EXHIBIT NO. 10.143.02
                     INVESTMENT NUMBER 7365




                       Special Conditions



                             between



            BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                               and


                INTERNATIONAL FINANCE CORPORATION



                  Dated as of the Closing Date



                        TABLE OF CONTENTS

                                                        PAGE NOS.


     ARTICLE 1

     Special Conditions and General Conditions; Definitions

     Section 1.1Special Conditions and General Conditions     1
     Section 1.2              General Definitions.       1

     ARTICLE 2

     The Project and Financial Plan

     Section 2.1  The Project.                                            1
     Section 2.2  Financial Plan - Estimated Project Cost.                2

     ARTICLE 3

     Agreement for the IFC Loans

     Section 3.1   The IFC Loans.                                         2
     Section 3.2   Disbursement Procedure.                                2
     Section 3.3   Interest.                                              3
     Section 3.4   Fees.                                                  4
     Section 3.5   Repayment.                                             6
     Section 3.6   Voluntary Prepayment.                                  8
     Section 3.7   Mandatory Prepayment.                                  9
     Section 3.8   Prepayment Premium.                                   13
     Section 3.9   Additional Interest.                                  14
     Section 3.10  Payments in Dollars.                                  14
     Section 3.11  Allocation of Partial Payments                        15
     Section 3.12  Suspension or Cancellation of Disbursements by IFC    15
     Section 3.13  Termination of Commitment.                            16
     Section 3.14  Cancellation by the Company                           16
     Section 3.15  Illegality of Participation                           16
     Section 3.16  Funding Costs                                         17
     Section 3.17  Maintenance Amount                                    17

     ARTICLE 4

     IFC Subscription

     Section 4.1   Subscription and Disbursement                         17
     Section 4.2   Actions Prohibited until IFC Shares Issued            18
     Section 4.3   Suspension and Cancellation of IFC Subscription       19
     Section 4.4   Agreement to Cooperate.                               20
     Section 4.5   IFC Board Seat                                        20

     ARTICLE 5

     Representations and Warranties

     Section 5.1   Representations and Warranties Contained in
                   General Conditions.                                  20
     Section 5.2   Rights and Remedies not Limited                      21

     ARTICLE 6

     Conditions of Disbursement

     Section 6.1   Conditions of Initial Disbursement                    21
     Section 6.2   Conditions of All Disbursements and Subscriptions
                   and Disbursements under the IFC Subscription          21
     Section 6.3   Disbursement Relationship Among IFC Loans and the
                   IFC Subscription                                      22
     Section 6.4   No Waivers                                            22

     ARTICLE 7

     Particular Covenants

     Section 7.1   Particular Covenants.                                 23

     ARTICLE  8

     Events of Default

     Section 8.1   Events of Default                                     23

     ARTICLE 9

     Miscellaneous

     Section 9.1   Notices                                              23
     Section 9.2   English Language                                     23
     Section 9.3   Expenses                                             24
     Section 9.4   Jury Trial                                           24
     Section 9.5   Confidential Information                             24

SCHEDULE 2.2(a)
          FINANCING PLAN                                                26

SCHEDULE 2.2(b)
          PROJECT COSTS                                                 27

SCHEDULE 3.2(a)(i)
          FORM OF IFC DISBURSEMENT REQUEST                              28

SCHEDULE 3.2(a)(ii)
          FORM OF IFC LOANS DISBURSEMENT RECEIPT                        31

SCHEDULE 4.1(b)
          FORM OF SUBSCRIPTION REQUEST                                  32

ANNEX A
          METHODOLOGY FOR TRANCHE RATE PRICING CALCULATION              35



     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 INTERNATIONAL FINANCE CORPORATION,  an
international organization established by Articles  of  Agreement
among  its  member  countries ("IFC").  (Capitalized  terms  used
herein shall be defined as provided in Section 1.2 hereof).

     WHEREAS, the Company has requested IFC to make term loans to
it,  in each case 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,  IFC  proposes to acquire shares  of  the  Company
pursuant to Article 4 hereof;

      WHEREAS,  IFC  is willing to make such term  loans  to  the
Company  and to subscribe for such shares of 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 "IFC Special Conditions".  A  document
entitled  "Investment Agreement General Conditions" (the "General
Conditions")  is  appended hereto.  Such two  documents  together
constitute  the IFC Investment Agreement, dated the date  of  the
IFC Special Conditions between IFC and the Company (collectively,
this "Agreement").  If any provision of the General Conditions is
inconsistent with a provision of the IFC Special Conditions,  the
provision of the IFC Special Conditions shall prevail.

      Section  1.2    General Definitions.  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.

                           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 IFC Loans

     Section 3.1    The IFC Loans.

      (a)   On  the terms and subject to the conditions  of  this
Agreement, IFC agrees to lend to the Company the amount of up  to
fifty-seven million dollars ($57,000,000), consisting of:

                    (i)  the A Loan in the principal amount of up
               to   twenty-one   million  Dollars  ($21,000,000),
               divided   initially   into  Tranches   with   each
               Disbursement constituting a separate Tranche; and

                    (ii) the B Loan in the principal amount of up
               to thirty-six million Dollars ($36,000,000), which
               consists of B Loan 1 ("B Loan 1") and B Loan 2 ("B
               Loan  2"), each in the principal amount of  up  to
               ten million Dollars ($10,000,000) and B Loan 3 ("B
               Loan  3") in the principal amount of up to sixteen
               million Dollars ($16,000,000).

      (b)   The  IFC Loans are 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 IFC Loans
by  delivering to IFC, at least ten (10) Business Days  prior  to
the  proposed  date of Disbursement, an IFC 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)   In the IFC Disbursement Request, in respect of any  A
Loan  Disbursement, the Company shall also propose a date  to  be
the  Rate Setting Date for the Tranche which corresponds  to  the
relevant Disbursement.  Such date shall be the Rate Setting  Date
unless  the conditions of disbursement applicable to the relevant
Disbursement   have   not  by  then  been  fulfilled   to   IFC's
satisfaction  or  waived by IFC, in which case the  Rate  Setting
Date shall be that date which is two (2) Business Days after  IFC
has  notified  the  Company  that  the  relevant  conditions   of
disbursement  have  been so fulfilled or  waived.   In  no  case,
however,  shall  the  Rate Setting Date be  less  than  five  (5)
Business Days after IFC receives the IFC Disbursement Request nor
less  than two (2) Business Days before the date of the  relevant
Disbursement, unless IFC otherwise agrees.

      (c)   In  preparation for an IFC Disbursement  Request,  in
respect  of any A Loan Disbursement, the Company may at any  time
(but  not  more  often than once in any calendar month)  ask  IFC
which rate service (among those listed in the definition of Fixed
Rate Swap Equivalent) IFC intends to use to determine the Tranche
Interest Rate and an indication of what the Tranche Interest Rate
would  be  as  of the date of such IFC Disbursement Request.   As
promptly as practicable after such inquiry, IFC shall advise  the
Company  of  the relevant rate service (and if such rate  service
displays information which changes during the course of the  day,
rather than staying fixed for the whole day, as of what time  the
relevant  information  would  be  obtained)  and  the  indicative
Tranche Interest Rate.

      (d)   IFC shall make Disbursements of the IFC Loans to  the
credit  of  the  Company into the Offshore Retention  Account  in
accordance  with  the  provisions  of  the  Trust  and  Retention
Agreement.

      (e)  Each Disbursement of the IFC Loans shall be made in an
aggregate  amount  (except with respect to the last  Disbursement
thereof) of not less than four million Dollars ($4,000,000),  and
there  shall be no more than eight (8) Disbursements of  the  IFC
Loans.  The disbursement ratio between the A Loan and the B  Loan
shall be pro rata in accordance with the maximum amount of such A
Loan and B Loan set forth in Section 3.1(a) above.

     Section 3.3    Interest.

      (a)   Subject to Section 3.9 hereof, the Company shall  pay
interest  on  the  A  Loan  from  time  to  time  outstanding  in
accordance with this Section 3.3(a).

                     (i)   Interest shall accrue from day to  day
               and  shall  be  payable  on the  Interest  Payment
               Dates.   Interest shall be pro-rated on the  basis
               of  a  360-day  year  and 30  day  months  in  the
               relevant interest period.

                     (ii)  Until  and including the Consolidation
               Date, the Company shall pay interest on the amount
               of  each Tranche outstanding from time to time  at
               the  Tranche  Interest  Rate  applicable  to  that
               Tranche.  IFC shall determine the Tranche Interest
               Rate  applicable to each Tranche on  the  relevant
               Rate  Setting Date and shall promptly  notify  the
               Company of such rate.

                     (iii)     With effect from the day after the
               Consolidation Date, the Company shall pay interest
               at  the A Loan Interest Rate on the full amount of
               the  A  Loan outstanding from time to  time.   IFC
               shall determine the A Loan Interest Rate not  less
               than   two   (2)   Business   Days   before    the
               Consolidation Date, and shall promptly notify  the
               Company of such rate.

                     (iv) The determination by IFC, from time  to
               time, of each Tranche Interest Rate or the A  Loan
               Interest Rate, as the case may be, shall be  final
               and  conclusive and shall bind the Company (unless
               the  Company shows to IFC's satisfaction that  any
               such determination involved clerical error).

      (b)   Subject to Section 3.9 hereof, the Company shall  pay
interest  on  the  B  Loan  from  time  to  time  outstanding  in
accordance with this Section 3.3(b).

                     (i)   The Company shall pay interest on  the
               principal amount of the B Loan from time  to  time
               outstanding  during the relevant B  Loan  Interest
               Period.

                     (ii) Interest shall accrue from day to  day,
               be  pro-rated on the basis of a 360-day  year  for
               the  actual number of days in the relevant B  Loan
               Interest Period and be due and payable in  Dollars
               on the Interest Payment Date immediately following
               the end of the relevant B Loan Interest Period.

                    (iii)     The interest rate on each of B Loan
               1 and B Loan 2 shall be three and one-half percent
               (3.50%) per annum and the interest rate on B  Loan
               3  shall  be three and one quarter percent (3.25%)
               per annum, above the rate which appears on the Dow
               Jones  Market Screen Page the column headed  "USD"
               as  of 11.00 a.m., London time, on the relevant  B
               Loan  Interest Determination Date for  one  month,
               two  months, three months or six months, whichever
               period  is closest to the duration of the relevant
               B  Loan  Interest Period (or, if two  periods  are
               equally  close to the duration of the  relevant  B
               Loan Interest Period, the longer one) (the "B Loan
               Floating Rate").

                     (iv) If, for any reason, the B Loan Floating
               Rate cannot be determined by reference to the  Dow
               Jones  Market  Screen Page on any B Loan  Interest
               Determination  Date,  IFC  shall  so  notify   the
               Company  and the Participants forthwith and  shall
               determine the B Loan Floating Rate on that B  Loan
               Interest  Determination Date  in  accordance  with
               subsection  (iii)  above mutatis  mutandis,  using
               rates  advised to IFC by any two (2) of the  banks
               (or  by  the bank if only one) whose rate(s)  were
               last  quoted on the Dow Jones Market Screen  Page.
               If  the  services of the Dow Jones  Market  Screen
               Page  cease  to  be  available  as  a  result   of
               discontinuation of such service, IFC shall  notify
               the  Company  and the Participants  forthwith  and
               shall  determine the B Loan Floating Rate  on  any
               relevant  B  Loan Interest Determination  Date  in
               accordance  with  subsection (iii)  above  mutatis
               mutandis, using rates advised to IFC by three  (3)
               major  banks  active  in the eurodollar  interbank
               market   in   London   selected   by   IFC   after
               consultation    with   the   Company    and    the
               Participants.

                     (v)  The determination by IFC, from time  to
               time,  of the B Loan Floating Rate shall be  final
               and  conclusive and shall bind the Company (unless
               the  Company shows to IFC's satisfaction that  any
               such determination involved clerical error).

     Section 3.4    Fees.

     (a)  The Company shall pay to IFC in Dollars:

                    (i)  a commitment fee at the rate of:

                               (A)   one percent (1.0%) per annum
                    on that part of the A Loan as shall not, from
                    time  to time, have been canceled by  IFC  or
                    disbursed  to the Company, and in  accordance
                    with subsection (b) below; and

                               (B)  one-half of one percent (.5%)
                    per annum on that part of the B Loan as shall
                    not,  from  time to time, have been cancelled
                    by  IFC  or disbursed to the Company, and  in
                    accordance with subsection (b) below;

                         (ii) (A)  a front-end fee for the A Loan
                    of  an  amount of one percent (1.0%)  of  the
                    total amount of the A 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 A Loan Disbursement; and

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

                     (iii)     an annual fee equal to twenty-five
               thousand    six   hundred   twenty-five    Dollars
               ($25,625),  to  be  paid  on  the  first  Interest
               Payment  Date  and  every second Interest  Payment
               Date thereafter;

                     (iv)  a  syndication fee  of  three  hundred
               thirty  thousand Dollars ($330,000),  to  be  paid
               within  thirty  (30) days after the  date  of  the
               first  Participation Agreement, but in  any  event
               prior   to   the   date  of  the  first   B   Loan
               Disbursement;

                     (v)   a  fee  of fifty eight thousand  seven
               hundred fifty Dollars ($58,750) to be paid  within
               thirty  (30) days after the execution of  the  DEG
               Investment Agreement;

                     (vi)  an annual loan administration  fee  of
               five    thousand   Dollars   ($5,000)   for   each
               Participant,  the  first such  payment  being  due
               within  thirty  (30) days after the  date  of  the
               first Participation Agreement to be signed (but in
               any  event prior to the first B Loan Disbursement)
               and  subsequent payments being due on every second
               Interest Payment Date thereafter until the B  Loan
               is repaid in full.

      (b)   The commitment fee specified in subsection (a)(i) above:

                     (i)   (A)   in respect of the  A  Loan,
               commences   to  accrue  on  the   date   this
               Agreement is executed; and

                               (B)   in respect of the B Loan  or
                    relevant part thereof, commences to accrue on
                    the  date  each  Participation  Agreement  is
                    executed;

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

                     (iii)      is  payable by the  Company  with
               respect   to  the  IFC  Loans,  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 A Loan on each Principal
Payment  Date  in  accordance with the following  loan  repayment
schedule.


         Date Payment Due     Principal Amount Due


  1.        March 15, 2001       $  550,955.35
  2.        September 15, 2001   $  578,029.29
  3.        March 15, 2002       $  606,433.65
  4.        September 15, 2002   $  636,233.80
  5.        March 15, 2003       $  667,498.33
  6.        September 15, 2003   $  700,299.20
  7.        March 15, 2004       $  734,711.90
  8.        September 15, 2004   $  770,815.64
  9.        March 15, 2005       $  808,693.53
  10.       September 15, 2005   $  848,432.73
  11.       March 15, 2006       $  890,124.71
  12.       September 15, 2006   $  933,865.44
  13.       March 15, 2007       $  979,755.59
  14.       September 15, 2007   $1,027,900.77
  15.       March 15, 2008       $1,078,411.82
  16.       September 15, 2008   $1,131,404.98
  17.       March 15, 2009       $1,187,002.22
  18.       September 15, 2009   $1,245,331.51
  19.       March 15, 2010       $1,306,527.10
  20.       September 15, 2010   $1,370,729.84
  21.       March 15, 2011       $1.438.087.50
  22.       September 15, 2011   $1,508,755.12

                TOTAL          $ 21,000,000

       (b) (i) The Company shall repay B Loan 1 on each Principal
Payment  Date  in  accordance with the following  loan  repayment
schedule.


       Date Payment Due     Principal Amount Due


  1.        March 15, 2001       $262,359.69
  2.        September 15, 2001   $275,252.04
  3.        March 15, 2002       $288,777.93
  4.        September 15, 2002   $302,968.48
  5.        March 15, 2003       $317,856.35
  6.        September 15, 2003   $333,475.81
  7.        March 15, 2004       $349,862.81
  8.        September 15, 2004   $367,055.07
  9.        March 15, 2005       $385,092.16
  10.       September 15, 2005   $404,015.58
  11.       March 15, 2006       $423,868.91
  12.       September 15, 2006   $444,697.83
  13.       March 15, 2007       $466,550.28
  14.       September 15, 2007   $489,476.56
  15.       March 15, 2008       $513,529.44
  16.       September 15, 2008   $538,764.27
  17.       March 15, 2009       $565,239.15
  18.       September 15, 2009   $593,015.00
  19.       March 15, 2010       $622,155.76
  20.       September 15, 2010   $652,728.49
  21.       March 15, 2011       $684,803.57
  22.       September 15, 2011   $718,454.82

           TOTAL                $ 10,000,000


            (ii)      The  Company shall repay B Loan 2  on  each
Principal  Payment  Date in accordance with  the  following  loan
repayment schedule.


        Date Payment Due     Principal Amount Due


  1.        March 15, 2001       $262,359.69
  2.        September 15, 2001   $275,252.04
  3.        March 15, 2002       $288,777.93
  4.        September 15, 2002   $302,968.48
  5.        March 15, 2003       $317,856.35
  6.        September 15, 2003   $333,475.81
  7.        March 15, 2004       $349,862.81
  8.        September 15, 2004   $367,055.07
  9.        March 15, 2005       $385,092.16
  10.       September 15, 2005   $404,015.58
  11.       March 15, 2006       $423,868.91
  12.       September 15, 2006   $444,697.83
  13.       March 15, 2007       $466,550.28
  14.       September 15, 2007   $489,476.56
  15.       March 15, 2008       $513,529.44
  16.       September 15, 2008   $538,764.27
  17.       March 15, 2009       $565,239.15
  18.       September 15, 2009   $593,015.00
  19.       March 15, 2010       $622,155.76
  20.       September 15, 2010   $652,728.49
  21.       March 15, 2011       $684,803.57
  22.       September 15, 2011   $718,454.82

           TOTAL                $ 10,000,000



            (iii)     The Company shall repay B Loan  3  on  each
Principal  Payment  Date in accordance with  the  following  loan
repayment schedule.

         Date Payment Due     Principal Amount Due


  1.        March 15, 2001       $   690,192.87
  2.        September 15, 2001   $   722,973.58
  3.        March 15, 2002       $   757,311.21
  4.        September 15, 2002   $   793,279.71
  5.        March 15, 2003       $   830,956.53
  6.        September 15, 2003   $   870,422.81
  7.        March 15, 2004       $   911,763.54
  8.        September 15, 2004   $   955,067.75
  9.        March 15, 2005       $ 1,000,428.69
  10.       September 15, 2005   $ 1,047,944.05
  11.       March 15, 2006       $ 1,097,716.15
  12.       September 15, 2006   $ 1,149,852.18
  13.       March 15, 2007       $ 1,204,464.41
  14.       September 15, 2007   $ 1,261,670.45
  15.       March 15, 2008       $ 1,321,593.49
  16.       September 15, 2008   $ 1,384,362.58

                  TOTAL          $16,000,000.00

        (c)  The dates for payment of principal of the IFC  Loans
are  intended  to  coincide  with the relevant  Interest  Payment
Dates.

        (d)  From  time  to time while the IFC  Loans  are  being
disbursed,  any  part of the IFC Loans which has  been  disbursed
shall be allocated for repayment on each of the dates set out  in
subsections (a) and (b) above, in amounts which are pro  rata  to
the  amounts of the respective repayment installments  (with  IFC
adjusting  those allocations as necessary so as to achieve  whole
numbers in each case).

        (e) Notwithstanding the amortization schedules set out in
subsections  (a)  and (b) above, if the full amount  of  the  IFC
Loans   is   not   disbursed,  (i)  IFC  shall  recalculate   the
amortization schedules in order to provide for repayment  of  the
IFC  Loans on the same dates and on the basis of the amortization
set  out  above and shall deliver such amortization schedules  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 subsections (a) and (b) above.

       Section 3.6  Voluntary Prepayment.

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

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

                    (ii)     the Company simultaneously pays  (x)
               all  accrued  interest on the amount  of  the  IFC
               Loans  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 six million Dollars ($6,000,000);

                    (iv)     the Company simultaneously  prepays,
               pro  rata, the outstanding principal amount of the
               DEG  Loan  (or  portions 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 Loan Documents; and

                    (v)  if IFC so requires, the Company delivers
               to  IFC, prior to the date of prepayment, evidence
               satisfactory   to   IFC  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
               IFC, that none are required.

       (b) Amounts prepaid under this Section:

                    (i)  shall  be  allocated  by  IFC  pro  rata
               between  the  A Loan and the B Loan in  proportion
               to  their respective principal amounts outstanding
               on the date of any such prepayment; and

                    (ii)     shall then be applied by IFC to  the
               respective  outstanding repayment installments  of
               the A Loan and the B Loan on a pro rata basis.

         (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  IFC
relating  to the IFC Loans hereunder and under the Loan Documents
shall  become immediately due and payable without any  action  on
the part of IFC, and the Company shall pay to IFC an amount equal
to  all such Obligations due and owing to IFC, including, without
duplication, all accrued interest on the principal amount of  the
IFC  Loans  to be prepaid and all other amounts then due  to  IFC
hereunder.   Amounts prepaid under this subsection (a)  shall  be
allocated and applied as provided in Section 3.7(c)(iii).

        (b)  The  Company shall prepay, pro rata, the outstanding
principal  amount  of  the  IFC Loans (or  portions  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 IFC Loans (or
portions thereof, as applicable), the Maintenance Amount (if any)
on  the  IFC Loans (or portions thereof, as applicable)  and  all
other  amounts then due hereunder or under any of the other  Loan
Documents.   Amounts prepaid under this subsection (b)  shall  be
allocated and applied as provided in Section 3.7(c)(iii).

       (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 IFC, IFC 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  IFC  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)
                    IFC  shall  receive an opinion of counsel  in
                    form and substance reasonably satisfactory to
                    IFC  or  other evidence satisfactory  to  IFC
                    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 IFC,
                    and  (VI)  IFC shall have received  from  the
                    Company  and  the Independent  Engineer  such
                    certificates  or other evidence  as  IFC  may
                    reasonably  require regarding  the  foregoing
                    matters, then IFC 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, IFC 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 IFC Loans  at
               the time outstanding, pro rata with prepayment  of
               the  DEG  Loan,  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  (c)(i)(B) above and the  Company  (I)  has
               not  notified  IFC  promptly  that  it  wishes  to
               repair,  restore  or replace the Project  or  (II)
               has not otherwise complied with the provisions  of
               clause   (c)(i)  above  relative  to  the  repair,
               restoration  or  replacement of the  Project,  IFC
               may  choose  to  apply the Insurance  Proceeds  to
               prepay  the  IFC Loans, pro rata  with  prepayment
               of the DEG Loan, together with accrued interest.

                     (iii)     Amounts   prepaid    under    this
               subsection  (c)  and  under subsection  (e):

                             (A)  shall be allocated by  IFC  pro
                    rata  between the A Loan and the  B  Loan  in
                    proportion  to  their  respective   principal
                    amounts  outstanding  on  the  date  of  such
                    prepayment; and

                             (B) shall then be applied by IFC  to
                    all    respective    outstanding    repayment
                    installments of the A Loan and the B Loan  on
                    a pro rata basis.

        (d)  Upon  the  occurrence of a Capacity  Shortfall,  the
Company  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  of  all  outstanding IFC Loans, multiplied  by  (ii)  the
Capacity Shortfall Percentage and 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.   Such
prepayment  of  the  IFC  Loan shall be applied  as  provided  in
Section  3.7(c)(iii)  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 IFC and DEG, 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  IFC Loans 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 IFC
Loans  to  be  prepaid  and all other amounts  then  due  to  IFC
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 IFC 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 Sections 3.7(b) and 3.7(e) hereof.

       Section 3.8      Prepayment Premium.

        (a)  On  the  date of any prepayment of  the  A  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 Dollars 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  A Loan to be prepaid bears to the amount of the  A  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 A Loan at the applicable Tranche  Interest
Rate(s)  (in  the case of a prepayment prior to the Consolidation
Date) or at the A Loan Interest Rate (in the case of a prepayment
on  or subsequent to the Consolidation Date) 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  A  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  A  Loan at a rate per annum equal to the aggregate of the  A
Loan  Spread  and 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  A  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.

        (b)  The  determination by IFC of the prepayment  premium
under  subsection (a) above shall be final and conclusive  unless
the  Company  shows,  to  the  satisfaction  of  IFC,  that  such
determination involved clerical error.

       Section 3.9  Additional Interest.

        (a)  Without limiting the remedies available to IFC 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 IFC to the Company, the Company  shall
pay  in  US Dollars, by way of liquidated damages, in respect  of
the amount of (i) any A Loan payment due and unpaid, interest  at
the relevant Tranche Interest Rate(s) or A Loan Interest Rate  in
effect  from time to time plus two percent (2.0%) per annum  from
the  date any such payment became due and (ii) any B Loan payment
due  and  unpaid, interest at the B Loan Floating Rate in  effect
from time to time 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 Dollars.

        (a)  The  Company shall make all payments  of  principal,
interest,  fees,  and any other payment due  to  IFC  under  this
Agreement  in  Dollars, no later than 2:00 p.m.  (New  York  City
time)  on  the date when due, in immediately available funds,  at
Northern  Trust International Banking Corporation, New York,  New
York  (Account  No.  CHIPS ID 142255, in favor  of  International
Finance Corporation) or at such other bank in New York, New  York
as  IFC  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.

       (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 Dollars does not novate, discharge or satisfy
the  obligation  of  the Company to pay in  Dollars  all  amounts
payable  under this Agreement except to the extent  IFC  actually
receives Dollars in its account in New York, New York.

        (d)  If a currency other than Dollars is tendered or paid
(or recovered under any judgment) and the amount IFC receives  at
its designated account in New York, New York, upon conversion  at
the  then-market rate of exchange, falls short of the full amount
of  Dollars owed to IFC, then the Company shall continue  to  owe
IFC,  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, IFC
may require the Company to pay (or reimburse IFC) in any currency
other than Dollars for:

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

                    (ii)     any fees, costs and expenses payable
               under  Section 9.3 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  IFC  at
any  time receives less than the full amount then due and payable
to  it  under  this Agreement, IFC may allocate  and  apply  such
payment  in  any way or manner and for such purpose  or  purposes
under  this  Agreement as IFC 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 IFC.

        (a)  IFC may, by notice to the Company, suspend or cancel
the  right  of the Company to Disbursements of the IFC Loans,  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  IFC cancels the subscription  or
               acquisition   by   it  of  any   Shares   or   any
               disbursement  on account thereof  as  provided  in
               Section 4.3 hereof;

                    (iii)    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
               IFC, be imminent;

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

                    (v)  if  the  DEG Loan has been suspended  or
               cancelled; or

                   (vi)    on or after September 30, 2000.

        (b) Upon the giving of any such notice, the right of  the
Company  to  receive, and the obligation of IFC to disburse,  the
undisbursed part of the IFC Loans shall be suspended or canceled,
as  the  case  may  be.   The exercise by IFC  of  its  right  of
suspension  does not preclude IFC 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
IFC  to  make  any Disbursement of the IFC Loans 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 IFC, irrevocably request IFC  to  cancel  the
undisbursed  portion of the IFC Loans 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
IFC is reasonably satisfied that the Company has sufficient long-
term  funding available, on terms satisfactory to IFC, to satisfy
the  Financial  Plan, and IFC receives, 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, IFC shall cancel  the
entire undisbursed portion of the IFC Loans effective as of  that
Interest Payment Date.

        Section 3.15 Illegality of Participation.   If, after the
date of this Agreement, any change made in any applicable law  or
regulation  or  official  directive  (or  its  interpretation  or
application  by  any Authority charged with its  administration),
makes it unlawful for any Participant to continue to maintain  or
to  fund  its Participation, then the Company shall, upon request
by  IFC  (but  subject to the approval of the Nepal Rastra  Bank,
which  the Company agrees to take all reasonable steps to  obtain
as  quickly  as  possible, if such approval  is  then  required),
prepay  immediately in full that part of the  B  Loan  which  IFC
advises  corresponds  to that Participation,  together  with  all
accrued interest and the Maintenance Amount (if any) on that part
of the B Loan (and, if such prepayment is not made on an Interest
Payment  Date,  any amount payable in respect of  the  prepayment
under  Section 3.16 hereof).  In addition, upon receipt  of  such
request  from  IFC, the Company shall have no  further  right  to
disbursement   of  the  undisbursed  portion  of   the   B   Loan
corresponding to that Participation.

       Section 3.16 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 an IFC Disbursement Request or  to
               prepay  in accordance with a notice of prepayment;
               or

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

and  as  a result IFC or any Participant incurs any cost, expense
or loss, then the Company shall immediately pay to IFC the amount
which IFC 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 3.16 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  IFC  Loans (but in the case of a late payment, after  taking
into  account any additional interest received under Section  3.9
hereof).

       Section 3.17 Maintenance Amount.  On each Interest Payment
Date,  the Company shall pay, in addition to interest, the amount
which  IFC  from  time  to time notifies  to  the  Company  in  a
Maintenance   Amount   Certification  as  being   the   aggregate
Maintenance Amount of IFC and each Participant accrued and unpaid
prior to that Interest Payment Date.

                           ARTICLE 4

                        IFC Subscription

       Section 4.1  Subscription and Disbursement.

        (a)  On  the terms and subject to the conditions of  this
Agreement, IFC agrees to subscribe and pay for ten percent  (10%)
of  the  ordinary shares of the Company, par value  Rs.  100  per
share  (the  "IFC  Shares") at a purchase price  of  ten  Dollars
($10.00)  per  share at the time of subscription of  each  share;
provided,  however, that IFC shall not be obligated to  subscribe
and  pay for any IFC Shares unless the Sponsor Shareholders shall
have,  prior to IFC's Subscription, subscribed and paid into  the
Company  all of the Sponsor Shareholders' equity then  due  under
the  Financial  Plan  in accordance with  Section  2.1  of  their
respective Subscription Agreements at the purchase price  of  ten
Dollars  ($10.00)  per  share; and  provided  further,  that  the
aggregate  purchase  price  of  the  IFC  Shares  which  IFC  may
subscribe  pursuant to this Section 4.1 shall  not  exceed  three
million Dollars ($3,000,000) (the "Aggregate Purchase Price")  or
300,000 shares.

        (b) The Company may request IFC to subscribe for the  IFC
Shares  by  delivering to IFC, at least ten  (10)  Business  Days
prior  to  the  proposed  date  of subscription,  a  Subscription
Request in the form of Schedule 4.1(b) hereof.

       (c) IFC shall disburse funds under the IFC Subscription to
the  credit of the Offshore Retention Account in accordance  with
the provisions of the Trust and Retention Agreement.

        (d) Each request shall be for a subscription of an amount
(except  with respect to the last such request) of not less  than
two hundred seven thousand Dollars ($207,000), and there shall be
no more than eight (8) Subscriptions.

        (e) Notwithstanding anything contained in this Agreement,
IFC may, at any time and from time to time, in its discretion and
without  request by the Company, subscribe and pay, on the  terms
set  out  in  subsection (a) above, for any or  all  of  the  IFC
Shares.

        (f)  Upon each subscription and payment by IFC under this
Section 4.1, the Company shall:

                    (i)  issue  to  IFC, or as IFC  directs,  the
               number  of  IFC Shares so subscribed free  of  all
               Liens,  charges and encumbrances and  which  shall
               rank  pari  passu in all respects with  all  other
               Shares,  and deliver to IFC, or as IFC directs,  a
               share  certificate  evidencing  valid  legal   and
               beneficial title to such number of IFC Shares;

                    (ii)     furnish to IFC evidence satisfactory
               to  IFC  that such number of IFC Shares  has  been
               duly   and   validly   authorized,   issued    and
               delivered;  are  freely  transferable;  that   all
               requisite   corporate   formalities   and    legal
               requirements     in    connection     with     the
               authorization,  issue  and delivery  thereof  have
               been  duly  satisfied;  all  the  information  and
               documents  necessary  for  the  issuance  of   all
               Governmental    Approvals   required    for    the
               subscription  of,  and  remittance  of,  the   IFC
               Shares have been obtained; and

                    (iii)    use  the  net proceeds  of  the  IFC
               Subscription to subscribe for ordinary  shares  of
               the Company.

        Section 4.2  Actions Prohibited until IFC Shares  Issued.
Until all of the IFC Shares have been subscribed or the right  of
the  Company  to  further  subscriptions  has  been  canceled  as
provided in Section 4.3 below, whichever first occurs:

        (a)  the  Company shall, from and after the date  of  the
initial  IFC  Subscription,  maintain  a  sufficient  number   of
authorized and unissued Shares to satisfy in full the exercise of
IFC's rights under the IFC Subscription; and

       (b) the Company shall not, unless IFC otherwise agrees:

                    (i) issue any Shares of any class, except (A)
               in  accordance with the Financial Plan or  (B)  as
               permitted  by this Agreement, the Share  Retention
               and  Project  Funds  Agreement,  the  Subscription
               Agreements, and the Shareholders' Agreement;

                    (ii)     increase  its respective  authorized
               share  capital  except  in  accordance  with   the
               provisions of this Agreement, the Share  Retention
               and  Project  Funds  Agreement,  the  Subscription
               Agreements and the Shareholders' Agreement; or

                    (iii)    change  the par  value  of,  or  the
               rights  attached  to, any of  the  Shares  of  any
               class;

                    (iv)     issue  Shares with  more  privileged
               rights than the IFC Shares;

                     (v)  reduce  its  respective  share  capital
               through the redemption (or otherwise) of Shares;

                    (vi)     issue  any options or warrants  with
               respect to its  share capital; or

                    (vii)   take any other action by amendment of
               its   respective  Charter  Documents  or   through
               reorganization,  consolidation,  sales  of   share
               capital   (other   than  sales  to   Sponsors   as
               contemplated  by the Subscription  Agreements  and
               the  Share Retention and Project Funds Agreement),
               merger  or  sale  of  assets, or  otherwise  which
               could  reasonably  be  expected  to  result  in  a
               dilution   of   the  interest   in   the   Company
               represented by the IFC Shares.

         Section   4.3   Suspension  and  Cancellation   of   IFC
Subscription.

        (a)  IFC may, by notice to the Company, suspend or cancel
the right of the Company to the IFC Subscription:

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

                    (ii)     if  the  right  of  the  Company  to
               disbursements  of the IFC Loans  is  suspended  or
               canceled as provided in Section 3.12 hereof;

                    (iii)    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
               IFC, be imminent;

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

                    (v)  if  the  DEG Loan has been suspended  or
               cancelled; or

                   (vi)    on or after September 30, 2000.

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

        Section  4.4  Agreement to Cooperate.  The Company  shall
fully  cooperate  with IFC and shall provide all the  information
and  documents  necessary for the issuance  of  all  Governmental
Approvals required for the subscription by IFC of the IFC  Shares
and  for  the remittance of the proceeds of the sale of  the  IFC
Shares and dividends.

        Section  4.5  IFC Board Seat.  Following subscription  by
IFC of the IFC Shares, the Company shall, to the extent permitted
by  applicable  law,  take such action that will  enable  IFC  an
opportunity to elect one representative to the board of directors
of the Company.

                           ARTICLE 5

                 Representations and Warranties

        Section 5.1  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  IFC  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 5.1 hereof shall survive the execution and delivery
of  this  Agreement, any Disbursement of the  IFC  Loans  or  any
subscription and disbursement under the IFC Subscription.

        Section  5.2   Rights and Remedies  not  Limited.   IFC'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 IFC (or  the
Participants) into the affairs of the Company;

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

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

                           ARTICLE 6

                   Conditions of Disbursement

        Section  6.1   Conditions  of Initial  Disbursement.  The
obligation  of IFC to make the initial Disbursement  of  the  IFC
Loans or the initial subscription and disbursement under the  IFC
Subscription  shall be subject to the fulfillment,  in  a  manner
satisfactory to IFC, prior to or concurrently with the making  of
such initial Disbursement or subscription and disbursement of the
IFC  Subscription, of the conditions set forth in Section 3.1  of
the General Conditions.

         Section   6.2   Conditions  of  All  Disbursements   and
Subscriptions and Disbursements under the IFC Subscription.   The
obligation  of IFC to make any Disbursement of the IFC  Loans  or
any  subscription  and  disbursement under the  IFC  Subscription
shall   also  be  subject  to  the  fulfillment,  in   a   manner
satisfactory to IFC, prior to or concurrently with the making  of
such Disbursement or subscription and disbursement under the  IFC
Subscription, of the conditions set forth in Sections  3.2,  3.3,
3.4 and 3.5 of the General Conditions, and to the fulfillment  of
the  further condition that the proceeds of such Disbursement  or
subscription and disbursement under the IFC Subscription will not
be  in  reimbursement  of,  or  used  for,  expenditures  in  the
territories  of any country which is not a member of  IFC  (other
than any country which is a member of the International Bank  for
Reconstruction  and  Development) or for  goods  produced  in  or
services supplied from such territories.

       Section 6.3  Disbursement Relationship Among IFC Loans and
the IFC Subscription.

        (a)   The obligation of IFC to make any Disbursements  of
the  IFC  Loans  or subscription and disbursement under  the  IFC
Subscription shall also be subject to compliance by  the  Sponsor
Shareholders with their obligations described in Section  2.1  of
the Subscription Agreements.

        (b)  Notwithstanding anything provided in this Agreement,
the  A  Loan  and  the  B  Loan shall be disbursed  pro  rata  in
accordance with the maximum respective principal amounts of  such
A  Loan  and B Loan set forth in Section 3.1(a) hereof,  and  IFC
shall not in any event be obliged to make any Disbursement of the
B Loan except to the extent that funds shall be provided therefor
by   the   Participants  under  their  respective   Participation
Agreements.

        (c)  The  obligation of IFC to make any  subscription  or
disbursement  under the IFC Subscription is also subject  to  the
conditions   that   immediately  after   such   subscription   or
disbursement  (i) IFC would not have subscribed  or  paid  for  a
higher  proportion  of the IFC Shares than the  proportion  which
each  of  the Company's other shareholders has by then subscribed
or  paid  for  of the total number of Shares to be subscribed  by
such  shareholder in accordance with the Financial Plan, and (ii)
IFC  would not have subscribed or paid a higher proportion of the
IFC  Subscription to the outstanding amount under the  IFC  Loans
than  the proportion which the IFC Subscription bears to the  IFC
Loans as set forth in the Financial Plan.

       Section 6.4  No Waivers.

        (a)  The  rights and remedies of IFC 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  IFC  (or the Participants) into the  affairs  of  the
Company,  by  the execution or the performance of this  Agreement
(or  the  Participation Agreements) or by any other act or  thing
which may be done by or on behalf of IFC (or the Participants) in
connection  with this Agreement (or the Participation Agreements)
and  which might, apart from this Section, prejudice such  rights
or remedies.

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

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

                           ARTICLE 7

                      Particular Covenants

       Section 7.1  Particular Covenants.

        (a)  The  Company shall observe and perform the covenants
set forth in Articles 5 and 6 of the General Conditions.

        (b)  The Company shall make promptly all required filings
with  Governmental  Authorities, or  financial  institutions,  in
Nepal to permit IFC to remit to the United States in Dollars  any
amounts paid to IFC in connection with the IFC Shares.


                           ARTICLE  8

                       Events of Default

        Section  8.1  Events of Default.  If one or more  of  the
Events   of  Default  specified  in  Article  7  of  the  General
Conditions shall have occurred and be continuing, IFC 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 9

                         Miscellaneous

        Section  9.1   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.

        Section  9.2   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 IFC certified by an authorized representative  of
the  Company,  which translation shall be the  governing  version
between the Company and IFC.

        Section 9.3  Expenses.  If any amount owing to IFC  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 IFC Loans, the IFC Shares or otherwise payable under this
Agreement), professional consultant and attorneys' and other fees
and expenses incurred in respect of such collection.

       Section 9.4  Jury Trial.

        (a)  The  Company hereby acknowledges that IFC  shall  be
entitled  under applicable law, including the provisions  of  the
International  Organizations Immunities Act, to immunity  from  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  IFC
in any Federal District Court of the United States of America.

       (b) 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  IFC
in  any  forum  in which IFC is not entitled to immunity  from  a
trial by jury.

       Section 9.5  Confidential Information.

        (a)  IFC may (i) disclose to any participant in  the  IFC
Loans,  or  (ii)  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  IFC,  a disclosure of information  by  IFC  in  the
circumstances  contemplated by this subsection does  not  violate
any  duty  owed to the Company or agreement between IFC  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 Representative1



                    INTERNATIONAL FINANCE CORPORATION


                    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 2/



               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                2,653,000
  Costs
  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 IFC DISBURSEMENT REQUEST



                      [COMPANY LETTERHEAD]

[Date]

International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433
United States of America

Attention: Director, Power Department


Ladies and Gentlemen:

                                   Investment No. 7365
           Request for Loan Disbursement No. [    ]*

1.    Please  refer  to  the IFC Investment Agreement  (the  "IFC
Investment Agreement") dated as of the Closing Date between Bhote
Koshi   Power   Company  Private  Limited  (the  "Company")   and
International Finance Corporation ("IFC").  Terms defined in  the
IFC  Investment  Agreement 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 _______________________________ ($__________) under the
A        Loan,       and       of       the       amount       of
______________________________________ ($____________) under  the
B  Loan**  (the "Disbursement") in accordance with the provisions
of  Section  3.2 of the IFC Special Conditions.  With respect  to
the  A  Loan, the Company proposes [insert date] to be  the  Rate
Setting Date for the requested Tranche.  You are requested to pay
such  amount to the credit of the Offshore Retention  Account  in
accordance with the Trust and Retention Agreement.

3.    IFC  has heretofore disbursed the sum of __________________
Dollars  ($__________)  under  the  A  Loan,  and  the   sum   of
_______________________________ ($_______________)  under  the  B
Loan  pursuant  to the IFC Investment Agreement.   Following  the
Disbursement  of the amount requested hereby, there  will  remain
undisbursed _________________ Dollars ($__________) under  the  A
Loan      and     __________________________________      Dollars
($__________________) under the B Loan.

4.    Attached hereto are (i) a signed but undated receipt*** for
the  amount  hereby  requested to be disbursed  and  the  Company
hereby  authorizes IFC to date such receipt as  of  the  date  of
actual  disbursement by IFC 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 IFC 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 IFC Investment  Agreement
          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 IFC Investment Agreement;

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

          (e)   the  proceeds of the requested disbursement  will
          not  be  in reimbursement of, or used for, expenditures
          in the territories of any country which is not a member
          of IFC (other than any country which is a member of the
          International Bank for Reconstruction and  Development)
          or for goods produced in or services supplied from such
          territories;

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

          (g)   since  the date of the IFC Investment  Agreement,
          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; and

          (h)   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  IFC  Disbursement Request 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 IFC and will repay the amount disbursed  upon
demand  by  IFC if disbursement is made prior to the  receipt  of
such notice.

                         Yours truly,


                         BHOTE  KOSHI  POWER
                         COMPANY PRIVATE LIMITED


                         By:___________________________________
                            Authorized Representative

Copy to:  Manager, Accounting Division
          International Finance Corporation



                      SCHEDULE 3.2(a)(ii)

             FORM OF IFC LOANS DISBURSEMENT RECEIPT



                      [COMPANY LETTERHEAD]

[Date]

International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433
United States of America

Attention:  Manager, Accounting Division

Ladies and Gentlemen:

                      Investment No. 7365
            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 International Finance
Corporation ("IFC") under the IFC Loans, consisting of the sum of
______________________ Dollars ($________________)  under  the  A
Loan   and   the   sum  of  ___________________________   Dollars
($________________) under the B Loan, provided  for  in  the  IFC
Investment  Agreement dated as of the Closing  Date  between  the
Company and International Finance Corporation.

                              Yours truly,

                              BHOTE KOSHI POWER
                              COMPANY PRIVATE LIMITED


                              By:_____________________________
                                 Authorized Representative**


                        SCHEDULE 4.1(b)

                  FORM OF SUBSCRIPTION REQUEST



                  [LETTERHEAD OF THE COMPANY]
                                                       [ Date ]*

International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433
United States of America

Gentlemen:

                       Investment No.7365
                 Subscription Request No. [**]


      1.   Please refer to the IFC Investment Agreement dated  as
of  the  Closing  Date (the "IFC Investment Agreement"),  between
Bhote  Koshi  Power Company Private Limited (the  "Company")  and
International  Finance Corporation ("IFC").  All terms  used  but
not  defined  herein  are used as defined in the  IFC  Investment
Agreement.

       2.     The   Company  hereby  irrevocably   requests   the
subscription  and  disbursement, on or before ________________  ,
199 ___  (or as soon as practicable thereafter), of the amount of
US$  _____________  ,  in  respect of the  IFC  Subscription,  in
accordance with the provisions of Section 4.1 of the IFC  Special
Conditions.  You are requested to pay such amount to  the  credit
of   the  Offshore  Retention  Account  in  accordance  with  the
provisions of the Trust and Retention Agreement.***

      3.   Against disbursement by IFC in accordance with Section
4.1  of  the IFC Special Conditions, the Company will deliver  to
you  a share certificate representing the Shares purchased by IFC
at par with such subscription monies.

      4.    For  the  purposes of Article 6 of  the  IFC  Special
Conditions  and Article 3 of the General Conditions, the  Company
hereby certifies as follows:

          (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 IFC Investment  Agreement,
          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 IFC Investment Agreement;

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

          (e)  the proceeds of the requested disbursement will be
          used  to  subscribe and purchase shares in  the  issued
          share  capital  of  the Company, and such  amounts  are
          promptly  needed  by the Company for  purposes  of  the
          Project;

          (f)   after giving effect to the subscription requested
          herein, (i) IFC will not have subscribed or paid for  a
          higher proportion of the IFC Shares than the proportion
          which  each  other  shareholder  of  the  Company   has
          subscribed or paid for of the total number of Shares to
          be  subscribed  by such shareholder in accordance  with
          the   Financial  Plan,  and  (ii)  IFC  will  not  have
          subscribed  or  paid  a higher proportion  of  the  IFC
          Subscription  to the outstanding amount under  the  IFC
          Loans  than  the proportion which the IFC  Subscription
          bears  to  the IFC Loans as set forth in the  Financial
          Plan;

          (g)   as  of the date of this request, (1) the  Sponsor
          Shareholders  have subscribed and paid  _____  ordinary
          shares of the Company at a purchase price of __________
          Dollars  ($  __________ ) per  share  at  the  time  of
          subscription  of each ordinary share and (2)  once  the
          subscription  requested  hereby  has  been  paid,   the
          subscribed and paid share capital of the Company  shall
          be ______ ordinary shares;

          (h)   the  proceeds of the requested disbursement  will
          not  be  in reimbursement of, or used for, expenditures
          in the territories of any country which is not a member
          of IFC (other than any country which is a member of the
          International Bank for Reconstruction and  Development)
          or for goods produced in or services supplied from such
          territories; and

          (i)   since  the date of the IFC Investment  Agreement,
          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).

     5.   Attached hereto is a copy of the certification referred
to in Section 3.1(x) of the General Conditions.

      The  above certifications are effective as of the  date  of
this Subscription Request 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 IFC and will repay the amount disbursed upon demand by IFC
if disbursement is made prior to the receipt of such notice.

                                        Yours truly,

                            BHOTE KOSHI POWER COMPANY PRIVATE LIMITED



                            By:

                                Authorized Representative****

Copy to:  Manager, Accounting Division
          International Finance Corporation


                            ANNEX A

        METHODOLOGY FOR TRANCHE RATE PRICING CALCULATION

      The  Base  Fixed Rate (i.e. the rate to which  the  A  Loan
Spread  is  applied)  illustrated on the  following  table  is  a
weighted  average calculation that uses two variables  to  weight
the  Applicable  Swap  Rates quoted by the  swap  market.   These
variables  are:  (i) the amortization amount and (ii) the  period
for  which  the  amortization amount  will  be  outstanding.   In
essence,  each Tranche is treated as a series of bullet  tranches
in  amounts  equal  to  the amounts of the relevant  Disbursement
which  are  allocated  for repayment on the respective  repayment
dates  and outstanding for lengths of time corresponding  to  the
relevant repayment dates.  The terms used in the illustration are
defined below.

Definitions:

1.   Applicable   Swap  Rates:   The  fixed-rate   bullet   swap-
     equivalents  of  LIBOR (i.e. the fixed rate payable  in  the
     swap  market in exchange for receipt of LIBOR) obtained from
     a market source as specified by IFC.  The rates will provide
     the  basis for calculation of the Base Fixed Rate  for  each
     Loan Disbursement.  The example on the next page illustrates
     swap  rates quoted in the market on February 9th 1996.   IFC
     obtains  these  rates from Dow Jones, Reuters  or  Bloomberg
     market  data sources.  Upon request (up to once  per  month)
     borrowers will be informed of the service and the page  from
     which relevant pricing quotes have been obtained.

2.   Tenor:  The period in years until a specific repayment  date
     occurs,  calculated from the drawdown date of  the  relevant
     Disbursement.

3.   Tenor  Amount:   The product of the amount  allocated  to  a
     repayment date and the Tenor of that amount.

4.   Amortization Weight:  The percentage which a specific  Tenor
     Amount represents of the sum of all Tenor Amounts.

5.   Weighted  Average Swap Rate:  The product of the  Applicable
     Swap  Rate  for  an  allocated amount and  the  Amortization
     Weight applicable to that amount.

6.   Base Fixed Rate:  The total of all the Weighted Average Swap
     Rates  converted to the rate basis used for  the  Loan,  and
     rounded up to two decimal points.

7.   Tranche:   The  sum of the Base Fixed Rate and  the  A  Loan
     Spread.


                     Applicable Swap Rates

      Quote Date:   9 Feb 1996       Effective Date:  13  Feb 1996
      Quote Basis:  Semi  Annual,  30/360   (by  market convention)

       Maturity                      Offered Rate

       2 years                       5.010%
       3 years                       5.190%
       4 years                       5.370%
       5 years                       5.540%
Interpolated 6 years                 5.655%
       7 years                       5.770%
Interpolated 8 years                 5.867%
Interpolated 9 years                 5.963%
       10 years                      6.060%

          Base Fixed Rate for a Tranche of $15,000,000
         with 3 Years Grace and 10 Years Final Maturity
              Disbursement Date:  13 February 1996

<TABLE>
<CAPTION>
                                                                             6 = 5 as %
  Column #       1         2            3              4         5 = 1x3    of (total 5)    7 = 4 x6

                                                 Interpolated                               Weighted
               Tenor  Outstanding  Amortization      Offer        Tenor     Amortization     Average
     Date     (Years)  Principal     Schedule     Swap Rates     Amounts      Weights       Swap Rate
  <C>            <C>  <C>           <C>             <C>         <C>            <C>          <C>

  13 Feb 1996      0  15,000,000              0
  13 Aug 1996    0.5  15,000,000              0
  13 Feb 1997      1  15,000,000              0
  13 Aug 1997    1.5  15,000,000              0
  13 Feb 1998      2  15,000,000              0
  13 Aug 1998    2.5  15,000,000              0
  13 Feb 1999      3  14,000,000      1,000,000     5.190%       3,000,000      3.0769%      0.1597%
  13 Aug 1999    3.5  13,000,000      1,000,000     5.280%       3,500,000      3.5897%      0.1895%
  13 Feb 2000      4  12,000,000      1,000,000     5.370%       4,000,000      4.1026%      0.2203%
  13 Aug 2000    4.5  11,000,000      1,000,000     5.455%       4,500,000      4.6154%      0.2518%
  13 Feb 2001      5  10,000,000      1,000,000     5.540%       5,000,000      5.1282%      0.2841%
  13 Aug 2001    5.5   9,000,000      1,000,000     5.598%       5,500,000      5.6410%      0.3158%
  13 Feb 2002      6   8,000,000      1,000,000     5.655%       6,000,000      6.1538%      0.3480%
  13 Aug 2002    6.5   7,000,000      1,000,000     5.713%       6,500,000      6.6667%      0.3808%
  13 Feb 2003      7   6,000,000      1,000,000     5.770%       7,000,000      7.1795%      0.4143%
  13 Aug 2003    7.5   5,000,000      1,000,000     5.818%       7,500,000      7.6923%      0.4476%
  13 Feb 2004      8   4,000,000      1,000,000     5.867%       8,000,000      8.2051%      0.4814%
  13 Aug 2004    8.5   3,000,000      1,000,000     5.915%       8,500,000      8.7179%      0.5157%
  13 Feb 2005      9   2,000,000      1,000,000     5.963%       9,000,000      9.2308%      0.5505%
  13 Aug 2005    9.5   1,000,000      1,000,000     6.012%       9,500,000      9.7436%      0.5858%
  13 Feb 2006     10           0      1,000,000     6.060%      10,000,000     10.2564%      0.6215%

    TOTALS                          $15,000,000                 97,500,000    100.0000%      5.7666%
</TABLE>

The Base Fixed Rate for the tranche 5.69% on a 30/360 semi-annual
                             basis.
_______________________________
     1    As named in the Company's Certificate of Incumbency and
Authority (see Schedule 3.1(i) to the General Conditions).

     2  For purposes of this Schedule 2.2(a), an exchange rate of
DM1.7872 = $1US has been assumed.

       *    Each to be numbered in series.

      **    Disbursements of the IFC Loans must be  made  in  the
ratios  and in accordance with the other requirements set out  in
the IFC Investment Agreement and the Subscription Agreements.

     ***    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).

       *   To be dated ten (10) Business Days before the date of any
proposed subscription and disbursement of IFC Subscription.

      **   Each to be numbered in series.  To correspond with number of
the Disbursement Request.  See Schedule 3.2(a)(i).

     ***   Any exchange control consents, if required, must be provided
by the Company to IFC prior to disbursement.

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