (a)   On  the Purchase Date, all Obligations owing  to  DEG
relating  to the DEG Loan hereunder and under the Loan  Documents
shall  become immediately due and payable without any  action  on
the part of DEG, and the Company shall pay to DEG an amount equal
to  all such Obligations due and owing to DEG, including, without
duplication, all accrued interest on the principal amount of  the
DEG  Loan  to be prepaid and all other amounts then  due  to  DEG
hereunder.

      (b)   The  Company shall prepay, pro rata, the  outstanding
principal  amount  of  the  DEG  Loan  (or  portion  thereof,  as
applicable)  upon the prepayment by the Company  of  any  of  the
other  Loans (or portions thereof, as applicable), together  with
all  accrued interest on the principal amount of the DEG Loan (or
portion thereof, as applicable), the Maintenance Amount (if  any)
on the DEG Loan (or portion thereof, as applicable) and all other
amounts  then  due  hereunder or under  any  of  the  other  Loan
Documents.

     (c)  Insurance Proceeds shall be applied as follows:

                     (i)  All Insurance Proceeds relative to  any
               single  loss  in  excess of  seven  hundred  fifty
               thousand Dollars ($750,000) shall be paid  by  the
               respective insurers directly to the Trustee.   All
               Insurance  Proceeds relative to a single  recovery
               of seven hundred fifty thousand Dollars ($750,000)
               or less shall be paid directly to the Company.  If
               any Insurance Proceeds relative to any single loss
               in  excess of seven hundred fifty thousand Dollars
               ($750,000),   or,   during  the   occurrence   and
               continuation of an Event of Default,  relative  to
               any  loss  are paid to the Company, such Insurance
               Proceeds shall be received only in trust  for  the
               Lenders,  shall be segregated from other funds  of
               the  Company, and shall be promptly paid  over  to
               the Trustee in the same form as received (with any
               necessary   endorsement)  for   deposit   in   the
               Insurance  Proceeds Sub-Account.  If any Insurance
               Proceeds  are paid to DEG, DEG shall promptly  pay
               over  such  Insurance Proceeds to the Trustee  for
               deposit in the Insurance Proceeds Sub-Account.

                               (A)   If  there does not exist  an
                    Event of Default, Insurance Proceeds relative
                    to  a  single  loss  of seven  hundred  fifty
                    thousand Dollars ($750,000) or less shall  be
                    applied  by the Company to pay the  necessary
                    costs  of  repair, restoration or replacement
                    of  the  Project (in each case, to the extent
                    such  Insurance Proceeds were paid in respect
                    of  physical loss or damage thereto).   After
                    applying  such  amount, any excess  Insurance
                    Proceeds  shall be delivered to  the  Trustee
                    for deposit in the Revenue Sub-Account.

                               (B)   If  there does not exist  an
                    Event  of  Default and if there  shall  occur
                    damage,  destruction or casualty with respect
                    to  which  Insurance Proceeds  in  excess  of
                    seven    hundred   fifty   thousand   Dollars
                    ($750,000) but less than five million Dollars
                    ($5,000,000)  are payable,  and  if  (I)  the
                    Company  promptly (and, in any event,  within
                    30  days after the occurrence of such damage,
                    destruction or casualty) gives written notice
                    to  DEG  that the Company wishes  to  repair,
                    restore  or  replace  the  Project   to   the
                    condition that it was in immediately prior to
                    such  damage,  destruction or casualty,  (II)
                    the   Insurance  Proceeds  received  by   the
                    Company  or  the Trustee together with  funds
                    otherwise available to the Company,  will  be
                    sufficient  to cover all costs  and  expenses
                    necessary  to repair, restore or replace  the
                    Project  and  to  cover  the  Operating   and
                    Maintenance   Costs  and  the  Debt   Service
                    payable  by  the  Company during  the  period
                    necessary  to repair, restore or replace  the
                    Project,  (III)  the repair,  restoration  or
                    replacement of the Project is technically and
                    economically  feasible,  (IV)  after   giving
                    effect to any proposed repair, restoration or
                    replacement, no Default or Event  of  Default
                    or  a  default  under any Principal  Document
                    shall exist, (V) DEG shall receive an opinion
                    of  counsel  in form and substance reasonably
                    satisfactory   to  DEG  or   other   evidence
                    satisfactory   to   DEG  that   neither   any
                    applicable  Governmental  Approval  nor   any
                    Principal  Document (other than  Non-Material
                    Agreements) will terminate during the  period
                    necessary  to repair, restore or replace  the
                    Project   and   no  applicable   Governmental
                    Approval,  or amendment to this Agreement  or
                    the   Security   Documents   or   any   other
                    instrument, is necessary for the  purpose  of
                    subjecting   the   repair,   restoration   or
                    replacement  to  the Liens  of  the  Security
                    Documents except such, if any, as shall  have
                    been  delivered  to DEG, and (VI)  DEG  shall
                    have  received  from  the  Company  and   the
                    Independent  Engineer  such  certificates  or
                    other  evidence as DEG may reasonably require
                    regarding  the  foregoing matters,  then  DEG
                    shall  direct the Trustee in a written notice
                    to deliver the Insurance Proceeds received in
                    connection  with the damage,  destruction  or
                    casualty  to  the Project to the Company  and
                    the   Company  shall  apply  such   Insurance
                    Proceeds  to pay for the necessary  costs  of
                    repair,  restoration or  replacement  of  the
                    Project   and   to  pay  for  Operating   and
                    Maintenance Costs and Debt Service when  due.
                    After  making  such payments to the  Company,
                    any   excess  Insurance  Proceeds  shall   be
                    deposited in the Revenue Sub-Account.

                    (ii) If there shall occur damage, destruction
               or   casualty  with  respect  to  which  Insurance
               Proceeds   in  excess  of  five  million   Dollars
               ($5,000,000)   are   payable,   DEG   may,   after
               consulting  with  the Company  during  the  30-day
               period  following  such  damage,  destruction   or
               casualty,  choose to apply the Insurance  Proceeds
               to  prepay a principal amount of the DEG  Loan  at
               the time outstanding, pro rata with prepayment  of
               the  IFC  Loans,  together with  interest  accrued
               thereon or fees accrued in connection therewith to
               the  prepayment date.  In addition,  if  Insurance
               Proceeds   have  been  paid  pursuant  to   clause
               (b)(i)(B)  above  and  the  Company  (I)  has  not
               notified  DEG promptly that it wishes  to  repair,
               restore  or  replace the Project or (II)  has  not
               otherwise   complied  with   the   provisions   of
               clause   (b)(i)  above  relative  to  the  repair,
               restoration or replacement of the Project, DEG may
               choose  to apply the Insurance Proceeds to  prepay
               the  DEG Loan, pro rata with prepayment of the IFC
               Loans, together with accrued interest.

                       (iii)       Amounts   paid   under    this
               subsection  (c) shall be applied  by  DEG  to  all
               respective  outstanding repayment installments  of
               the DEG Loan in inverse order of maturity.

      (d)   Upon  the  occurrence of a  Capacity  Shortfall,  the
Company  shall  pay, or cause to be paid, to DEG the  Performance
Liquidated  Damages  paid  by the EPC Contractor  under  the  EPC
Contract  with  respect to such Capacity Shortfall  to  prepay  a
principal  amount  of  the DEG Loan equal to  (i)  the  principal
amount  outstanding under the DEG Loan, multiplied  by  (ii)  the
Capacity Shortfall Percentage and shall pay, or cause to be paid,
to  IFC  the  Performance  Liquidated Damages  paid  by  the  EPC
Contractor  under the EPC Contract with respect to such  Capacity
Shortfall to prepay a principal amount of the IFC Loans equal  to
(i)  the  principal  amount  outstanding  under  the  IFC  Loans,
multiplied  by  (ii)  the  Capacity Shortfall  Percentage.   Such
prepayment  of  the  DEG  Loan shall be applied  as  provided  in
Section   3.6(b)  hereof.   To  the  extent  there   are   excess
Performance Liquidated Damages which have been paid  by  the  EPC
Contractor   and   are   remaining  after  the   above-referenced
prepayment to DEG and IFC, such excess shall be applied to  repay
equity in an amount equal to (x) the Dollar amount which has then
been  paid  in  to  the  Company  for  the  purchase  of  Shares,
multiplied by (y) the Capacity Shortfall Percentage.  Such amount
shall  be divided pro rata among all shareholders of the Company.
After  such  application,  any remaining  Performance  Liquidated
Damages  shall  be  transferred to the  Revenue  Sub-Account  and
applied in accordance with the Trust and Retention Agreement.

      (e)   The  Company  shall prepay the outstanding  principal
amount  of  the  DEG Loan upon the occurrence  of  the  Event  of
Default  described  in Section 7.1(k) of the General  Conditions,
together with accrued interest on the principal amount of the DEG
Loan  to  be  prepaid  and  all other amounts  then  due  to  DEG
hereunder.

      (f)   The  Company  shall  pay the  prepayment  premium  as
specified  in Section 3.8 hereof in connection with any mandatory
prepayments pursuant to Sections 3.7(a) (but only if and  to  the
extent that there remains any proceeds of the Purchase Price paid
by  HMGN  and  received by the Company after  (i)  the  aggregate
amount of all Obligations owing to DEG have been paid in full and
(ii)  the shareholders of the Company at such time have recovered
the aggregate amount of their total paid in equity of the Company
to  the extent provided in Section 6.3 of the Project Agreement),
and Section 3.7(e) hereof.

      Section  3.8     Prepayment Premium.  On the  date  of  any
prepayment  of  the  DEG  Loan in accordance  with  Section  3.6,
3.7(a),  3.7(b) or 3.7(e) hereof, the Company shall pay a premium
of  an  amount in Deutsche Marks equal to the difference  between
the  Net  Present Value of the Anticipated Income Stream and  the
Net  Present Value of the Available Income Stream or in the  case
of  a  partial prepayment, the same proportion of such difference
as  the proportion which the amount of the DEG Loan to be prepaid
bears to the amount of the DEG Loan then outstanding, all as more
particularly described below.

     For the purposes of this subsection (a), "Anticipated Income
Stream"  means the aggregate interest payments which  would  have
been  due on the DEG Loan at the DEG Loan Interest Rate  for  the
period  from  the  prepayment  date  until  the  final  scheduled
maturity  date  assuming that no prepayment had taken  place  and
further  assuming that the DEG Loan repayment schedule set  forth
in  Section 3.5 hereof had been adhered to and that all  payments
had been made on their due dates.

      For  the purposes of this subsection (a), "Available Income
Stream" means the interest payments which would have been due  on
the  DEG  Loan at a rate per annum equal to the Fixed  Rate  Swap
Equivalent  for  the period from the prepayment  date  until  the
final  scheduled  maturity date assuming that no  prepayment  had
taken  place  and  further assuming that the DEG  Loan  repayment
schedule set forth in Section 3.5 hereof had been adhered to  and
that all payments had been made on their due dates.

      For  the purposes of this subsection (a), the "Net  Present
Value"  means the value of the relevant Income Stream  discounted
(with stops on the same dates as would have been Interest Payment
Dates)  back  to  the prepayment date from each of  the  relevant
Interest Payment Dates at a discount rate equal to the Fixed Rate
Swap Equivalent.

      The  determination by DEG of the prepayment  premium  under
this Section 3.8 shall be final and conclusive unless the Company
shows,  to  the  satisfaction  of DEG,  that  such  determination
involved clerical error.

     Section 3.9    Additional Interest.

      (a)   Without limiting the remedies available to DEG  under
this  Agreement or otherwise and to the maximum extent  permitted
by  applicable law, if the Company fails to make any  payment  of
principal  or  interest (including interest payable  pursuant  to
this  Section) or any other payment on or before its due date  as
specified in this Agreement (whether at stated maturity  or  upon
prematuring  by  acceleration  or  otherwise)  or,  if   not   so
specified,  as notified by DEG to the Company, the Company  shall
pay  in  Deutsche Marks, by way of liquidated damages, in respect
of the amount of any DEG Loan payment due and unpaid, interest at
the DEG Loan Interest Rate plus two percent (2.0%) per annum from
the  date any such payment became due.  Such interest is  payable
on  demand,  or  if not demanded, on each Interest  Payment  Date
after such failure.

     (b)  The obligation of the Company to pay liquidated damages
as  provided in paragraph (a) above shall be without prejudice to
its  obligation to pay principal and interest in accordance  with
Sections  3.5 and 3.3 hereof and any other amounts payable  under
this Agreement.

     Section 3.10   Payments in Deutsche Marks.

      (a)   The  Company  shall make all payments  of  principal,
interest,  fees,  and any other payment due  to  DEG  under  this
Agreement  in  Deutsche Marks, no later than 9:00  a.m.,  Central
European  Time,  on  the date when due, in immediately  available
funds, at Westdeutsche Landesbank Koeln, account number 40 60 66,
bank  code 370 500 00, or at such other bank as DEG from time  to
time designates to the Company and the Trustee.

      (b)  If any date for payment under this Agreement shall not
be  a Business Day, then such payment shall be made on or by  the
next  succeeding Business Day unless, in the case of payments  of
principal or interest, that next succeeding Business Day falls in
a  different calendar month, in which case that payment shall  be
made  on the immediately preceding Business Day.  Interest, fees,
including,  without limitation, commitment fees, and charges  (if
any)  shall continue to accrue for the period from the  due  date
which is not a Business Day to that next succeeding Business Day,
unless  that  next succeeding Business Day falls in a   different
calendar month, in which case such amounts shall accrue to and be
payable on the immediately preceding Business Day.

      (c)  The tender or payment of any amount payable under this
Agreement  (whether or not by recovery under a judgment)  in  any
currency other than Deutsche Marks does not novate, discharge  or
satisfy  the  obligation of the Company to pay in Deutsche  Marks
all amounts payable under this Agreement except to the extent DEG
actually  receives Deutsche Marks in its account at  Westdeutsche
Landesbank Koeln, account number 40 60 66, bank code 370 500  00,
or  at such other bank as DEG from time to time designates to the
Company and the Trustee.

      (d)  If a currency other than Deutsche Marks is tendered or
paid  (or  recovered  under  any judgment)  and  the  amount  DEG
receives at its account at Westdeutsche Landesbank Koeln, account
number  40 60 66, bank code 370 500 00, or at such other bank  as
DEG  from time to time designates to the Company and the Trustee,
upon  conversion at the then-market rate of exchange, falls short
of  the  full  amount of Deutsche Marks owed  to  DEG,  then  the
Company shall continue to owe DEG, as a separate obligation,  the
amount of the shortfall (regardless of any judgment for any other
amounts due under this Agreement).

      (e)  Notwithstanding subsections (a) through (d) above, DEG
may require the Company to pay (or reimburse DEG) in any currency
other than Deutsche Marks for:

                     (i)   any  taxes  and other amounts  payable
               under the provisions of this Agreement; and

                     (ii)  any  fees, costs and expenses  payable
               under  Section 8.3 hereof and Section 8.1  of  the
               General Conditions;

to the extent those taxes, amounts, fees, costs, and expenses are
payable in that other currency.

      Section 3.11   Allocation of Partial Payments.  If  DEG  at
any  time receives less than the full amount then due and payable
to  it  under  this Agreement, DEG may allocate  and  apply  such
payment  in  any way or manner and for such purpose  or  purposes
under  this  Agreement as DEG in its sole discretion  determines,
notwithstanding any instruction that the Company may give to  the
contrary.

      Section  3.12   Suspension or Cancellation of Disbursements
by DEG.

      (a)   DEG may, by notice to the Company, suspend or  cancel
the  right  of the Company to Disbursements of the DEG  Loan,  in
whole or in part:

                     (i)   if the first Disbursement has not been
               made  by June 1, 1998, or such other date  as  the
               parties agree;

                    (ii) if any Event of Default or Default shall
               have   occurred  and  be  continuing,  or  if   an
               expropriation,     condemnation,      requisition,
               confiscation, seizure or nationalization of all or
               any  substantial  part  of the  Project  or  other
               assets  of the Company or of its share capital  or
               the dissolution or disestablishment of the Company
               or  other action that would prevent the Company or
               its officers from carrying on all or a substantial
               part  of  the  Company's  business  or  operations
               shall,  in  the  reasonable  opinion  of  DEG,  be
               imminent;

                     (iii)      if, at any time in the reasonable
               opinion  of  DEG, there shall exist any  situation
               which indicates that performance by the Company of
               any of its obligations under this Agreement cannot
               be expected;

                     (iv) if the IFC Loans have been suspended or
               cancelled; or

                    (v)  on or after September 30, 2000;

and  in the event of any such cancellation, the Company shall pay
to  DEG the prepayment premium specified in Section 3.8 hereof in
respect  of  any  undisbursed portion of the DEG Loan,  all  fees
payable under Section 3.4 hereof, all breakage or similar  costs,
expenses,  or losses  arising out of such cancellation,  and  all
other amounts then due and payable under this Agreement.

      (b)   Upon the giving of any such notice, the right of  the
Company  to  receive, and the obligation of DEG to disburse,  the
undisbursed part of the DEG Loan shall be suspended or  canceled,
as  the  case  may  be.   The exercise by DEG  of  its  right  of
suspension  does not preclude DEG from exercising  its  right  of
cancellation,  either  for  the same  or  any  other  reason.   A
suspension does not limit any other provision of this Agreement.

     Section 3.13   Termination of Commitment.  The commitment of
DEG  to  make  any  Disbursement of the DEG Loan hereunder  shall
automatically  terminate in accordance  with  the  provisions  of
Article 7 of the General Conditions.

      Section  3.14   Cancellation by the Company.   The  Company
may,  by  notice to DEG, irrevocably request DEG  to  cancel  the
undisbursed portion of the DEG Loan on the date specified in such
request (which shall be an Interest Payment Date no earlier  than
thirty (30) Business Days after the date of the request). If  DEG
is reasonably satisfied that the Company has sufficient long-term
funding  available, on terms satisfactory to DEG, to satisfy  the
Financial  Plan,  and provided that DEG receives  the  prepayment
premium  specified  in  Section 3.8  hereof  in  respect  of  any
undisbursed  portion  of  the DEG Loan, all  fees  payable  under
Section  3.4  hereof, all breakage or similar costs, expenses  or
losses  arising out of such cancellation, and all  other  amounts
then  due and payable under this Agreement, then DEG shall cancel
the  entire undisbursed portion of the DEG Loan effective  as  of
that Interest Payment Date.

     Section 3.15   Funding Costs.

     (a)  If the Company:

                     (i)   fails to pay any amount due under this
               Agreement  on  its  due  date,  or  to  borrow  in
               accordance with a DEG Disbursement Request  or  to
               prepay  in accordance with a notice of prepayment;
               or

                     (ii)  prepays all or any portion of the  DEG
               Loan  on  a  date  other than an Interest  Payment
               Date;

and  as  a result DEG incurs any cost, expense or loss, then  the
Company  shall immediately pay to DEG the amount which  DEG  from
time  to  time notifies to the Company as being the aggregate  of
those costs, expenses and losses incurred.

      (b)  For the purposes of this Section 3.15 and Section 3.14
hereof,  "cost,  expense or loss" include any  interest  paid  or
payable  to  carry any unpaid amount and any premium, penalty  or
expense  incurred to liquidate or obtain third party deposits  or
borrowings in order to make, maintain or fund all or any part  of
the  DEG  Loan  (but in the case of a late payment, after  taking
into  account any additional interest received under Section  3.9
hereof).

     Section 3.16   Maintenance Amount.  On each Interest Payment
Date,  the Company shall pay, in addition to interest, the amount
which  DEG  from  time  to time notifies  to  the  Company  in  a
Maintenance   Amount   Certification  as  being   the   aggregate
Maintenance  Amount  of  DEG accrued and  unpaid  prior  to  that
Interest Payment Date.


                           ARTICLE 4

                 Representations and Warranties

      Section 4.1    Representations and Warranties Contained  in
General Conditions.

     (a)  The Company confirms the representations and warranties
set forth in Article 4 of the General Conditions as if made as of
the   date  hereof,  which  representations  and  warranties  are
incorporated by reference herein as if fully set forth herein.

      (b)   The  Company  warrants  to  DEG  that  each  of  such
representations is true and correct in all material  respects  as
of  the  date of this Agreement and that none of them  omits  any
matter  the  omission of which makes any of such  representations
misleading in any material respect. The representations  referred
to in Section 4.1 hereof shall survive the execution and delivery
of this Agreement and any Disbursement of the DEG Loan.

      Section  4.2     Rights and Remedies  not  Limited.   DEG's
rights  and  remedies  in  relation to any  misrepresentation  or
breach of warranty on the part of the Company are not prejudiced:

      (a)   by any investigation by or on behalf of DEG into  the
affairs of the Company;

      (b)   by the execution or the performance of this Agreement
or any other Principal Document; or

      (c)   by any other act or thing which may be done by or  on
behalf  of  DEG in connection with this Agreement  or  any  other
Principal  Document  and which might, apart  from  this  Section,
prejudice such rights or remedies.


                           ARTICLE 5

                   Conditions of Disbursement

      Section  5.1     Conditions  of Initial  Disbursement.  The
obligation  of DEG to make the initial Disbursement  of  the  DEG
Loan   shall  be  subject  to  the  fulfillment,  in   a   manner
satisfactory to DEG, prior to or concurrently with the making  of
such initial Disbursement of the DEG Loan, of the conditions  set
forth in Section 3.1 of the General Conditions.

       Section  5.2     Conditions  of  All  Disbursements.   The
obligation  of DEG to make any Disbursement hereunder shall  also
be  subject to the fulfillment, in a manner satisfactory to  DEG,
prior to or concurrently with the making of such Disbursement  of
the conditions set forth in Sections 3.2, 3.3, 3.4 and 3.5 of the
General  Conditions.  The obligation of DEG to make any  Disburse
ments of the DEG Loan shall also be subject to (i) compliance  by
the  Sponsor  Shareholders  with their obligations  described  in
Section  2.1  of  the  Subscription  Agreements,  and  (ii)   the
subscription and payment (in an amount which is pro rata  to  the
corresponding Disbursement of the DEG Loan) by IFC  for  the  IFC
Shares  as  provided  for under Article  4  of  the  IFC  Special
Conditions.

     Section 5.3    No Waivers.

      (a)   The  rights  and remedies of DEG in relation  to  any
misrepresentations  or breach of warranty  on  the  part  of  the
Company  shall not be prejudiced by any investigation  by  or  on
behalf  of  DEG into the affairs of the Company, by the execution
or the performance of this Agreement or by any other act or thing
which may be done by or on behalf of DEG in connection with  this
Agreement  and  which  might, apart  from  this  Section  5.3(a),
prejudice such rights or remedies.

      (b)   No  course of dealing or waiver by DEG in  connection
with  any  condition of Disbursement under this  Agreement  shall
impair  any  right, power or remedy of DEG with  respect  to  any
other  condition of Disbursement, or be construed to be a  waiver
thereof;  nor  shall  the  action  of  DEG  in  respect  of   any
Disbursement affect or impair any right, power or remedy  of  DEG
in respect of any other Disbursement.

      (c)   Unless otherwise notified to the Company by  DEG  and
without  prejudice to the generality of paragraph (a) above,  the
right of DEG to require compliance with any condition under  this
Agreement  which  may  be  waived  by  DEG  in  respect  of   any
Disbursement is expressly preserved for the purposes of any subse
quent Disbursement.


                           ARTICLE 6

                      Particular Covenants

      Section  6.1     Particular Covenants.  The  Company  shall
observe and perform the covenants set forth in Articles 5  and  6
of the General Conditions hereof.


                           ARTICLE  7

                       Events of Default

      Section  7.1    Events of Default.  If one or more  of  the
Events   of  Default  specified  in  Article  7  of  the  General
Conditions  hereof  shall have occurred and  be  continuing,  DEG
shall  have the rights and remedies set forth in said  Article  7
and  the  other  Principal Documents, all  of  which  rights  and
remedies  are  incorporated by reference herein,  and  all  other
rights and remedies which may be available at law or in equity.


                           ARTICLE 8

                         Miscellaneous

      Section  8.1     Notices.   Any notice,  request  or  other
communication to be given or made under this Agreement  shall  be
in  writing and shall be given or made in the manner set forth in
the General Conditions hereof.

      Section  8.2     English Language.   All  documents  to  be
furnished  or  communications to be  given  or  made  under  this
Agreement  shall  be in the English language or,  if  in  another
language,  shall  be  accompanied by a translation  into  English
satisfactory to DEG certified by an authorized representative  of
the  Company,  which translation shall be the  governing  version
between the Company and DEG.

      Section 8.3    Expenses.  If any amount owing to DEG  under
this  Agreement shall be collected through any process of law  or
shall  be  placed  in the hands of attorneys for collection,  the
Company  shall pay (in addition to all monies then due in respect
of  the  DEG  Loan  or otherwise payable under  this  Agreement),
professional  consultant  and  attorneys'  and  other  fees   and
expenses incurred in respect of such collection.

      Section  8.4    Jury Trial.  The Company hereby waives  any
and  all rights to demand a trial by jury in any action, suit  or
proceeding  arising out of or relating to this Agreement  or  any
Principal  Document  or the transactions contemplated  hereby  or
thereby,  brought against DEG in any forum in which  DEG  is  not
entitled to immunity from a trial by jury.

     Section 8.5    Confidential Information.

      (a)   DEG  may  disclose to any person for the  purpose  of
exercising  any  power, remedy, right, authority,  or  discretion
under   this  Agreement  or  any  other  Principal  Document   in
connection  with a Default or Event of Default, any documents  or
records of, or information about, any Principal Document, or  the
assets, business or affairs of the Company.

       (b)    The   Company   acknowledges   and   agrees   that,
notwithstanding  the  terms of any other  agreement  between  the
Company  and  DEG,  a disclosure of information  by  DEG  in  the
circumstances  contemplated by this subsection does  not  violate
any  duty  owed to the Company or agreement between DEG  and  the
Company.
      IN  WITNESS WHEREOF, the parties have caused this Agreement
to be signed in their respective names as of the date first above
written.


                    BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                    By:  ____________________________________
                         Authorized Representative



                    DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH


                    By:  ______________________________________
                         Authorized Representative


                        SCHEDULE 2.2(a)

                         FINANCING PLAN

Equity                        US$$

IFC                           $ 2,949,500
Sponsors' Equity              $26,545,500

               Total Equity   $29,495,000


Loans                              US$$                DM

IFC A Loan                      $21,000,000
IFC B Loan                      $36,000,000
DEG Loan                                           DM21,000,000

  Total Loans                   $57,000,000        DM21,000,000


  Total Financing               $98,245,000 1/



              SCHEDULE 2.2(b)

               PROJECT COSTS*
                                                    Amount (US$)
EPC Plant and T-Line                                 $46,340,000
EPC Miscellaneous Change Orders                          600,000
Taxes & Duties                                           411,000
Land and Access Road                                     650,000
Preliminary Investigation                              2,438,000
Engineering - Harza                                    5,290,000
Spare Parts and Start-up Testing                       1,000,000
Development Costs                                      2,963,000
Construction Management & Supervision Costs            2,653,000
Legal Fees                                             3,026,800
Insurance Premiums                                     1,558,000
GLOF Survey/Warning System                               600,000
Environ. Mitigation and Community                        550,000
Development
Engineering/Consulting (Lenders)                         545,000
O&M/Training Costs during Construction                   450,000
Contingency                                           12,228,476
Working Capital                                        1,500,000
Commitment Fee                                           671,478
Financing Fees                                         2,437,000
Interest During Construction, net                      7,033,246
Debt Service Reserve                                   5,300,000
     TOTAL PROJECT COSTS                             $98,245,000




*   Project  costs shall not include any termination  or  similar
fees  in  connection with any financing or contemplated financing
for the Project from sources other than the Lenders.


                       SCHEDULE 3.2(a)(i)

                FORM OF DEG DISBURSEMENT REQUEST



                      [COMPANY LETTERHEAD]

[Date]

DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH
Belvederestrasse 40
D-50933
Koeln (Mungersdorf)
Federal Republic of Germany


Ladies and Gentlemen:

                                   Investment No.
           Request for Loan Disbursement No. [    ]*

1.    Please  refer to the Special Conditions (the  "DEG  Special
Conditions")  between Bhote Koshi Power Company  Private  Limited
(the    "Company")    and   DEG   -   Deutsche   Investitions-und
Entwicklungsgesellschaft mbH ("DEG") and General Conditions dated
as  of  the Closing Date                       among the Company,
DEG  and International Finance Corporation.  Terms defined in the
DEG Investment Agreement and in the General Conditions have their
defined meanings whenever used in this request.

2.     The  Company  irrevocably  requests  the  disbursement  on
________,  19     (or as soon as practicable thereafter)  of  the
amount  of  _______________________________ (DM__________)  under
the DEG Loan.  You are requested to pay such amount to the credit
of  the  Offshore Retention Account in accordance with the  Trust
and Retention Agreement.

3.    DEG  has heretofore disbursed the sum of __________________
Deutsche Marks (DM__________) under the DEG Loan pursuant to  the
DEG Special Conditions.  Following the Disbursement of the amount
requested hereby, there will remain undisbursed _________________
Deutsche Marks (DM__________) under the DEG Loan.

4.    Attached hereto are (i) a signed but undated receipt**  for
the  amount  hereby  requested to be disbursed  and  the  Company
hereby  authorizes DEG to date such receipt as  of  the  date  of
actual  disbursement by DEG of the funds hereby requested  to  be
disbursed  and  (ii)  a  copy  of  the  report  referred  to   in
Section  3.5(b)  of the General Conditions and the  certification
referred to in Section 3.1(x) of the General Conditions.

5.    For  the purpose of Article 6 of the DEG Special Conditions
and  Article  3  of  the General Conditions, the  Company  hereby
certifies the following:

          (a)   on  the date hereof, (1) all representations  and
          warranties  contained in the General Conditions  (other
          than    the    representations   made    pursuant    to
          Section  4.1(e)(ii) of the General Conditions)  and  in
          the  other  Loan Documents to which the  Company  is  a
          party  are  true  and correct in all material  respects
          with the same effect as though such representations and
          warranties  had been made on and as of the date  hereof
          except where expressed to be made on a specified  date,
          (2)  the representations and warranties referred to  in
          Section  4.1(e)(ii) of the General Conditions are  true
          and  correct in all material respects in the manner and
          on    the   basis   as   contemplated   by   the   said
          Section  4.1(e)(ii),  in  each case,  both  immediately
          before  and  after  giving effect to  the  disbursement
          requested hereby, and (3) except as fully reflected  in
          the financial statements delivered to date pursuant  to
          Sections  5.1(a)  and  (b) of the  General  Conditions,
          there  are as of the date of such financial statements,
          no  liabilities  or  obligations with  respect  to  the
          Company  of  any  nature whatsoever (whether  absolute,
          accrued,  contingent or otherwise and  whether  or  not
          due)  which,  either individually or in the  aggregate,
          could constitute a Material Adverse Change;

      (b)   no  Event of Default or Default has occurred  and  is
continuing;

          (c)   since  the  date  of the DEG  Special  Conditions
          nothing  has  occurred  which is reasonably  likely  to
          materially and adversely affect the carrying out of the
          Project  or  the  Company's  ability  to  fulfill   any
          material obligation under the DEG Investment Agreement;

          (d)   no  Force  Majeure  Event  has  occurred  and  is
          continuing;

          (e)   the  proceeds  of the requested disbursement  are
          promptly needed by the Company to pay Project Costs;

          (f)   since the date of the DEG Special Conditions, the
          Company has not incurred any material loss or liability
          (except  such  liabilities as may be  incurred  by  the
          Company  in accordance with Section 6.5 of the  General
          Conditions of the DEG Investment Agreement); and

          (g)   the  Company  has the authority  to  request  the
          amount   requested  to  be  disbursed  and  the  amount
          requested  to  be  disbursed is  within  the  Company's
          available borrowing power.  The Company shall not be in
          violation  of  (A)  its  Charter  Documents,  (B)   any
          covenant  or  agreement contained in  any  document  to
          which  the Company is a party, or (C) any law, rule  or
          regulation,   directly  or  indirectly,   limiting   or
          otherwise restricting the Company's borrowing power  or
          authority or its ability to borrow.

      The  above certifications are effective as of the  date  of
this DEG Special Conditions and will continue to be effective  as
of the date of the disbursement hereby requested. If any of these
certifications is no longer valid as of or prior to the  date  of
disbursement  hereby  requested,  the  Company  will  immediately
notify DEG and will repay the amount disbursed upon demand by DEG
if disbursement is made prior to the receipt of such notice.

                         Yours truly,


                         BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                         By: ___________________________________
                              Authorized Representative




                      SCHEDULE 3.2(a)(ii)

             FORM OF DEG LOAN DISBURSEMENT RECEIPT



                      [COMPANY LETTERHEAD]

[Date]

DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH
Belvederestrasse 40
D-50933
Koeln (Mungersdorf)
Federal Republic of Germany


Attention:

Ladies and Gentlemen:

                     Investment No.
            Disbursement Receipt No. [    ]* (Loan)

       We,   Bhote  Koshi  Power  Company  Private  Limited  (the
"Company"), hereby acknowledge receipt on the date hereof, of the
sum  of                ,  disbursed  to  us  by  DEG  -  Deutsche
Investitions-und Entwicklungsgesellschaft mbH ("DEG")  under  the
DEG   Loan,  consisting  of  the  sum  of  ______________________
Deutsche  Marks (DM________________) under the DEG Loan, provided
for  in  the  DEG Investment Agreement dated              ,  1997
between the Company and DEG.

                              Yours truly,

                              BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                              By:  ______________________________
                                   Authorized Representative**

_______________________________
1/   For purposes of this Schedule 2.2(a), an exchange rate of DM
     1.7872 = $1 has been assumed.

     *  Each to be numbered in series.

     **  See Schedule 3.2(a)(ii) for form of receipt.

     *   Each to be numbered in series.

     **  As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) to the General Conditions  of  the
Investment Agreement).