EXHIBIT NO. 10.155



                     INVESTMENT NUMBER 7365



               Risk Management Facility Agreement


                             between


            BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                               and


                INTERNATIONAL FINANCE CORPORATION



                   Dated as of the Closing Date




                      TABLE OF CONTENTS

     ARTICLE 1

                          Definitions

          Section 1.2. Interpretation                           5
          Section 1.3. Business Day Adjustment                  6

     ARTICLE 2
     Risk Management Facility

          Section 2.1. Risk Management Facility                 6
          Section 2.2. Purposes and Criteria                    6
          Section 2.3. Master Agreement                         6
          Section 2.4. Front-End Fee; Commitment Fee;  Fees
                       for Eligible Transactions                7
          Section 2.5. Calculation of Fees                      7
          Section 2.6. Security                                 7

     ARTICLE 3
     Payments

          Section 3.1. Form of Payment                          8
          Section 3.2. No Deduction for Taxes                   8
          Section 3.3. Survival of Provisions                   8
          Section 3.4. Additional Costs, Expenses or Losses     8
          Section 3.5. Default Interest                         9

     ARTICLE 4
     Representations and Warranties

          Section 4.1. Representations and Warranties           9
          Section 4.2. Repetition of Representations           10
          Section 4.3. IFC Reliance                            10
          Section 4.4. Rights and Remedies Not Limited         10

     ARTICLE 5
     Conditions of Effectiveness

          Section 5.1. Initial Conditions                      11
          Section 5.2. Conditions to all Eligible Transactions 12
          Section 5.3. Certificate of BKPC                     13
          Section 5.4. No Implied Waiver                       13

     ARTICLE 6
     Particular Covenants

          Section 6.1. Affirmative Covenants                   14
          Section 6.2. Negative Covenant                       15
          Section 6.3. Taxes on Documents                      15

     ARTICLE 7
     Events of Default

          Section 7.1. Consequences of Events of Default       15
          Section 7.2. Events of Default                       16
          Section 7.3. Notice of Event                         17
          Section 7.4. Saving of Rights                        17

     ARTICLE 8
     MISCELLANEOUS

          Section 8.1. Communications                          17
          Section 8.2. Termination of Agreement                18
          Section 8.3. English Language                        18
          Section 8.4. Expenses                                19
          Section 8.5. Governing Law, Choice of Forum.         19
          Section 8.6. General Indemnity                       20
          Section 8.7. Prohibition and Enforceability          20
          Section 8.8. Successors and Assigns                  20
          Section 8.9. Amendments                              21
          Section 8.10. Remedies and Waivers                   21
          Section 8.11. No Other Agreements                    21
          Section 8.12. Counterparts                           21

SCHEDULE 1
Form of Certificate of Bhote Koshi Power Company Private Limited




               RISK MANAGEMENT FACILITY AGREEMENT

      AGREEMENT dated as of the Closing Date, between BHOTE KOSHI
POWER   COMPANY  PRIVATE  LIMITED  ("BKPC")  a  private   limited
liability company organized and existing under the laws  of   the
Kingdom  of Nepal ("Nepal") and INTERNATIONAL FINANCE CORPORATION
("IFC").

     WHEREAS:

      (A)   Pursuant  to  the terms of that certain  IFC  Special
Conditions dated as of the date hereof between BKPC and  IFC  and
that certain Investment Agreement General Conditions dated as  of
the date hereof among BKPC, IFC and DEG-Deutsche Investitions-und
Entwicklungsgesellschaft  mbH  (the  "General  Conditions,"   and
together  with  the IFC Special Conditions, the  "IFC  Investment
Agreement"), IFC has agreed, inter alia, to make a loan  to  BKPC
in  the aggregate principal amount of fifty-seven million Dollars
($57,000,000),  comprised of an A Loan for IFC's own  account  in
the principal amount of twenty-one million Dollars ($21,000,000),
and  a  B  Loan for the account of Participants in the  principal
amount  of  thirty-six  million  Dollars  ($36,000,000)  for  the
purpose  and  on the terms and conditions set forth  in  the  IFC
Investment Agreement;

      (B)   BKPC has requested IFC to establish a risk management
facility  in  favor  of BKPC to enable BKPC  to  engage  in  risk
management  transactions with a final maturity of up  to  fifteen
(15) years from the date hereof; and

      (C)   IFC  has  agreed to make available  to  BKPC  various
financial risk management instruments for the purpose of enabling
BKPC  to manage its interest rate exposure, all on the terms  and
conditions as set forth in this Agreement.

     NOW, THEREFORE, the parties hereby agree as follows:


                           ARTICLE 1

                          Definitions

      Section  1.1  General Definitions. Wherever  used  in  this
Agreement  and the Schedules hereto, unless the context otherwise
requires, the following terms have the following meanings:

      "Aggregate  Mark-to-Market Value" means,  at  the  time  of
determination, the aggregate of the Mark-to-Market Value  of  all
Eligible Transactions entered into under the Master Agreement  at
such time outstanding;

       "Aggregate   Risk  Exposure"  means,  at   the   time   of
determination,  the  aggregate of IFC's Risk  Exposures  for  all
Eligible Transactions entered into under the Master Agreement  at
such time outstanding;

      "Applicable  Rate"  means, with  respect  to  any  date  of
determination, a rate of interest determined by IFC equal to  the
aggregate of:

            (i)  five percent (5%) per annum; plus

           (ii)  the  average, rounded up, if necessary,  to  the
nearest  one-sixteenth  (1/16th) of one percent,  of  the  London
Interbank  Offered  Rates (commonly known as "LIBOR")  quoted  by
major banks for six-month Dollar deposits on the Dow Jones Market
Screen  Page  as  of  11:00 a.m., London time  on  such  date  of
determination,  or if such rate cannot be so determined  or  only
one  such  bank is quoted on such date, the average of the  rates
for  such  deposits quoted on such date by three (3)  such  major
banks active in the Eurodollar interbank market in London;

     "Auditors" means a firm of independent public accountants as
BKPC  may, with the consent of IFC (consent shall be deemed given
by IFC if IFC does not object to a proposed auditor within thirty
(30) days of IFC's receipt of the request for consent accompanied
by  adequate supporting documentation), from time to time appoint
as  auditors of BKPC.  The Auditors shall be capable of  auditing
to U.S. GAAP standards.

       "Authority"   means   any  government   or   governmental,
administrative,   fiscal,  judicial  or  government-owned   body,
department, commission, authority, tribunal, agency or entity;

      "Authorization"  means any consent,  registration,  filing,
agreement, notarization, certificate, license, approval,  permit,
authority  or  exemption from, by or with any Authority,  whether
given  by express action or deemed given by failure to act within
any  specified  time  period  and all corporate,  creditors'  and
shareholders' approvals or consents;

     "Authorized Officer" means the officers of BKPC specified in
its  Board  Resolution  delivered to IFC, and,  for  purposes  of
certificates  or  other documents relating to financial  matters,
the financial controller;

      "Business  Day"  means a day on which banks  are  open  for
business in the City of New York, New York, the United States  of
America, or any other place that may be specified by IFC for  any
particular  Eligible  Transaction  and,  for  purposes   of   the
definition  of "Applicable Rate", a day on which banks  are  open
for  business  in  the  Eurodollar interbank  market  in  London,
England;

      "Closing Date" means December 12, 1997;

      "Commitment  Period" means the period commencing  with  the
date of this Agreement and ending on the earlier of

           (i)   the  third  anniversary  of  the  date  of  this
Agreement (or such later date as IFC may designate); or

           (ii)  the termination date referred to in Section  7.1
(Consequences of Events of Default);

     "Confirmation" means, in respect of any Eligible Transaction
entered into under the Master Agreement, the confirmation  issued
pursuant to the Master Agreement;

     "Dollars" and the sign "$" means the lawful currency of the
United States of America;

     "Dow Jones Market Screen Page" means the display of interest
settlement rates (commonly known as LIBOR) for Dollar deposits in
London  designated as page 3750 on the service formerly known  as
the  Dow  Jones Telerate Service (or any other page that replaces
3750  and  displays London interbank settlement rates for  Dollar
deposits);

      "Eligible Currency" means, as long as in IFC's judgment the
relevant risk management instrument is readily available  to  IFC
in  the  major  financial markets in each  of  these  currencies,
Dollars,  Deutsche  Mark, Japanese Yen,  British  Pounds,  French
Francs,   Swiss  Francs  and  Dutch  Guilders,  and  such   other
currencies as IFC may agree from time to time;

     "Eligible Transaction" means

           (i)  any transaction which is a rate swap transaction,
a  basis swap transaction, a collar transaction, a currency  swap
transaction, a cross-currency rate swap transaction, or any other
similar transaction (including any option with respect to any  of
these  transactions), all in and between Eligible  Currencies  as
contemplated  by  the  1991  ISDA Definitions  published  by  the
International  Swaps and Derivatives Association, Inc.  ("ISDA"),
as modified or amended from time to time by ISDA;

          (ii) any combination of these transactions; and

           (iii)      any other hedging transactions as  IFC  and
BKPC may from time to time agree;

     "Event of Default" means any event specified in Section 7.2;

     "Face Value" means

           (i)   for  any Eligible Transaction which  is  not  an
option of another Eligible Transaction, the amount stated in  the
Confirmation  of the Eligible Transaction as being the  "Notional
Amount"  or  the  "Initial  Exchange Amount"  for  that  Eligible
Transaction; and

           (ii)  for any Eligible Transaction which is an option,
the  "Notional Amount" or the "Exchange Amount" of  the  Eligible
Transaction to which that option relates;

      "Fiscal  Year" means the accounting year of BKPC commencing
each year on July 16 and ending on the following July 15, or such
other  period  (of at least 52 consecutive weeks)  as  BKPC  with
IFC's  consent,  from time to time designates as  its  accounting
year;

      "Mark-to-Market Value" means, at the time of  determination
and  with respect to any Eligible Transaction entered into  under
the Master Agreement, the amount expressed in Dollars, determined
by IFC in good faith and in accordance with market practice, that
an  independent third party would require to be  paid  to  it  to
assume  the  rights and obligations of BKPC under  such  Eligible
Transaction effective as of such time of determination or, if IFC
determines that an independent third party would not require  any
payment to it to assume BKPC's rights and obligations under  such
Eligible  Transaction, the Mark-to-Market  Value  shall  be  zero
($0);

     "Master Agreement" means the Master Agreement (Multicurrency-
Crossborder)  between BKPC and IFC dated as of the  Closing  Date
including  the  Schedule attached thereto and  the  Confirmations
issued  thereunder from time to time, a form of which is attached
as  Exhibit  A  hereto;  and as such Agreement  may  be  amended,
supplemented or modified from time to time;

      "Operating Guidelines" means a document, prepared  by  BKPC
and  approved by IFC, setting out guidelines for the performance,
by  BKPC,  of its obligations under this Agreement and  otherwise
implementing this Agreement;

      "Price"  means,  with respect to any Eligible  Transactions
executed under the Master Agreement, the payment schedule  quoted
by  IFC  to  BKPC  on  an  "all-in" basis and  specified  in  the
Confirmation related to such Eligible Transaction, which  payment
schedule  will  reflect IFC's cost of entering  into  a  matching
transaction  with a market counterparty and will  compensate  IFC
for  its  risk  margin, determined by IFC in its sole  discretion
with respect to such Eligible Transaction;

     "Risk Exposure" means, at the time of determination and with
respect to any Eligible Transaction entered into under the Master
Agreement, an amount, expressed in Dollars, equal to a percentage
of the Face Value of that Eligible Transaction which reflects the
risk to IFC of such Eligible Transaction, as determined by IFC in
its  sole  discretion and advised to BKPC on or before the  trade
date  of such Eligible Transaction, such determination being made
using the same methodology as is used from time to time by IFC to
determine  the  risk of transactions in its portfolio  which  are
similar to the relevant Eligible Transaction;

     "Risk Management Facility" means the facility made available
to BKPC under Article 2;

      Section 1.2. Interpretation. In this Agreement, unless  the
context otherwise requires:

      (a)  headings and underlinings are for convenience only and
do not affect the interpretation of this agreement;

      (b)   words  importing the singular include the plural  and
vice versa;

      (c)  words importing a gender include any gender;

      (d)  an expression importing a natural person includes  any
company, partnership, joint venture, association, corporation  or
other body corporate and any government agency;

      (e)   a  reference  to an Article, Section,  party,  Annex,
Exhibit  or  Schedule  (other than the  Schedule  to  the  Master
Agreement)  is a reference to an Article and Section  of,  and  a
party, Annex, Exhibit and Schedule of, this Agreement;

      (f)   a reference to any statute, regulation, proclamation,
ordinance   or   by-law   includes  all  statutes,   regulations,
proclamations,  ordinances or by-laws varying,  consolidating  or
replacing  them,  and  a  reference to  a  statute  includes  all
regulations,  proclamations, ordinances and by-laws issued  under
that statute;

      (g)  a reference to a document includes an amendment or sup
plement  to,  or replacement or novation of, that document  other
than  any amendment, supplement, replacement or novation made  in
breach of this agreement;

      (h)   a reference to a party to any document includes  that
party's successors and permitted assigns by this agreement;

      (i)   the  words "include" or "including" do not  imply  an
exhaustive  listing  of  all things to which  the  relevant  word
relates;

      (j)   a  reference to an agreement includes an undertaking,
deed,  agreement  or  legally enforceable  arrangement  or  under
standing whether or not in writing;

      (k)   a  reference to a document includes any agreement  in
writing,  or  any  certificate,  notice,  instrument,  or   other
document of any kind; and

      (l)  no rule of construction applies to the disadvantage of
a party because that party was responsible for the preparation of
this agreement or any part of it.

     Section 1.3. Business Day Adjustment.

      (a) Subject to subsection (b) below, where the day on or by
which an act or obligation is to be performed or a payment is due
to  be  made  under  this Agreement is not a Business  Day,  such
performance  or payment must be done or made on or  by  the  next
succeeding  Business Day; and in the case of interest,  fees  and
charges, those amounts continue to accrue for the period from and
including that due date to that next succeeding Business Day.

      (b)   Notwithstanding subsection (a), (i) if the effect  of
applying subsection (a) would be for the relevant performance  to
be done or payment due as the case may be in a different calendar
month,  that performance or payment must be made on the  Business
Day  preceding  the  due date; and (ii) if there  is  a  conflict
between  any  Business  Day Adjustment in  accordance  with  this
Section  1.3  and  a business day adjustment provided  under  the
Master  Agreement, then the provision under the Master  Agreement
shall govern.


                           ARTICLE 2

                    Risk Management Facility

      Section 2.1. Risk Management Facility. Subject to the terms
and conditions of this Agreement, IFC hereby establishes the Risk
Management  Facility  under which it  will  enter  into  Eligible
Transactions with BKPC as agreed by IFC.

      Section  2.2.  Purposes and Criteria. The  Risk  Management
Facility may be used only by BKPC and only for the purpose of its
financial risk management and genuine hedging operations of BKPC,
and  not for any speculative purpose (as determined by IFC in its
sole discretion). Each Eligible Transaction will be reviewed  and
approved  by  IFC  in  accordance with  the  provisions  of  this
Agreement.

      Section  2.3.  Master Agreement. All Eligible  Transactions
with IFC shall be executed pursuant to the Master Agreement.

      Section  2.4.  Front-End  Fee;  Commitment  Fee;  Fees  for
Eligible  Transactions.  BKPC shall pay  the  following  fees  in
respect  of  the  Risk  Management  Facility  and  each  Eligible
Transaction with IFC:

      (a)   Front-End Fee.  Upon execution and delivery  of  this
Agreement, BKPC shall pay to IFC a front-end fee in the amount of
twenty-five thousand Dollars (US$25,000).

      (b)   Commitment  Fee. During the Commitment  Period,  BKPC
shall  pay IFC in arrears an annual commitment fee equal  to  one
quarter  of  one  per cent (0.25%) of the unused portion  of  the
Facility,   i.e.,  an  amount  representing  the  average   daily
difference  between  three million Dollars ($3,000,000)  and  the
Aggregate Risk Exposure outstanding during the covered period, as
determined  by IFC and advised to BKPC from time  to  time.   The
Commitment Fee shall begin to accrue upon execution and  delivery
of  this  Agreement and shall be payable in Dollars  annually  on
each anniversary of such date.  The Commitment Fee for any period
less  than a year shall accrue and be prorated on the basis of  a
360-day year for the actual number of days elapsed.

     (c)  Transaction Fees. With respect to each Eligible Transac
tion, BKPC shall pay the Price advised to BKPC not later than the
trade  date of such Eligible Transaction, payable in such amounts
and  currency and on such payment dates as are specified  in  the
Confirmation issued in respect of such Eligible Transaction under
the Master Agreement.

      Section 2.5. Calculation of Fees. Any and all fees  payable
hereunder  (other  than  payments  in  connection  with  Eligible
Transactions  specified in the related Confirmation issued  under
the  Master Agreement) shall accrue from day to day and,  in  the
case of annual fees for a period of less than a full year, be pro-
rated  on  the basis of a 360-day year for the actual  number  of
days elapsed and, unless otherwise specified in this Agreement or
agreed  by the parties in writing, shall be payable on the  dates
specified herein or in the Confirmation for the relevant Eligible
Transaction.

      Section 2.6. Security.  BKPC acknowledges and agrees  that,
to  secure  the prompt and complete payment and performance  when
due  of  BKPC's  obligations (now existing or hereafter  arising)
hereunder, BKPC has granted to IFC a security interest  and  lien
in  and  to  all  of  the same property and  assets  of  BKPC  as
contemplated  by  the  IFC Investment Agreement,  which  security
interest  and  lien  has been granted pursuant  to  the  Security
Documents,  as  such  term  is  defined  in  the  IFC  Investment
Agreement,  and IFC shall be entitled to exercise all rights  and
remedies  against  such  Security  as  contemplated  by  the  IFC
Investment Agreement and the Security Documents.


                           ARTICLE 3

                            Payments

     Section 3.1. Form of Payment.

      (a)   BKPC  shall  pay all amounts due to  IFC  under  this
Agreement  in  the  specified currency in  immediately  available
funds  at such bank in such place as IFC shall designate.  If  no
currency is specified and IFC does not advise otherwise then  all
such  payments shall be made in Dollars, in immediately available
funds, at IFC's account at the Citibank N.A., New York, 111  Wall
Street,  New  York, New York 10043 (Account Number 3608-5579  for
the account of International Finance Corporation).

      (b)  The obligation of BKPC to pay any amount payable under
this  Agreement  or the Master Agreement in a specified  currency
shall  not  be novated, discharged or satisfied by tender  or  by
payment  (whether  or not by recovery under a  judgment)  in  any
other  currency,  except  to the extent  to  which  such  tender,
payment or recovery shall result in the effective payment of  the
total  amount due in the specified currency to IFC's  account  in
the  designated  place of payment.  Accordingly, the  amount  (if
any)  by  which  that tender, payment or recovery in  a  currency
other than the specified currency or Dollars, as the case may be,
falls short of the total amount due to IFC, is and remains due to
IFC  as a separate obligation (regardless of any judgment for any
other  amounts due under or in respect of this Agreement  or  the
Master Agreement).

      Section  3.2. No Deduction for Taxes.  BKPC shall  pay  all
amounts  due under this Agreement or the Master Agreement without
set-off  and without deducting any taxes, duties, fees  or  other
charges  of  whatever  nature. If BKPC is  prevented  by  law  or
otherwise  from  so  paying  without deduction,  then  BKPC  must
instead  pay  IFC  an  increased  amount  so  that,  after   such
deduction,  IFC receives the full amount it would  have  received
had the payments been made without the deduction.

      Section  3.3.  Survival of Provisions.  BKPC's  obligations
under  (i)  this Article 3 and under Sections 8.4 (Expenses)  and
8.6  (General  Indemnity)  and (ii) the  Master  Agreement  shall
survive the termination of this Agreement.

      Section 3.4. Additional Costs, Expenses or Losses. If, as a
result  of  any  failure by BKPC to pay any sums due  under  this
Agreement  or  the Master Agreement on the due date therefor  IFC
shall incur costs, expenses or losses, BKPC shall promptly pay to
IFC,  in Dollars, upon IFC's request, the amount which IFC  shall
notify to BKPC as being the aggregate of such costs, expenses and
losses.  For  the  purposes  of the preceding  sentence,  "costs,
expenses  or  losses"  shall  include,  without  limitation,  any
interest paid or payable to carry any unpaid amount and any loss,
premium,  penalty or expense which may be incurred in liquidating
or  employing  deposits of or borrowings from  third  parties  in
order  to  make, maintain or fund IFC's obligation  to  a  market
counterparty in a matched transaction or any portion thereof (but
in  the  case  of  a  late  payment under this  Agreement,  after
deducting  any late payment interest received by IFC  in  respect
thereof, pursuant to Section 3.5).

     Section 3.5. Default Interest. Without prejudice to the reme
dies available to IFC under this Agreement, the Master Agreement,
the  IFC  Investment  Agreement and  the  Security  Documents  or
otherwise, if BKPC fails to make any payment on or before its due
date as specified in this Agreement (or, if not so specified,  as
notified by IFC to BKPC), BKPC shall pay, in Dollars, upon demand
in respect of the amount of such payment due and unpaid, interest
at  the Applicable Rate for such due date or, if such due date is
not  a  Business Day, for the Business Day immediately  preceding
such due date, from the date any such amount became due until the
date of actual payment (as well after as before judgment).


                           ARTICLE 4

                 Representations and Warranties

     Section 4.1. Representations and Warranties. BKPC represents
and warrants as of the date of this Agreement as follows:

     (a)  it is a private limited liability Company duly
organized and validly existing under the laws of Nepal and has
the power to own its properties, to conduct its business as
presently conducted, to enter into this Agreement, the Master
Agreement and any Confirmation thereunder and to perform its
obligations hereunder and thereunder;

     (b)  each of this Agreement, the Master Agreement and any
Confirmation under such Master Agreement has been and, in the
case of each Confirmation will be, duly authorized, and when
executed and delivered by the parties thereto each such Agreement
and Confirmation will constitute the legal, valid and binding
obligations of BKPC, enforceable against BKPC in accordance with
its terms;

     (c)  neither the making of this Agreement, the Master
Agreement or any Confirmation, nor (when all the consents
referred to in Section 5.1(a) have been obtained) the compliance
with the terms hereof or thereof, nor the performance by BKPC of
its obligations hereunder or thereunder, will conflict with or
result in a breach of any of the terms, conditions or provisions
of, or constitute a default under, any indenture, mortgage,
decree, court or administrative order, agreement or other
instrument or arrangement to which BKPC is a party or by which it
is bound, or require any consent or waiver which has not been
obtained from any Authority or regulatory body having
jurisdiction over BKPC or any of its businesses and activities,
or violate any of the terms or provisions of BKPC's
organizational documents or any judgment, decree or order or any
statute, rule or regulation applicable to BKPC;

     (d)  that it is and will be acting as principal, and not as
agent for another party, and will be solely responsible for the
decision to enter into the transactions under the Risk Management
Facility; and

     (e)  that it is fully aware of the risks involved in the
transactions to be entered into under the Risk Management
Facility and it accepts full and sole responsibility for all the
consequences of such transactions.

     Section 4.2. Repetition of Representations. The representa
tions and warranties in this Agreement, the Master Agreement and
the IFC Investment Agreement are deemed repeated on the trade
date and the effective date specified in each Confirmation
providing for an Eligible Transaction, except to the extent
amended, supplemented or modified by BKPC in its certificate to
be delivered in accordance with Section 5.3 of this Agreement.

     Section 4.3. IFC Reliance.

     (a)  BKPC acknowledges that it has made the representations
and warranties in or referred to in Section 4.1 (Representations
and Warranties) with the intention of persuading IFC to enter
into this Agreement, the Master Agreement and each Eligible
Transaction, as the case may be, and that IFC is entering into
such Agreements and will enter into such Eligible Transactions on
the basis of, and in full reliance on, each of those
representations and warranties.

     (b)  BKPC warrants to IFC that each of the representations
and warranties in this Article 4 is true and correct in all
respects as of the date of this Agreement and when repeated
pursuant to Section 4.2, and that none of them omits or will omit
any matter the omission of which makes or will make any of the
representations false or misleading in any material respect.

     Section 4.4. Rights and Remedies Not Limited. The rights and
remedies of IFC in relation to any misrepresentation or breach of
warranty on the part of BKPC is not limited by any investigation
by or on behalf of IFC into the affairs of BKPC, by the execution
or the performance of this Agreement, the Master Agreement, or
any Eligible Transaction or by any other act or thing which may
be done by or on behalf of IFC in connection with such Agreements
or such Eligible Transactions and which might, apart from this
Article, limit such rights or remedies.


                           ARTICLE 5

                  Conditions of Effectiveness

     Section 5.1. Initial Conditions. Subject to Sections 5.2 and
5.3, the obligation of IFC to enter into the initial Eligible
Transaction under the Master Agreement for the benefit of BKPC
shall be subject to the performance by BKPC of all its
obligations to be performed under this Agreement prior to that
date and to the fulfillment, in a manner satisfactory to IFC, of
the following further conditions:

     (a)  BKPC has obtained, or has made arrangements satisfactory
to IFC for obtaining, all governmental, corporate, creditors' and
other necessary licenses, approvals, waivers or consents for:

          (i)  the carrying on of the business of BKPC as it is
presently carried on and is contemplated to be carried on;

          (ii) the due authorization, execution and delivery of,
and performance under, this Agreement, the Master Agreement and
any Confirmation evidencing an Eligible Transaction under it; and

          (iii)     the repatriation by IFC, and the remittance
to IFC or its assigns, of all monies payable in respect of this
Agreement and any Eligible Transaction executed under the Master
Agreement in the currency in which the relevant payment is
expressed to be payable;

     (b)  IFC has received a legal opinion or opinions, in form
and substance satisfactory to it, of counsel in Nepal and the
United States acceptable to IFC, and concurred in by counsel for
BKPC, with respect to:

          (i)  the organization, existence and operations of BKPC
and its authorized and subscribed share capital;

          (ii) the matters referred to in subsection (a) above;

          (iii)     the authorization, execution, delivery,
legality, validity and enforceability of this Agreement the
Master Agreement, any Confirmation under the Master Agreement and
any other documents in implementation thereof;

          (iv) the compliance with all obligations referred to in
Sections 3.2 (No Deduction for Taxes) and 6.3 (Taxes on
Documents);

          (v)  the priorities or privileges, if any, that
creditors of BKPC, other than IFC, may have by reason of law; and

          (vi) such other matters incident to the transactions
contemplated by this Agreement, the Master Agreement or, any
Confirmation under the Master Agreement as IFC reasonably
requests;

     (c)  the evidence of signature authority and specimen sig
natures referred to in Schedule 3.1(i) of the IFC Investment
Agreement has been supplied to IFC;

     (d)  organizational arrangements satisfactory to IFC have
been made for the administration of the Risk Management Facility;

     (e)  receipt of evidence that BKPC has appointed agents for
the service of process pursuant to Section 8.5 and under the
Master Agreement; and

     (f)  the Conditions Precedent to Initial Disbursement
specified in Section 3.1 of the General Conditions have been
satisfied or waived.

     Section 5.2. Conditions to all Eligible Transactions. The
obligation of IFC to enter into any Eligible Transaction under
the Master Agreement is subject to the conditions that:

     (a)  the Face Value of such Eligible Transaction is not less
than two million Dollars ($2,000,000) or its equivalent, if such
Eligible Transaction does not have an amortizing maturity
schedule, or five million Dollars ($5,000,000) or its equivalent,
if it has an actual or notional amortizing maturity schedule;

     (b)  the maturity of such Eligible Transaction shall not
exceed fifteen (15) years from the effective date of such
Eligible Transaction and shall not be less than six (6) months
from such effective date;

     (c)  after giving effect to such Eligible Transaction the
Aggregate Risk Exposure of IFC at such time does not exceed three
million Dollars ($3,000,000) or its equivalent; and the Aggregate
Mark-to-Market Value of all Eligible Transactions then
outstanding does not exceed three million Dollars ($3,000,000) or
its equivalent;

     (d)  the relevant Eligible Transaction is entered into not
later than the third anniversary of the date of this Agreement;

     (e)  such Eligible Transaction is of the same type as
transactions readily available to IFC in the international swap
or derivatives markets;

     (f)  BKPC has obtained, or has made arrangements satisfac
tory to IFC for obtaining, all governmental, corporate,
creditors' and other necessary licenses, approvals, waivers or
consents for:

          (i)  entering into and performing under that Eligible
Transaction; and

          (ii) remitting to IFC or its assigns all moneys payable
in respect of that Eligible Transaction in the currency in which
those moneys are expressed to be payable;

     (g)  no Event of Default and no event which with notice,
lapse of time or both would become an Event of Default in
accordance with Section 7.2 (Events of Default) has occurred and
is continuing;

     (h)  nothing has occurred which might make it improbable
that BKPC will be able to fulfill or perform any of its obli
gations under this Agreement, the Master Agreement or any
Eligible Transaction, nor shall BKPC have incurred or suffered
any material loss or liability;

     (i)  the representations and warranties confirmed or made in
Article 4, amended, modified or supplemented as necessary or
appropriate in accordance with Section 4.2, are true and correct
on and as of the trade date and the settlement date of the
Eligible Transaction with the same effect as though such
representations and warranties had been made on and as of that
date (but in the case of Section 4.1(c), without the words in
parentheses); and

     (j)  after giving effect to the Eligible Transaction, BKPC
will not be in violation of its organizational documents, its
Board authority for entering into Eligible Transactions or any
document to which BKPC is a party (including this Agreement) or
by which it is bound, nor any law, rule or regulation of the
relevant Nepalese Authorities (including, without limitation,
monetary authorities) or otherwise directly or indirectly
limiting or otherwise restricting BKPC's power or authority or
its ability to enter into hedging or risk management
transactions.

     Section 5.3. Certificate of BKPC. With each request that IFC
enter into a Eligible Transaction, BKPC must deliver to IFC a
certification, in the form of Schedule 1, with respect to the
foregoing conditions, signed by an authorized representative of
BKPC and expressed to be effective as of the trade date and the
effective date of the relevant Eligible Transaction.

     Section 5.4. No Implied Waiver.

     (a)  No course of dealing or waiver by IFC in connection
with any condition in Sections 5.1 (Initial Conditions), 5.2
(Conditions to all Eligible Transaction) or 5.3 (Certificate of
BKPC) shall impair any right, power or remedy of IFC with respect
to any other condition, or shall be construed to be a waiver of
such other condition. The action of IFC in respect of any such
condition shall not affect or impair any right, power or remedy
of IFC in respect of any other condition.

     (b)  Unless otherwise notified to BKPC by IFC and without
prejudice to subsection (a) above, the right of IFC to require
compliance with any condition under this Agreement which is
waived by IFC in respect of any Eligible Transaction is expressly
preserved for the purposes of any other Eligible Transaction.


                           ARTICLE 6

                      Particular Covenants

     Section 6.1. Affirmative Covenants. Unless IFC otherwise
agrees, BKPC shall:

     (a)  utilize the Risk Management Facility and any Eligible
Transaction thereunder, exclusively to manage BKPC's interest
rate and other financial risks permitted under Section 2.2, and
not for any speculative purpose;

     (b)  comply with the particular covenants enumerated in
Section 5.2 of the General Conditions which are hereby
incorporated herein by reference;

     (c)  furnish promptly to IFC such information as IFC may
from time to time reasonably request;

     (d)  obtain and maintain in force (or where appropriate,
promptly renew) all licenses, approvals, waivers or consents
necessary for carrying out its obligations under this Agreement,
the Master Agreement, each Eligible Transaction, and BKPC's
business and operations generally;

     (e)  perform and observe all the conditions and restrictions
contained in, or imposed on BKPC by, any such licenses,
approvals, waivers or consents;

     (f)  as soon as practicable, after becoming available,
furnish to IFC a copy of the minutes of all its shareholders'
meetings in which resolutions are taken involving any action
materially and adversely affecting the ability of BKPC to meet
its obligations under this Agreement, the Master Agreement or in
connection with any Eligible Transaction at such time
outstanding;

     (g)  promptly inform IFC of any proposed changes in the
nature or scope of the business or operations of BKPC, of any
notice, claim or demand from creditors of BKPC pursuant to
applicable provisions of the Nepalese Bankruptcy Code (or similar
or successor provisions under such legislation or a similar or
successor legislation) and decrees or regulations thereunder
received by BKPC (whether or not such notice, claim or demand has
merit), which would result in or could potentially result in the
initiation of a bankruptcy or insolvency proceeding against BKPC
and of any event or condition which might materially and
adversely affect the carrying on of BKPC's business or operations
(including without limitation any action by BKPC's management to
initiate or which could result in the initiation of a bankruptcy
or insolvency proceeding of BKPC).

     Section 6.2. Negative Covenant. Unless IFC otherwise con
sents, which consent will not be unreasonably withheld, BKPC
shall not:

     (a)  change the nature of its present business or operations
in any manner which would be inconsistent with the provisions of
this Agreement or the Master Agreement and would adversely affect
the ability of BKPC to perform its obligations under this
Agreement, the BKPC Master Agreement, or any Eligible Transaction
at any time outstanding; or

     (b)  change its organizational documents in any manner which
would be inconsistent with the provisions of this Agreement or
the Master Agreement.

     Section 6.3.  Taxes on Documents.

     (a)  BKPC must pay all taxes (including stamp taxes),
duties, fees or other charges, if any, payable on or in
connection with the execution, issue, delivery, registration or
notarization of this Agreement, the Master Agreement and any
Eligible Transaction and must, upon notice from IFC, reimburse
IFC or its assigns for any such taxes, duties, fees or other
charges paid by IFC or its assigns.

     (b)  BKPC must pay all present and future taxes, duties,
fees and all other charges of any nature, if any, levied or
imposed by His Majesty's Government of Nepal on or in connection
with the payment of any and all amounts due IFC under this
Agreement or the Master Agreement.


                           ARTICLE 7

                       Events of Default

     Section 7.1. Consequences of Events of Default. Without
limiting IFC's rights under the Master Agreement, if an Event of
Default occurs and is continuing IFC may, (i) by notice to BKPC,
cancel its commitments to enter into Eligible Transactions from
the termination date specified in that notice and from that date
IFC shall have no further obligations under this Agreement; and
(ii) exercise all rights and remedies against the Security
granted herein and pursuant to the Security Documents, as such
rights and remedies are set forth in the IFC Investment Agreement
and the Security Documents.

     Section 7.2. Events of Default. It is an Event of Default if:

     (a)  BKPC fails to pay any amount payable under this
Agreement or the Master Agreement when due and such failure shall
have continued unremedied for three (3) Business Days after
notice;

     (b)  BKPC fails to perform any of its other obligations
under this Agreement or any other agreement between BKPC and IFC
(including the Master Agreement or any Eligible Transaction
thereunder), and any such failure continues for a period of
thirty (30) days after IFC notifies BKPC of that failure;

     (c)  any representation or warranty confirmed or made in
Article 4 or in connection with the execution and delivery of
this Agreement, as amended, modified or supplemented as provided
in Section 4.2, is found to have been incorrect in any material
respect;

     (d)  any Authority condemns, nationalizes, seizes, or
otherwise expropriates all or any substantial part of the
property or other assets of BKPC or of its share capital or
assumes custody or control of such property or other assets or of
the business or operations of BKPC or of its share capital or
takes any action for the dissolution or disestablishment of BKPC
or any action that would prevent BKPC or its officers from
carrying on all or a substantial part of its business or
operations;

     (e)  any Authorization necessary or required in respect of
this Agreement, the Master Agreement or any Eligible Transaction
thereunder is rescinded, terminated, not available, lapses or
otherwise ceases to be of full force and effect, including in
respect of the remittance to IFC or its assigns in Dollars or
other specified currencies of any amounts payable under any such
document;

     (f)  any material Authorization necessary or required to
permit BKPC to own its properties or carry out its principal
business is rescinded, terminated, not available, lapses or
otherwise ceases to be in full force or effect;

     (g)  BKPC changes its organizational documents in any manner
which would be inconsistent with the provisions of this Agreement
or the Master Agreement or would adversely affect the ability of
BKPC to perform its obligations under this Agreement, the Master
Agreement or any Eligible Transaction thereunder;

     (h)  BKPC changes the nature of its present business or
operations in any manner which would be inconsistent with the
provisions of this Agreement or the Master Agreement or would
adversely affect the ability of BKPC to perform its obligations
under this Agreement, the Master Agreement or any Eligible
Transaction thereunder;

     (i)  notwithstanding anything in this Section 7.2 to the
contrary, including without limitation any grace period specified
herein otherwise applicable thereto, there exists and is
continuing any "Event of Default" or "Potential Event of Default"
(as such expressions are defined in the Master Agreement) under
the Master Agreement or any Eligible Transaction; or

     (j)  there exists an Event of Default (as such term is
defined in the IFC Investment Agreement) under the IFC Investment
Agreement or any Security Document.

     Section 7.3. Notice of Event. If any Event of Default or any
event which, with lapse of time or notice or both, would become
an Event of Default happens, BKPC must immediately notify IFC by
telex or facsimile specifying the nature of that Event of Default
or other event and any steps BKPC is taking to remedy the same.

     Section 7.4. Saving of Rights. No course of dealing and no
delay in exercising, or omission to exercise, any right, power or
remedy accruing to IFC upon any default under this Agreement or
the Master Agreement shall impair any such right, power or remedy
or may be construed to be a waiver thereof or an acquiescence
therein. No action or acquiescence of IFC in respect of any such
default shall affect or impair any right, power or remedy of IFC
in respect of any other default.


                           ARTICLE 8

                         Miscellaneous

     Section 8.1. Communications. Any notice, request or other
communication to be given or made under this Agreement to any
party must be in writing. Subject to Section 7.3 (Notice of
Event), the notice, request or other communication may be
delivered by hand, registered mail, facsimile or telex to the
party's address specified below or at any other address that
party notifies to the other party from time to time.

     For BKPC:

          c/o Panda Energy International, Inc.
          4100 Spring Valley Road
          Suite 1001
          Dallas, Texas 75244
          Attention:     General Counsel

     Facsimile:     (972) 980 6815


     For IFC:

          International Finance Corporation
          2121 Pennsylvania Avenue, N.W.
          Washington, D.C. 20433
          United States of America
               Attention:     Director, Treasury Department
          (Client Risk Management Unit)


          Cable:         CORINTFIN
                    Washington, D.C.

          Telex:    248423 - World Bank
                     64145 - World Bank
                    197688 - World Bank
                     82987 - World Bank

          Facsimile:     Treasury:     (202) 974-4376

     Section 8.2. Termination of Agreement. Notwithstanding the
expiration of the Commitment Period and subject to Section 3.3 of
this Agreement, this Agreement shall remain in full force and
effect until all Eligible Transactions have been terminated in
accordance with the Master Agreement.

     Section 8.3. English Language. All documents to be furnished
or communications to be given or made under this Agreement must
be in the English language or, if in another language, must be
accompanied by a translation into English certified by a
representative of BKPC, which will be the governing version
between BKPC and IFC.

     Section 8.4. Expenses. BKPC must pay to IFC, or as IFC
directs:

     (a)  upon demand, all fees and expenses of IFC's local
counsel in Nepal and other professional fees, and all incidental
fees and expenses incurred in connection with:

          (i)  the preparation, execution and delivery of this
Agreement and the Master Agreement;

          (ii) the opinions required by IFC hereunder;

          (iii)     the preparation, execution and, as relevant,
notarization, consularization, translation and registration of
this Agreement, the Master Agreement and any other documents
related to this Agreement; and

          (iv) any amendment or modification to, or waiver under,
this Agreement, the Master Agreement or any such other document.

     (b)  If any amount owing to IFC under this Agreement or the
Master Swap Transaction or in connection with transactions
contemplated hereunder or thereunder shall be collected through
any process of law or shall be placed in the hands of attorneys
for collection, BKPC shall pay reasonable attorneys' and other
fees and expenses incurred in respect of such collection.

     Section 8.5. Governing Law, Choice of Forum.

     (a) This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York,
without regard to the conflicts of laws provisions thereof (other
than Sections 5-1401 and 5-1402 of the New York General
Obligations Law).

     (b)  For the benefit of IFC, BKPC:

          (i)  irrevocably agrees that any legal action or
proceeding arising out of or relating to this Agreement or the
Master Agreement may be brought and enforced in the courts of the
State of New York and hereby irrevocably submits to such
jurisdiction;

          (ii) hereby designates, appoints, and empowers CT
Corporation System, with offices on the date hereof at 1633
Broadway, New York, New York 10019, as its authorized agent to
receive service of process and any other legal summons in the
City of New York for purposes of any such action or proceeding;

          (iii)     irrevocably consents to the service of
process or any other legal summons out of said courts by mailing
copies thereof by registered airmail postage prepaid to the
address specified herein;

          (iv) irrevocably agrees that final judgment against it
in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive
evidence of the fact; and

          (v)  irrevocably agrees that nothing herein shall
affect the right of IFC to commence legal action or proceedings
or otherwise sue it in any other country which may have
jurisdiction (including the courts of New York to whose
jurisdiction BKPC irrevocably submits), or to serve process upon
it in any manner authorized by the laws of any such jurisdiction.

     Section 8.6. General Indemnity.

     (a)  BKPC shall indemnify and will keep indemnified, IFC,
its officers, directors, employees and/or agents against any
action, damage, loss, liability, cost, charge, expense, or
payments (including legal fees and expenses) which IFC, or any
such person, pays, suffers or incurs or is liable for, in respect
of any of the following:

          (i)  the occurrence of any Event of Default or any
event which, with notice, lapse of time or both would become an
Event of Default in accordance with Section 7.2 (Events of
Default);

          (ii) IFC exercising its rights or powers consequent
upon or arising out of the occurrence of any Event of Default or
other event.

     (b)  BKPC shall pay and reimburse IFC for all costs and
expenses in relation to the enforcement or protection or
attempted enforcement or protection of any of IFC's rights under
this Agreement and/or the Master Agreement including, but not
limited to, external legal costs and expenses and any pro
fessional consultants fees on a full indemnified basis.

     Section 8.7. Prohibition and Enforceability. Any provision
of, or the application of any provision of, this Agreement which
is void, illegal, or unenforceable in any jurisdiction does not
affect the validity, legality or enforceability of that provision
in any other jurisdiction.

     Section 8.8. Successors and Assigns. This Agreement binds
and benefits the respective successors and assigns of its
parties, except that BKPC may not assign or delegate any of its
rights or obligations under this Agreement.

     Section 8.9. Amendments. No variation of any term of this
Agreement or amendments thereto shall be effective except in
writing and signed by the parties.

     Section 8.10. Remedies and Waivers. No failure or delay by
IFC in exercising any power, remedy, discretion, authority or
other rights under this Agreement or the Master Agreement shall
impair or constitute a waiver in respect of that or any other
right. No single or partial exercise of such a right, precludes
its additional or future exercise. No waiver by IFC of any right
under this Agreement or the Master Agreement shall constitute a
waiver of any other right under this Agreement or the Master
Agreement. All waivers or consents given under this Agreement
must be in writing.

     Section 8.11. No Other Agreements. This Agreement and the
Master Agreement (including without limitation, the Schedules
hereto and thereto), together with the related letter agreement
dated the date hereof between BKPC and IFC, contain the entire
agreement of BKPC and IFC relating to its subject matter and
supersede all oral statements and prior writings concerning that
subject matter.

     Section 8.12. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same agreement.
     IN WITNESS WHEREOF, the parties hereto, acting through their
duly authorized representatives, have caused this Agreement to be
signed  in  their  respective names, as of the date  first  above
written.


                             BHOTE KOSHI POWER COMPANY
                             PRIVATE LIMITED



                             By:________________________________
                                Authorized Representative




                             INTERNATIONAL FINANCE
                             CORPORATION



                             By:________________________________
                                Authorized Representative






                                                       SCHEDULE 1
                                                      Page 1 of 2


Form of Certificate of Bhote Koshi Power Company Private Limited

              (as referred to in Section 5.3 of the
               Risk Management Facility Agreement)

    [LETTERHEAD OF BHOTE KOSHI POWER COMPANY PRIVATE LIMITED]


                                                           [Date]


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

Dear Sirs:


    Certificate of BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


1.   Please refer to the Risk Management Facility Agreement
signed between us, dated as of the Closing Date (the "Risk
Management Facility Agreement").

2.   Expressions defined in the Risk Management Facility
Agreement shall bear the same meaning herein.

3.   Pursuant to BKPC's request that IFC enter into an Eligible
Transaction with BKPC and for the purpose of Article 5 of the
Risk Management Facility Agreement, BKPC hereby certifies that
all conditions to the obligation of IFC to enter into the
Eligible Transaction set forth in Sections 5.1 and 5.2 of the
Risk Management Facility Agreement, have been and remain
satisfied.


                                                       SCHEDULE 1
                                                      Page 2 of 2



4.   The certification in paragraph 3 above is effective as of
the date of this Confirmation and will continue to be effective
as of the effective date of the relevant Eligible Transaction. If
the certification is no longer valid, BKPC will immediately
notify IFC.


                 Yours faithfully,

                 BHOTE KOSHI POWER COMPANY PRIVATE LIMITED



                 By ________________________
                     Authorized Representative1

_______________________________
      1   As  named  in  BKOC's  Certificate  of  Incumbency  and
Authority.