EXHIBIT NO. 10.143.03

                                                       SCHEDULE A

                          DEFINITIONS

          1.   Defined Terms.  The following terms shall have the
following meanings, except to the extent otherwise defined in any
Loan Document:

          "A Loan" shall mean the loan specified in
Section 3.1(a)(i) of the IFC Special Conditions hereof or, as the
context may require, the principal amount thereof from time to
time outstanding.

          "A Loan Disbursement" shall mean any amount of the A
Loan which is disbursed from time to time pursuant to Section 3.2
of the IFC Special Conditions.

          "A Loan Interest Rate" shall mean a rate equal to the
weighted average of the Tranche Interest Rates, the weighting
being based on the principal amount of each Tranche and the
average being rounded up to the nearest two decimal places.

          "A Loan Spread" means three and one-half percent
(3.50%) per annum.

          "Accounts" shall mean any "accounts" now or hereafter
owned by the Company as that term is defined in Section 9-106 of
the Code, and includes, without limitation, any and all of the
Company's currently existing and future accounts receivable and
contract rights.

          "Affiliate" shall mean, with respect to any Person, any
other Person directly or indirectly controlling, controlled by,
or under common control with that Person; provided, however, that
IFC and DEG shall not be deemed to be an Affiliate of any Sponsor
or the Company.  As used in this definition of "Affiliate," the
term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting
securities, by contract, or otherwise.

          "Agent" shall mean Nepal Grindlays Bank Limited or any
successors thereto under the Nepal Agency and Retention
Agreement.

          "Aggregate Purchase Price" has the meaning assigned to
that term in Section 4.1(a) of the IFC Special Conditions.

          "Annual Budget" shall mean, for any Fiscal Year, an
annual budget, prepared by the Company and approved by the
Independent Engineer and the Lenders in accordance with the
Investment Agreement, setting forth all Project Costs or
Operating and Maintenance Costs anticipated to be incurred during
such Fiscal Year in connection with the construction and/or
operation of the Project and shall include (a) all construction,
acquisition and non-construction Project Costs (including,
without limitation, all interest, fees, taxes and other carrying
costs), (b) the Disbursement Schedule and a schedule setting
forth the amount and dates the Company anticipates requesting
"promoter's" share amounts, and Subscription Amount Payments from
the Sponsor Shareholders, (c) the annual operating forecasts for
the Company together with the applicable assumptions, and (d)
such other information as the Lenders may reasonably request.

          "Annual Financial Statements" shall mean, with
respect to the Company, the EPC Contractor, the O&M Operator
and each Sponsor, as the case may be, its audited annual
consolidated and unconsolidated balance sheets, statements of
profit and loss, retained earnings, and cash flows for such
fiscal year, together with all the notes thereto and with
comparable figures for its previous fiscal year, each in
accordance with U.S. GAAP (other than (i) with respect to Himal
International Power Corporation Pvt. Ltd., which such
statements shall be in accordance with Nepalese accounting
principles and (ii) with respect to the EPC Contractor, which
such statements shall be in the form prepared and maintained by
the EPC Contractor in the ordinary course).

          "Approved Bank" shall mean any commercial bank of
recognized standing, having capital and surplus in excess of
$500,000,000 and having a rating on its commercial paper of at
least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by
Moody's Investors Service, Inc.

          "Assigned Approvals" means all Governmental Approvals
issued to the Company and relating to the Company or the
Project.

          "Assigned Contracts" shall mean the contracts
described on Exhibit A to the Security Agreement and Assignment
and any other agreement to which the Company is a party
executed after the date of the Investment Agreement.

          "Assignment Agreement" shall mean the Security
Agreement and Assignment, dated as of the Closing Date, among
Panda of Nepal, the Trustee, IFC and DEG.

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

          "Authority" shall mean any government or
governmental, administrative, fiscal, judicial, or
government-owned, body, department, commission, authority,
tribunal, agency or entity.

          "Authorized Officer" shall mean the officers of the
Company specified in its board resolution delivered to the
Lenders pursuant to Section 3.1 of the General Conditions as an
"Authorized Officer", and, for purposes of certificates or
other documents relating to financial matters, the financial
controller.

          "B Loan" shall mean the loan specified in
Section 3.1(a)(ii) of the IFC Special Conditions or, as the
context may require, the principal amount thereof from time to
time outstanding.

          "B Loan Disbursement" shall mean any amount of the B
Loan which is disbursed from time to time pursuant to Section
3.2 of the IFC Special Conditions.

          "B Loan Interest Determination Date" shall mean the
second Business Day before the beginning of each B Loan
Interest Period.

          "B Loan Interest Period" shall mean each period of
six (6) months commencing on an Interest Payment Date and
ending on the day immediately before the next following
Interest Payment Date, except in the case of the first period
for each B Loan Disbursement immediately following the
disbursement thereof when it shall mean the period commencing
with the date of disbursement of the relevant B Loan
Disbursement and ending on the day immediately before the next
following Interest Payment Date.

          "B Loan 1" shall mean the loan specified in Section
3.1(a)(ii) of the IFC Special Conditions hereof, or as the
context may require, the principal amount thereof from time to
time outstanding.

          "B Loan 2" shall mean the loan specified in Section
3.1(a)(ii) of the IFC Special Conditions hereof, or as the
context may require, the principal amount thereof from time to
time outstanding.

          "B Loan 3" shall mean the loan specified in Section
3.1(a)(ii) of the IFC Special Conditions hereof, or as the
context may require, the principal amount thereof from time to
time outstanding.

          "B Loan Floating Rate" shall mean the rate of
interest described in Section 3.3(b)(iii) of the IFC Special
Conditions.

          "B Loan Spread" means three and one half percent
(3.50%) per annum for each of B Loan 1 and B Loan 2 and three
and one-quarter percent (3.25%) per annum for B Loan 3.

          "Base Case Financial Projections" shall mean the
financial projections dated December 11, 1997.

          "Business Day" shall mean, except to the extent
expressly provided otherwise, a day when banks are open for
business in New York, New York, Wilmington, Delaware, London,
England, Cologne, Federal Republic of Germany, Kathmandu, Nepal
and, for the purpose of determining the interest rate on the B
Loan, and for the purpose of the determination of the "Rate
Setting Date," London, England and New York, New York, and, for
the purpose of determining the due date of a payment, a day on
which banks are open for business in the cities required to
effect such payment.

          "Capacity Shortfall" shall mean the failure to
deliver a Facility meeting the Guaranteed Performance Levels
(as such term is defined in the EPC Contract) in accordance
with the Performance Tests.

          "Capacity Shortfall Percentage" shall mean a
fraction, the numerator of which is equal to the difference
between 41 MW and the electrical output as demonstrated during
the Project Completion Test as measured by the permanent meter
(accurately functioning) installed at the high voltage side of
the main power transformer of the Facility, with both Units
operating simultaneously at full gate at the rated net head,
after deduction of Parasitic Load (as such term is defined in
the EPC Contract), and the denominator of which is 41 MW.

          "Cash Equivalents" shall mean, as to any Person, (A)
with respect to Dollars, (i) securities issued or directly and
fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof)
having maturities of not more than six months from the date of
acquisition by such Person; (ii) time deposits and certificates
of deposit, with maturities of not more than six months from
the date of acquisition by such Person, of any international
commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 and having a rating on its
commercial paper of at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case
maturing not more than six months after the date of acquisition
by such Person; (iii) commercial paper issued by a person
having a rating on its commercial paper of at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least
P-1, or the equivalent thereof by Moody's Investors Service,
Inc.; (iv) investments in money market funds, substantially all
the assets of which are comprised of securities of the types
described in clauses (i) and (ii) above; (v) United States
Securities and Exchange Commission registered money market
mutual funds conforming to Rule 2a-7 of the Investment Company
Act of 1940 in effect in the United States, that invest
primarily in direct obligations issued by the United States
Treasury and repurchase obligations backed by those
obligations, including funds for which the Trustee or an
Affiliate of the Trustee acts as an advisor, and rated in the
highest category by Standard & Poor's Corporation and Moody's
Investors Service, Inc.; (vi) any other investment which the
Lenders agree in writing shall constitute a Dollar-denominated
Cash Equivalent; and (B) with respect to Rupees, (i) securities
issued or directly and fully guaranteed or insured by HMGN or
any agency or instrumentality thereof (provided that the full
faith and credit of HMGN is pledged in support thereof) having
maturities of not more than six months from the date of
acquisition by such Person; (ii) time deposits and certificates
of deposit of Nepal Grindlays Bank Limited or of the Nepalese
commercial bank which may from time to time have the largest
capital in Nepal having maturities of not more than six months
from the date of acquisition by such Person; and (iii) any
other Rupee investment which the Lenders agree in writing shall
constitute a Rupee-denominated Cash Equivalent (if the Lenders
fail to respond to a request for their agreement within 30
days, they shall be deemed to have agreed in writing).

          "Charter Documents" shall mean, in respect of any
company, corporation, partnership, governmental agency, or
other enterprise, its founding act, charter, articles of
incorporation and by-laws, memorandum and articles of
association, statute or similar instrument.

          "Closing Date" shall mean December 12, 1997.

          "Code" or "UCC" shall mean the Uniform Commercial
Code, as the same may from time to time be in effect in the
State of Delaware or any other applicable jurisdiction.

          "Collateral" shall mean all real and personal
property, tangible and intangible, and all proceeds and
products thereof, subjected from time to time to the Liens
intended to be created by the Security Documents.

          "Collateral Proceeds" shall mean all monies due and
to become due to the Trustee or the Lenders from the Collateral
and shall include, without limitation, all accounts, contract
rights, all rights and benefits whatsoever accruing to it under
the Collateral and including without limitation, all rights to,
and rights to collect, proceeds due in connection with the
enforcement of the Collateral and the right to amend, cancel,
terminate and/or supplement the Collateral and all proceeds
thereof (as defined in the UCC).

          "Commercial Operation Date" shall mean the date
specified in a certificate delivered by the independent
engineer pursuant to the PPA stating that both the Units (for
purposes of this definition, as such terms are defined in the
PPA) have satisfied and successfully demonstrated performance
in accordance with the requirements of Schedule 8 of the PPA,
or the date on which the Project is deemed to be commissioned
pursuant to Section 5.5 of the PPA, as certified by the
independent engineer, which date is scheduled as 17 Poush 2056
(January 1, 2000).

          "Commitment" shall mean:

          (a)  the commitment of IFC to make the IFC Loans
under the IFC Investment Agreement in an aggregate principal
amount up to:

               (i) for the A Loan, $21,000,000; and

               (ii) for the B Loan, $36,000,000; and

          (b)  the commitment of DEG to make the DEG Loan under
the DEG Investment Agreement in an aggregate principal amount
up to DM21,000,000.

          "Company" shall mean Bhote Koshi Power Company
Private Limited, a private limited liability company organized
and existing under the laws of Nepal.

          "Company Bankruptcy" shall mean any voluntary or
involuntary bankruptcy, insolvency, reorganization, compromise,
dissolution, liquidation, arrangement or readjustment of debt
in respect of the Company.

          "Company Completion Certificate" shall mean a written
certificate of an Authorized Officer of the Company, stating
the following:

          (i) the Project has been properly designed,
     constructed, tested and commissioned in accordance with
     the PPA and in accordance in all material respects with
     the EPC Contract; the Commercial Operation Date has
     occurred; the Final Acceptance Certificate has been
     delivered in accordance with the EPC Contract, and all
     payments due as of the date of the aforesaid written
     certificate (A) by the Company to NEA, or by NEA to the
     Company, for penalty or otherwise, under the PPA, or (B)
     by the Company to the EPC Contractor, or by the EPC
     Contractor to the Company, under the EPC Contract, or (C)
     by the Company to the Owner's Engineer, or by the Owner's
     Engineer to the Company, under the Services Agreements, or
     (D) for other Project Costs have been paid in full; and

          (ii) a Project Completion Test has been successfully
     performed.

All defined terms used in such certificate shall have the
meanings set forth in the Investment Agreement.

          "Company's Engineer Agreement" shall mean the
Services Agreements.

          "Company Equity Distribution Fund" means the fund of
that name established pursuant to Section 3.3 of the Panda
Global Holdings Indenture.

          "Consents" shall mean the HMGN Consent, the HMGN
Letter Agreement, the NEA Consent, the NEA Letter Agreement,
the EPC Contractor Consent, the EPC Contractor Letter
Agreement, the ICBC Consent, the Owner's Engineer Consent, the
O&M Operator Consent and the Panda of Nepal Consent.

          "Consolidation Date" means the first Interest Payment
Date after the A Loan has been fully disbursed (or the
undisbursed balance of the A Loan has been canceled, as
provided in Section 3.12 of the IFC Special Conditions).

          "Construction Sub-Account" shall mean the
Construction Sub-Account created pursuant to the Trust and
Retention Agreement.

          "Contingent Obligation" shall mean, as to any Person,
any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of
such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds
(x) for the purchase or payment of any such primary obligation
or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring
the holder of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or
(iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business.  The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

          "Correction Notice" shall mean a notification
delivered to the Trustee by the Lenders stating that a Payment
Requisition or Debt Service and Reserve Deposit Certificate is
incorrect, and providing correct information, or stating that
the Lenders require information (as specified in such
Correction Notice) to determine the accuracy of a Payment
Requisition or a Debt Service and Reserve Deposit Certificate.

          "Debt Payment Sub-Account" shall mean the Debt
Payment Sub-Account created pursuant to the Trust and Retention
Agreement.

          "Debt Service" shall mean all, or as the context may
require any portion, of the principal and interest and fees, if
any, on the Loans and all fees, charges and expenses
(including, without limitation, obligations to indemnify or to
make reimbursement), payable or to become payable under the
Investment Agreement with respect to the Loans.

          "Debt Service and Reserve Deposit Certificate" shall
mean a properly executed certificate for the transfer or
deposit of funds in the Offshore Retention Account in the form
of Schedule C to the Trust and Retention Agreement.

          "Debt Service Coverage Ratio" shall mean, for any
period, the ratio of net income of the Company, after corporate
Tax but before depreciation and interest charges, less any
interest income received during the period, less the amount to
be deposited in the Maintenance Reserve Sub-Account during such
period, over the aggregate amount of principal and interest and
fees, if any, on the outstanding Loans and all other
Indebtedness of the Company and all fees, charges and expenses
(including, without limitation, obligations to indemnify or to
make reimbursement) paid or required to be paid with respect to
such outstanding Loans other Indebtedness during such period.

          "Debt Service Reserve Requirement" shall mean, on or
before the first scheduled Principal Payment Date, the
aggregate Debt Service payable on the Loans on the first
scheduled Principal Payment Date under the Investment
Agreement, and, thereafter, aggregate Debt Service payable on
the Loans on the next scheduled Principal Payment Date.

          "Deed of Assignment of Reinsurance" shall mean the
Deed of Assignment of Reinsurance, dated November 7, 1997,
among the Company, the Trustee and National Life and General
Insurance Company Ltd.

          "Debt Service Reserve Sub-Account" shall mean the
Debt Service Reserve Sub-Account created pursuant to the Trust
and Retention Agreement.

          "Default" shall mean any event, act or condition
which, with notice, lapse of time, or both, or the fulfillment
of any other requirement provided for in the definition of
"Event of Default" would constitute an Event of Default.

          "Defects Liability Period" shall mean the period
beginning on the Final Acceptance Date (as such term is defined
in the EPC Contract) and ending on the later of:  (a) two (2)
years after the Final Acceptance Date, and (b) the date on
which the warranties provided by the EPC Contractor with
respect to the Project, as extended in accordance with Article
11.1 of the EPC Contract, expire.

          "Deficiency" shall mean any Project Funds Shortfall.

          "Deficiency Loan" shall mean any subordinated loan
made by a Sponsor to fund a Deficiency in accordance with
Article 3 of the Share Retention and Project Funds Agreement.

          "Deficiency Notice" shall mean a notification, given
by either Lender at any time or from time to time to the
Company, Bankers Trust Company as trustee for the Issuer Equity
Distribution Fund and the Company Equity Distribution Fund and
the Sponsors, stating that a Deficiency exists and stating the
amount of such Deficiency.

          "Deficiency Sub-Account" shall mean the Deficiency
Sub-Account created pursuant to the Trust and Retention
Agreement.

          "Deficiency Subscription" shall mean a subscription
for and purchase of Shares by a Sponsor to fund a Deficiency in
accordance with Article 3 of the Share Retention and Project
Funds Agreement.

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

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

          "DEG Disbursement Request" shall mean a request by
the Company for a Disbursement of the DEG Loan substantially in
the form of Schedule 3.2(a)(i) to the DEG Special Conditions.


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

          "DEG Special Conditions" shall mean the DEG Special
Conditions dated as of the Closing Date between the Company and
DEG.

          "Designee" shall mean a party designated by the
Trustee with the prior approval of the Lenders, including,
without limitation, Nepal Grindlays Bank Limited to act as its
agent under the Nepal Agency and Retention Agreement.

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

          "Disbursement" means an A Loan Disbursement, a B Loan
Disbursement, or a DEG Loan Disbursement or all of such
Disbursements, as the context requires.

          "Disbursement Schedule" shall mean the Schedule for
Disbursements, approved by the Lenders and the Independent
Engineer, attached to the General Conditions as Schedule
3.1(j)(ii).

          "Dollars" or "US Dollars" or the sign "$" shall each
mean freely transferable lawful money of the United States.

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

          "EMMP" shall mean the Environmental Mitigation,
Management and Monitoring Plan for the Upper Bhote Koshi
Hydroelectric Project dated November 1996, submitted by the
Company to HMGN and included by HMGN as an attachment to the
Project License issued December 1996, as approved by the
Lenders.

          "Environmental Law" means all applicable World Bank
policies as in effect in March 1996, relating to the
environment, indigenous peoples, involuntary resettlement, and
occupational health and safety, the EMMP, any statute, law,
rule, regulation, ordinance, code, guideline or policy, or rule
of common law (including the EMMP, the HSE Plan, and Nepalese
environmental laws applicable to the Project), in each case,
now or hereafter in effect and in each case as amended, any
applicable judicial or administrative order, consent, decree,
or judgment, or any permissions, permits, certifications,
authorizations, approvals, and licenses for the Facility, both
obtained and applied for, including any variances or waivers in
effect from time to time necessary or desirable for the Project
relating to the environment or to noise, emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or
wastes into the environment, including without limitation,
those relating to vehicular noise and emissions standards,
ambient equipment noise standards, prescribed hours of
operation with respect to noise (nuisance), or discharges into
ambient air, surface water, groundwater or land, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
Hazardous Materials, substances or waste.

          "EPC Contract" shall mean the Amended and Restated
Contract for the Engineering, Procurement and Construction of
the Upper Bhote Koshi Hydroelectric Project, dated as of
December 19, 1996, between the Company and the EPC Contractor,
together with all change orders executed thereunder on or prior
to the date of this Agreement.

          "EPC Contractor" shall mean China Gezhouba
Construction Group Corporation for Water Resources and
Hydropower, a corporation organized and existing under the laws
of the People's Republic of China.

          "EPC Contractor Consent" shall mean the EPC
Contractor's and Financing Parties' Acknowledgement and Consent
dated as of the Closing Date, among the EPC Contractor, IFC and
the Trustee, and the EPC Contractor Letter Agreement.

          "EPC Contractor Letter Agreement" shall mean the EPC
Contractor Letter Agreement dated as of the Closing Date, among
the EPC Contractor, IFC, DEG and the Trustee.

          "EPC Documents" shall mean the EPC Contract, the EPC
Contractor Consent, the EPC Contractor Letter Agreement, the
EPC Performance Guarantees, and any other documents to which
the EPC Contractor is a party in connection with the Project.

          "EPC Performance Guarantees" shall mean each of the
performance guarantees issued in favor of the Company by banks
satisfactory to the Lenders and in support of the obligations
of the EPC Contractor under the EPC Contract.  The EPC
Performance Guarantees shall include the EPC Performance
Guarantee and the EPC Warranty Performance Guarantee, which
instruments are intended to support the obligations of the EPC
Contractor with respect to the Performance Guarantee and the
Warranty Performance Guarantee, respectively (as such terms are
defined in the EPC Contract).

          "EPC Performance Guarantee" shall mean the
performance guarantee to be delivered in connection with
Article 3.26 of the EPC Contract substantially in the form of
Annex A-1 attached to this Schedule A, in form and substance
satisfactory to the Lenders and issued in favor of the Company
by a bank satisfactory to the Lenders.

          "EPC Warranty Performance Guarantee" shall mean the
performance guarantee to be delivered in connection with
Article 7.2.5 of the EPC Contract in form and substance
satisfactory to the Lenders and issued in favor of the Company
by a bank satisfactory to the Lenders.

          "Equipment" shall mean both (i) Equipment, as that
term is defined in the EPC Contract and (ii) any "equipment" or
"fixtures", as those terms are defined in the Code, now or
hereafter owned by the Company, including, without limitation,
all machinery, equipment, furnishings, fixtures, vehicles,
tools, supplies, and other equipment of any kind and nature,
wherever situated, used in connection with the construction,
operation and maintenance of the Project and any and all
additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories, improvements,
upgrades, and accessories installed thereon or affixed thereto.

          "Equity Letters of Credit" shall mean each of the
irrevocable letters of credit, substantially in the form of
Annex A-2 attached to this Schedule A, issued in favor of the
Trustee by banks satisfactory to the Lenders, in support of the
obligations of each Sponsor Shareholder (other than Himal
International Power Corporation Pvt. Ltd.) under its
Subscription Agreement.

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

          "Event of Default" shall mean the occurrence of any
of the events described in Article 7 of the General Conditions
or any event described as an event of default in any Loan
Document.

          "Excluded Assets" shall mean (i) the Company's right,
title and interest in and to the Holding Account or the Nepal
Holding Account and any cash, investments and securities on
deposit therein, and (ii) any rights, benefits or claims of any
Sponsor.

          "Facility" shall mean the land, structures including
the dam, spillway, desanding basin, tunnel and surge shaft,
penstock, powerhouse, and necessary infrastructure, Equipment,
all electrical internal services, onsite and offsite building
and structures and infrastructure, pipelines, electrical
transmission lines and interconnection facilities,
communications systems, and disposal facilities as fully
described in the Scope of Work attached to the EPC Contract as
Exhibit I thereto and as contemplated by the Project Agreement
and the PPA.

          "Facility Procedures Manual" shall mean the Facility
Procedures Manual as defined in the EPC Contract and approved
by the Lenders and the Independent Engineer.

          "Final Acceptance Date" shall have the meaning
assigned thereto in the EPC Contract.

          "Financial Closing Date" shall mean the date on which
each of IFC and DEG makes an initial Disbursement pursuant to
the IFC Investment Agreement and the DEG Investment Agreement,
respectively.

          "Financing Plan" shall mean the Financing Plan
attached as Schedule 2.2(a) to each of the IFC Special
Conditions and the DEG Special Conditions.

          "Financial Statements" shall mean, with respect to
the Company, the EPC Contractor, the O&M Operator, the Owner's
Engineer and each Sponsor, as the case may be, its Quarterly
Financial Statements, as applicable, and Annual Financial
Statements, as the case may be.

          "First Unit" shall have the meaning assigned thereto
in the EPC Contract.

          "First Unit Delivery" shall have the meaning assigned
thereto in the EPC Contract.

          "Fiscal Year" shall mean the accounting year of the
Company commencing each year on July 16 and ending on the
following July 15, or such other accounting period of the
Company as the Company may, with the Lenders' consent and with
notice thereof to the Trustee, from time to time designate as
the accounting year of the Company.

          "Fixed Rate Swap Equivalent" means for any principal
amount, the fixed interest rate payable in the swap market in
the Loan Currency against receipt of interest at LIBOR 1. on an
equivalent amount of principal on the Rate Setting Date for the
related A Loan Disbursement, or 2. in the case of any
prepayments on an amount of the Loan Currency equal to the
principal amount of the A Loan outstanding on the prepayment
date, in both cases either a. as determined by IFC from the
relevant pages of the Dow Jones Telerate service, the Reuters
service or the Bloomberg Financial Markets service (as selected
by IFC), using the information displayed on the relevant page
for the relevant Rate Setting Date or prepayment date, as the
case may be (and if the page displays information which changes
during the course of the day rather than staying fixed for the
whole day, as of such time as IFC may most recently have
advised the Company) with that information being interpolated
on a straight-line basis so as to match the actual maturities
for the relevant Tranche (as illustrated in Annex A attached to
the IFC Special Conditions) or b. (in the event that all such
services cease to be available or none of them contains all the
necessary swap equivalent information or, in IFC's reasonable
opinion, none of them any longer provides an appropriate method
of determining fixed rates, either generally or on any relevant
Rate Setting Date or prepayment date) as determined by IFC
using whatever equivalent means of calculation IFC considers
appropriate.

          "Force Majeure Event" shall have the meaning assigned
thereto in the PPA, the Project Agreement, the EPC Contract, or
the Operations and Maintenance Agreement, as the case may be.

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

          "General Intangibles" shall mean any "general
intangibles", as that term is defined in the Code, now or
hereafter owned by the Company, including, without limitation,
equipment leases, partnership interests, joint venture
interests, all patent rights, trademarks, copyrights, trade
names, goodwill, registrations, license rights, rights in
intellectual property, licenses, permits, partnership and other
business records, customer and subscriber lists, computer
programs, tapes, disks and related data processing software
owned by or in which the Company has an interest, rights to
refunds or indemnification, the right to receive any Proceeds
and all other intangible personal property of the Company of
every kind and nature.

          "GLOF" shall mean glacial lake outburst flood.

          "Governmental Approval" shall mean any authorization,
permit, clearance, license, undertaking, consent or approval
executed or to be issued by, any Governmental Authority.

          "Governmental Authority" shall mean Nepal Rastra
Bank, HMGN and any federal, national, regional, municipal or
local authority or regulatory department, body, political
subdivision, commission, instrumentality, agency, ministry,
court, legislative, judicial or administrative body, taxing
authority or other authority in any jurisdiction having
jurisdiction over any party (or any subcontractor of any such
party) to a Principal Document or the services or obligations
to be performed thereunder, or the Project or the NEA System.

          "Guarantee Notice" shall have the meaning assigned
thereto in the Share Retention and Project Funds Agreement.

          "Guaranteed Performance Levels" shall have the
meaning assigned thereto in the EPC Contract.

          "Harza Engineering Company International, a limited
liability company" shall mean Harza Engineering Company
International, a limited liability company, a limited liability
company organized and existing under the laws of the State of
Wyoming.

          "Harza Engineering Company International L.P." shall
mean Harza Engineering Company International L.P., a limited
partnership organized and existing under the laws of the State
of Delaware.

          "Hazardous Materials" shall mean any chemicals,
materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of
similar import, under any Environmental Law; and any other
chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority
of Nepal by reason of its hazardous nature.

          "Hedging Costs" shall mean all amounts, fees and
commissions paid or payable by the Company pursuant to any
Hedging Documents, including, without limitation, principal,
accrued interest, current replacement value or Mark-to-Market
Value of Eligible Transactions (as such terms are defined in
the Hedging Documents), amounts paid or payable by the Company
to amend, modify, terminate or settle in advance of scheduled
expiration or otherwise unwind such Hedging Documents.

          "Hedging Documents" shall mean the Risk Management
Facility Agreement, Master Agreement and all documents executed
in connection therewith.

          "Hedging Transactions" shall mean any swap agreement,
cap agreement, collar agreement, futures contract, forward
contract or similar arrangement with respect to interest rates,
currencies or commodities.

          "Himal International Power Corporation Pvt. Ltd."
shall mean Himal International Power Corporation Pvt. Ltd., a
private limited company organized and existing under the laws
of Nepal.

          "HMGN" shall mean His Majesty's Government of Nepal.

          "HMGN Consent" shall mean the Consent and Agreement
dated as of October 5, 1997, among the Company, HMGN, IFC and
the Trustee, and the HMGN Letter Agreement.

          "HMGN Leases" shall mean the Lease Agreement between
HMGN, Ministry of Forest and Soil Conservation, Department of
Forest and the Company, dated February 27, 1997, concerning
granting a lease on certain land referred to therein; and any
other leases of real property entered into between HMGN and the
Company.

          "HMGN Letter Agreement" shall mean the HMGN Letter
Agreement to be dated on or before the Financial Closing Date,
among the Company, HMGN, IFC, DEG and the Trustee.

          "HMGN Project License" shall mean the licenses to be
issued by HMGN as described in Section 3.1 of the Project
Agreement.

          "Holding Account" shall mean the Holding Account
created pursuant to the Trust and Retention Agreement.

          "HSE Plan" shall mean (a) prior to the Commercial
Operation Date, a Health, Safety, and Environmental Plan
relating to the period of construction of the Project,
satisfactory in form and substance to the Lenders, and (b)
after the Commercial Operation Date, the Health, Safety, and
Environmental Plan relating to the period of operation of the
Project, satisfactory in form and substance to the Lenders.

          "ICBC" shall mean the Industrial and Commercial Bank
of China.

          "ICBC Consent" shall mean the Acknowledgement and
Consent dated as of the Closing Date between ICBC and the
Trustee.

          "IFC" shall mean International Finance Corporation,
an international organization organized and existing by virtue
of the Articles of Agreement among its member countries.

          "IFC Disbursement Request" means a request by the
Company for a Disbursement of the IFC Loans substantially in
the form of Schedule 3.2(a)(i) to the IFC Special Conditions.

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

          "IFC Loans" shall mean, collectively, the A Loan and
the B Loan, or, as the context may require, the aggregate
principal amounts thereof from time to time outstanding.

          "IFC Shares" has the meaning assigned to that term in
Section 4.1(a) of the IFC Special Conditions.

          "IFC Special Conditions" shall mean the IFC Special
Conditions dated as of the Closing Date between the Company and
IFC.

          "IFC Subscription" means the subscription for shares
provided for in Article 4 of the IFC Special Conditions.

          "Indebtedness" shall mean, as to any Person, without
duplication (i) all indebtedness (including principal,
interest, fees and charges) of such Person for borrowed money
or for the deferred purchase price of property or services and
any obligation for the payment of money (other than amounts
owed by the Company to the EPC Contractor, the O&M Operator and
the Owner's Engineer under the EPC Contract, the Operations and
Maintenance Agreement and Services Agreements, respectively),
(ii) the available amount of all letters of credit issued for
the account of such Person, (iii) all liabilities secured by a
Lien on any property owned by such Person, whether or not such
liabilities have been assumed by such Person, (iv) the
aggregate amount required to be capitalized under leases under
which such Person is the lessee, (v) all Contingent Obligations
of such Person, and (vi) credit-based hedging arrangements, if
any.

          "Independent Engineer" shall mean Stone & Webster
Engineering Corporation (Denver office) and Stone & Webster
Overseas Consultants, Inc., and any replacement therefor
appointed by the Lenders in consultation with the Company.

          "Independent Engineer's Agreement" shall mean the
agreement dated 10 October 1996, between IFC and the
Independent Engineer, as subsequently assigned to Stone &
Webster Overseas Consultants, Inc., pursuant to that certain
Enabling and Guarantee Agreement effective November 1, 1997,
among Stone & Webster Engineering Corporation, Stone & Webster
Overseas Consultants, Inc. and IFC, the agreement dated 22
October 1996 between the Independent Engineer and Panda Energy
International, Inc. as such agreement may be subsequently
assigned to Stone & Webster Overseas Consultants, Inc., and the
Independent Engineer's Letter Agreement.

          "Independent Engineer's Certificate" shall mean a
certificate of the Independent Engineer delivered to each of
the Lenders stating that the Final Acceptance Date has
occurred, the Project is in compliance with the EMMP, the
Company has implemented the approved HSE Plan, the Operations
and Maintenance Plan and Facility Procedures Manual approved by
the Lenders have been adopted and implemented, the NEA
Interconnection Facilities have been installed in accordance
with Article 7 of the PPA or, there exists an alternative
transmission line and related facilities or other means of
evacuating power (provided, however, that such alternative
transmission line and related facilities or other means of
evacuating power must in all cases be satisfactory to the
Lenders in their sole and absolute discretion), and the Company
has implemented a system to mitigate against the potential
effects of a GLOF, including implementing a GLOF early warning
system, the Company Completion Certificate is correct with
respect to certifying that (i) the Project has been properly
designed, constructed, tested and commissioned in accordance
with the PPA  and in accordance in all material respects with
the EPC Contract, the Commercial Operation Date has occurred,
and the Final Acceptance Certificate has been delivered in
accordance with the EPC Contract, and (ii) a Project Completion
Test has been successfully performed, the land acquired by the
Company is the land on which the Project is to be operated and
in the Independent Engineer's reasonable judgment provides
sufficient area for operation of the Project and the NEA has
accepted the Commercial Operation Date pursuant to the PPA.

          "Independent Engineer's Letter Agreement" shall mean
the Independent Engineer's Letter Agreement dated as of the
Closing Date, among IFC, DEG and the Independent Engineer.

          "Independent Engineer's Report" shall mean the
Independent Engineer's written report prepared pursuant to
Section 3.1(t) of the General Conditions.

          "Insurance Consultancy Services Agreement" shall mean
the letter agreement dated as of the Closing Date, among the
Insurance Consultant, IFC, DEG and the Company.

          "Insurance Consultant" shall mean INDECS Ltd. and any
replacement therefor appointed by the Lenders in consultation
with the Company.

          "Insurance Proceeds" shall mean any insurance
proceeds received under any insurance policy maintained by the
Company or by the EPC Contractor, the Owner's Engineer or the
O&M Operator in respect of the Project (other than proceeds
payable under third party liability policies).

          "Insurance Proceeds Request" shall mean a properly
executed request for withdrawal and transfer of funds in the
Insurance Proceeds Sub-Account, in the form of Schedule B to
the Trust and Retention Agreement.

          "Insurance Proceeds Sub-Account" shall mean the
Insurance Proceeds Sub-Account created pursuant to the Trust
and Retention Agreement.

          "Interest Payment Date" means the 15th Day of March
and September in each year through the final Principal Payment
Date, provided that if such date is not a Business Day, the
Interest Payment Date shall be the Business Day determined in
accordance with Section 3 of this Schedule A.

          "Intercreditor Agreement" shall mean the
Intercreditor Agreement between IFC and DEG, dated as of the
Closing Date.

          "Inventory" shall mean "inventory" as that term is
defined in the Code, now or hereafter owned by the Company,
including, without limitation, (a) all products, goods,
materials and supplies produced, purchased or acquired by the
Company for the purpose of sale in the ordinary course of its
business, (b) maintenance materials inventory and (c) goods in
which the Company has an interest in mass or a joint or other
interest or right of any kind.

          "Investment Agreement" shall mean and include the IFC
Investment Agreement dated as of the Closing Date between the
Company and IFC and the DEG Investment Agreement dated as of
the Closing Date between the Company and DEG.

          "Issuer Equity Distribution Fund" means the fund of
that name established pursuant to Section 3.3 of the Panda
Global Energy Indenture.

          "Joint Venture Agreement" shall mean the Amended and
Restated Joint Venture Agreement among Himal International
Power Corporation Pvt. Ltd., Panda of Nepal, RDC of Nepal and
International Finance Corporation dated as of the Closing Date.

          "Land Agreements" shall mean the agreements for the
purchase of real property entered into between the Company and
Persons other than HMGN.

          "Land Leases" shall mean the leases of real property
entered into between the Company and Persons other than HMGN,
as set forth in Schedule 3.1(e) of the General Conditions.

          "Leases" shall mean the Land Leases and the HMGN
Leases.

          "Lender Completion Notice" shall mean the Lenders'
written confirmation that the Company Completion Certificate is
acceptable to each of the Lenders and that Project Completion
has occurred.

          "Lenders" shall mean IFC and DEG.

          "Letter of Information" shall mean the Letter of
Information dated as of March 18, 1997, satisfactory in form
and substance to the Lenders, providing a detailed description
of the Company, the Project, and the Financing Plan, the award
of the Project by HMGN to RDC of Nepal, Panda of Nepal, Himal
International Power Corporation Ltd., Panda Energy
International, Inc., Harza Engineering Company International, a
limited liability company, Harza Engineering Company
International L.P. and any specific concessions related to the
award, actions taken or to be taken by the Company and Panda
Energy International, Inc. pursuant to Section 3.1(q) of the
General Conditions.

          "LIBOR" means the interest settlement rate for
deposits of Dollars in London displayed on the page designated
as page 3750 on the Dow Jones Telerate service (or any other
page that replaces page 3750 and displays London interbank
offered rates for deposits of Dollars) in the column headed USD
as of 11:00 a.m. London time on the date of determination, for
a period of six months.

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

          "Liquidated Damages Proceeds" shall mean any
liquidated damages paid by or on behalf of the EPC Contractor
under the EPC Contract.

          "Liquidated Damages Sub-Account" shall mean the
Liquidated Damages Sub-Account created pursuant to the Trust
and Retention Agreement.

          "Loans" shall mean and include the IFC Loans and the
DEG Loan.

          "Loan Currency" shall mean U.S. Dollars or Deutsche
Marks or Euro.

          "Loan Documents" shall mean the Investment Agreement
and the Security Documents.

          "Long-term Debt" shall mean all liabilities and
Indebtedness other than Current Liabilities.

          "Maintenance Amount" shall mean the amount certified
in the Maintenance Amount Certification to be the net
incremental costs of or reduction in rate of return on capital
incurred or suffered by IFC and/or DEG (or their respective
Participants, if any), as the case may be, in connection with
the making or maintaining of the IFC Loans and/or the DEG Loan
(or any of such Participant's Participation therein, as the
case may be), as the case may be, which result from:

                    (i)  any change in any applicable law or
               regulation or directive (whether or not having
               force of law) or in its interpretation or
               application by any Authority charged with its
               administration; or

                    (ii) compliance with any request from, or
               requirement of, any central bank or other
               monetary or other Authority;

                         which in any case, after the date of
               the Investment Agreement:

                              (A)  imposes, modifies or makes
                    applicable any reserve, special deposit or
                    similar requirements against assets held
                    by, or deposits with or for the account of,
                    or loans or commitment to lend by IFC
                    and/or DEG (or their respective
                    Participants, if any), as the case may be;

                              (B)  imposes a cost on IFC and/or
                    DEG, as the case may be, as a result of IFC
                    and/or DEG, as the case may be, having made
                    the IFC Loans and/or the DEG Loan or any
                    related commitment, as the case may be (or
                    on their respective Participants, if any as
                    a result of such Participant having
                    acquired its Participation or agreed to do
                    so), or reduces the rate of return on the
                    overall capital of IFC and/or DEG (or their
                    respective Participants, if any), as the
                    case may be, which it would have achieved,
                    had IFC and/or DEG (or their respective
                    Participants, if any), as the case may be,
                    not made the IFC Loans and/or the DEG Loan
                    (or acquired such Participant's
                    Participation or committed to do so), as
                    the case may be;

                              (C)  changes the basis of
                    taxation on payments received by IFC and/or
                    DEG (or their respective Participants, if
                    any), as the case may be, in respect of the
                    IFC Loans and/or the DEG Loan (or such
                    Participant's Participation or any related
                    commitment), as the case may be (otherwise
                    than by a change in taxation of the overall
                    net income of IFC and/or DEG (or their
                    respective Participants, if any), as the
                    case may be, imposed by the jurisdiction of
                    its incorporation (or in which any such
                    Participant books its Participation) or in
                    any political subdivision of any such
                    jurisdiction); or

                              (D)  imposes on IFC and/or DEG
                    (or their respective Participants, if any),
                    as the case may be, any other condition
                    regarding the making or maintaining of the
                    IFC Loans and/or the DEG Loan (or such
                    Participant's Participation or their
                    respective commitments to do so), as the
                    case may be.

          "Maintenance Amount Certification" shall mean a
certification furnished from time to time by IFC and/or DEG, as
the case may be, certifying:

                    (i)  the circumstances giving rise to the
               Maintenance Amount;

                    (ii) that the costs of IFC and/or DEG (or
               their respective Participants, if any), as the
               case may be, have increased or the rate of
               return or on capital of any of them has been
               reduced;

                    (iii)     that, in the opinion of IFC
               and/or DEG (or their respective Participants, if
               any), as the case may be, it has exercised
               reasonable efforts to minimize or eliminate such
               increase or reduction as the case may be; and

                    (iv) the Maintenance Amount.

          "Maintenance Reserve Requirement" shall mean fifty
five thousand Dollars ($55,000), which amount shall be
increased on each January 1 of each year, commencing on the
earlier of (i) January 1, 2001 and (ii) one year after the
Commercial Operation Date, to reflect increases in the U.S.
Consumer Price Index from the year preceding the year with
respect to which the adjustment is occurring.

          "Master Agreement" shall mean the Master Agreement
dated as of the Closing Date between the Company and IFC
relating to Hedging Transactions between the Company and IFC.

          "Maintenance Reserve Sub-Account" shall mean the
Maintenance Reserve Sub-Account created pursuant to the Trust
and Retention Agreement.

          "Material Adverse Change" shall mean that one or more
events, conditions or circumstances have occurred or exist
which, in the reasonable judgment of the Lenders, materially
adversely affects or might adversely affect (i) the Project, or
(ii) the ability of the Company, the Sponsors, the O&M Operator
or, prior to the later of the date of expiration of the Defects
Liability Period and the Project Completion Date, the EPC
Contractor or the Owner's Engineer to meet in the normal course
of business their respective obligations under any of the
Principal Documents, (iii) the validity or enforceability of
any Principal Document, or (iv) the Lenders' rights and
security interests under the Security Documents.

          "Month" shall mean a calendar month.

          "Mortgage" shall mean the first mortgages and charges
over immovable and movable assets of the Company.

          "NEA" shall mean Nepal Electricity Authority,
constituted under the Nepal Electricity Authority Act 2041,
having its registered office at Durbar Marg, Kathmandu, Nepal.

          "NEA Consent" shall mean the Consent and Agreement
dated May 25, 1997, among the Company, NEA, IFC and the
Trustee, and the NEA Letter Agreement.

          "NEA Interconnection Facilities" shall have the
meaning assigned thereto in the PPA.

          "NEA Letter Agreement" shall mean the NEA  Letter
Agreement dated December 8, 1997, among the Company, NEA, IFC,
DEG and the Trustee.

          "NEA Letter of Credit" shall mean the irrevocable
letter of credit, in form and substance satisfactory to the
Lenders, issued by a bank acceptable to the Lenders in favor of
the Company, in support of the obligations of the NEA under the
PPA, and as provided by NEA pursuant to Section 9.4 of the PPA.

          "NEA System" shall have the meaning assigned thereto
in the PPA.

          "Nepal Agency and Retention Agreement" shall mean the
Nepal Agency and Retention Agreement, dated as of the Closing
Date, among the Company, IFC, DEG, the Trustee and the Agent.

          "Nepal Deposit Certificate" shall mean a properly
executed certificate for the deposit of funds in the form of
Schedule B to the Nepal Agency and Retention Agreement.

          "Nepal Dollar Sub-Account" shall mean the Nepal
Dollar Sub-Account created pursuant to the Nepal Agency and
Retention Agreement.

          "Nepal Holding Account" shall mean the Nepal Holding
Account created pursuant to the Nepal Agency and Retention
Agreement.

          "Nepal Operations and Maintenance Sub-Account" shall
mean the Nepal Operations and Maintenance Sub-Account created
pursuant to the Nepal Agency and Retention Agreement.

          "Nepal Payment Requisition" shall mean a properly
executed certificate for the deposit of funds in the form of
Schedule A to the Nepal Agency and Retention Agreement.

          "Nepal Reserve Sub-Account" shall mean the Nepal
Reserve Sub-Account created pursuant to the Nepal Agency and
Retention Agreement.

          "Nepal Retention Account" shall mean the Nepal
Retention Account created pursuant to the Nepal Agency and
Retention Agreement, including all sub-accounts thereof.

          "Non-Material Agreements" shall mean (i) agreements
entered into by the Company in the ordinary course of business
with environmental consultants, public relations consultants,
financial consultants, and legal counsel for corresponding
professional services in connection with the Project under
which the Company shall have obligations not in excess of
$150,000 under any such agreements or $450,000 in the aggregate
under all such agreements in any Fiscal Year and (ii)
agreements (other than those described in clause (i)) entered
into by the Company in the ordinary course of business under
which the Company shall have obligations not in excess of
$100,000 under any of such agreements or $250,000 in the
aggregate under all such agreements in any fiscal year,
excluding, however, in all cases any agreement of the Company
the performance or non-performance of which could reasonably be
expected to result in a Material Adverse Change.

          "Notice of Default" shall mean a notice, delivered by
the Company to the Trustee and each of the Lenders, of any act,
occurrence, or condition the happening or existence of which
constitutes a Default or an Event of Default or a notice
delivered by the Lenders to the Company and the Trustee of a
Default or Event of Default.  Any such notice delivered by the
Lenders shall specify the nature of such act, occurrence or
condition, the date of the happening or the beginning of the
existence thereof and any Notice of Default delivered by the
Company shall describe the steps taken or proposed to be taken
by the Company to cure such Default or Event of Default.

          "Notice to Proceed" shall have the meaning assigned
thereto in the EPC Contract.

          "O&M Operator" shall mean Harza Engineering Company
International L.P., and, if and to the extent expressly
permitted under the Investment Agreement, its assignees.

          "O&M Operator Consent" shall mean the Consent and
Agreement dated as of the Closing Date, among the Company, the
O&M Operator, IFC, DEG and the Trustee.

          "Obligations" shall mean all amounts owing by the
Company to the Trustee, IFC or DEG pursuant to the terms of any
Loan Document, including without limitation (1) the principal
of and interest on the Loans and the payment of all other
obligations and liabilities (including, without limitation,
indemnities, fees, expenses, commissions and interest) of the
Company incurred under, arising out of or in connection with
such Loans or the Investment Agreement or any other Loan
Document; (2) any and all sums advanced by the Trustee, IFC or
DEG in order to preserve the Collateral or preserve its
security interest in the Collateral or maintain in full force
and effect any Governmental Approval or any insurance policy
maintained by the Company, the EPC Contractor or the O&M
Operator in respect of the Project; (3) in the event of any
proceeding for the collection or enforcement of the Obligations
after an Event of Default shall have occurred and be
continuing, the expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing or realizing on
the Collateral, or of any exercise by the Trustee, IFC or DEG
of its rights under the Loan Documents, together with
reasonable attorneys' fees and court costs; and (4) the Hedging
Costs.

          "Offering Period" shall mean the thirty day (30)
period following the date of a Deficiency Notice.

          "Offshore Retention Account" shall mean the Offshore
Retention Account created pursuant to the Trust and Retention
Agreement, including all sub-accounts thereof.

          "Operations and Maintenance Agreement" shall mean the
Operations and Maintenance Agreement dated as of April 24,
1997, between the Company and the O&M Operator.

          "Operating and Maintenance Costs" shall mean costs
incurred by the Company or the O&M Operator, as applicable, for
maintaining and operating the Project (other than amounts in
respect of depreciation and other non-cash charges and major
scheduled maintenance to be paid for with funds on deposit in
the Maintenance Reserve Sub-Account), including costs of fuel,
water, utilities and labor, expenses incurred to maintain and
preserve the Project in good working order, expenses incurred
in maintaining insurance required by the Principal Documents,
Taxes, permitting fees, wheeling charges payable to NEA under
Section 2.3 of the PPA and general administrative expenses.

          "Operations and Maintenance Plan" shall mean the
Operations and Maintenance Plan for the Project, approved by
the Lenders and the Independent Engineer, detailing a major
replacement or maintenance schedule, training plan, rebuilding
plan, and plans for routine shutdowns, operations and interface
with NEA grid.

          "Operations and Maintenance Sub-Account" shall mean
the Operations and Maintenance Sub-Account created pursuant to
the Trust and Retention Agreement.

          "Owner's Engineer" shall mean Harza Engineering
Company International L.P., and, if and to the extent expressly
permitted under the Investment Agreement, its assignees.

          "Owner's Engineer Consent" shall mean the Consent and
Agreement dated as of the Closing Date, among the Owner's
Engineer, the Company, IFC, DEG and the Trustee.

          "Panda Bhote Koshi" shall mean Panda Bhote Koshi, an
exempted company with limited liability company organized and
existing under the laws of the Cayman Islands.

          "Panda Bhote Koshi Documents" shall mean all
documents pertaining to the equity funds for the Project,
including, without limitation, any shareholders' agreement,
consent, security agreement, legal opinion and other agreements
executed in connection therewith, all in form and substance
satisfactory to the Lenders.

          "Panda Energy International, Inc." shall mean Panda
Energy International, Inc., a corporation organized and
existing under the laws of the State of Texas.

          "Panda Global Energy" means Panda Global Energy
Company, a Cayman Islands exempted company.

          "Panda Global Energy Indenture" means the Trust
Indenture dated as of April 22, 1997, between Panda Global
Energy and Bankers Trust Company, as Trustee.

          "Panda Global Energy Officer's Certificate" means an
Officer's Certificate as defined in Appendix A to the Panda
Global Energy Indenture.

          "Panda Global Holdings" means Panda Global Holdings,
Inc., a Delaware corporation.

          "Panda Global Holdings Indenture" means the Trust
Indenture dated as of April 22, 1997, between Panda Global
Holdings and Bankers Trust Company, as Trustee.

          "Panda Global Holdings Officer's Certificate" means
an Officer's Certificate as defined in Appendix A to the Panda
Global Holdings Indenture.

          "Panda Guarantee Letter of Credit" shall mean the
irrevocable standby letter of credit, in form and substance
satisfactory to the Lenders, issued by an Approved Bank in
favor of the Trustee, as provided pursuant to Section 7.1(b) of
the Share Retention and Project Funds Agreement.

          "Panda Letter of Credit" shall mean the irrevocable
standby letter of credit, in form and substance satisfactory to
the Lenders, issued by an Approved Bank in favor of the
Trustee, as provided pursuant to Section 3.2(b) of the Share
Retention and Project Funds Agreement.

          "Panda of Nepal" shall mean Panda of Nepal, an
exempted company with limited liability organized and existing
under the laws of the Cayman Islands.

          "Panda of Nepal Consent" shall mean the Consent and
Agreement dated as of the Closing Date, among the Owner's
Engineer, Panda of Nepal, IFC, DEG and the Trustee.

          "Panda Projects" shall mean the Brandywine Facility,
the Rosemary Facility, the Luannan Facility (as such terms are
defined in the Panda Global Holdings Indenture) and the
Project.

          "Panda Project Completion Letter of Credit" shall
mean the irrevocable standby letter of credit, in form and
substance satisfactory to the Lenders, issued by an Approved
Bank in favor of the Trustee, as provided pursuant to Section
3.3(c)(iv) of the Share Retention and Project Funds Agreement.

          "Participant" means any Person who acquires a
Participation or, as the case may be, any successor or
permitted assignee of such Person under a Participation
Agreement.

          "Participation" means the investment of a Participant
in any of the Loans or, as the context may require, in any
applicable Disbursement.

          "Participation Agreement" means an agreement between
IFC and a Participant pursuant to which such Participant
acquires a Participation.

          "Payment Date" shall mean any Interest Payment Date
and/or Principal Payment Date.

          "Payment Requisition" shall mean a properly executed
requisition for the withdrawal and transfer of funds in the
Offshore Retention Account, in the form of Schedule A to the
Trust and Retention Agreement.

          "Performance Liquidated Damages" shall have the
meaning assigned thereto in the EPC Contract.

          "Performance Testing Guidelines" shall have the
meaning assigned thereto in the EPC Contract.

          "Performance Testing Procedures" shall have the
meaning assigned thereto in the EPC Contract.


          "Performance Tests" shall mean the tests required to
be performed pursuant to the EPC Contract to determine if the
Facility meets the Guaranteed Performance Levels and Minimum
Performance Levels (as such terms are defined in the EPC
Contract).

          "Permitted Indebtedness" shall mean (i) indebtedness
of the Company incurred under any of the Loan Documents or in
accordance with the Share Retention and Project Funds Agreement
and (ii) after the Commercial Operation Date, unsecured
short-term indebtedness (up to one year) for borrowed money in
an aggregate amount at any time equal to no more than
US$2,000,000, the payment of which does not have priority (by
law or otherwise) to payment of the Obligations.

          "Permitted Investments" shall mean any temporary
investment in Cash Equivalents by the Company of funds not
currently needed for Debt Service or Operating and Maintenance
Costs.

          "Permitted Lien" shall mean the creation, assumption,
incurrence or existence of (i) any statutory or other Lien for
Taxes not yet due, or for Taxes which are discharged within
thirty (30) days after the Company becomes aware of such Lien,
or any such Lien being contested in good faith by the Company
and for which the Company has posted security satisfactory to
the Lenders, provided that such Lien is satisfied, removed or
discharged within thirty (30) days after final adjudication;
(ii) Liens created pursuant to the Security Documents in favor
of the Lenders or a Person acting on behalf of the Lenders; and
(iii) Liens arising as a result of the acts or omissions of the
Trustee or Wilmington Trust Company.

          "Person" shall mean any individual, partnership,
joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any
agency, department or instrumentality thereof.

          "Plant" shall mean a run-of-the-river hydroelectric
power plant with a rated capacity of 36 MW (nominal net) to be
located in the Sindhupalchok District in Nepal, and constructed
pursuant to the Project Agreement and the EPC Contract.

          "Pledged Collateral" shall, with respect to any
Sponsor (other than Panda Energy International, Inc. and Harza
Engineering Company International, a limited liability
company), have the meaning provided in Article 1 of the Share
Pledge Agreement to which it is a party.

          "Pledged Shares" shall mean all Shares or other
shares, as the case may be, pledged under the Share Pledge
Agreement.

          "Post-petition Interest" shall mean interest payable
with respect to the Obligations from the date of entry of any
action, including, without limitation, the institution of any
action, suit or other proceeding under bankruptcy, insolvency
or similar laws of any jurisdiction in a Company bankruptcy,
until the date such interest is paid.

          "PPA" shall mean the Power Purchase Agreement, dated
as of 6 Shrawan 2053 (21 July 1996), between NEA and the
Company.

          "Principal Documents" shall mean the Loan Documents,
the Third Party Agreements, the Share Retention and Project
Funds Agreement, the Subscription Agreements, the Insurance
Consultancy Services Agreement, the Shareholders' Agreement,
the Intercreditor Agreement, the Panda Bhote Koshi Documents
and any agreements or other documents executed or delivered at
any time and from time to time in connection with any of the
foregoing.

          "Principal Payment Date" means March 15, 2001 and the
15th Day of each March and September thereafter through the
final Principal Payment Date, provided that if such date is not
a Business Day, the Principal Payment Date shall be the
Business Day determined in accordance with Section 3 of this
Schedule A.

          "Proceeds" shall mean Sales Proceeds, Liquidated
Damages Proceeds, Collateral Proceeds and Insurance Proceeds.

          "Project" shall mean the Plant, the Facility, the
Site, all auxiliary facilities, utilities and the sites thereof
and the construction, equipping, placing into operation and
operation of the Plant and such other facilities and utilities
and provision of working capital for the foregoing.

          "Project Agreement" shall mean the Project Agreement,
dated 6 Shrawan 2053 (21 July 1996), between HMGN and the
Company.

          "Project Completion" shall mean that the following
requirements have been met in full:

               (i)  The Company shall have delivered to each of
          the Lenders, the Trustee and the Independent
          Engineer:

                         (A)  a Company Completion Certificate,
               signed by an Authorized Officer of the Company
               (together with all relevant supporting
               documentation), together with

                         (B)  a certificate, signed by an
               Authorized Officer of the Company, stating the
               following:

                                   (I)  There exist no Liens on
                    the Project relating to any of the
                    Construction Contractors' or other
                    contractors' work or equipment;

                                   (II) All Governmental
                    Approvals required for the operation of the
                    Project have been obtained, are in full
                    force and effect and, other than with
                    respect to inconsequential Governmental
                    Approvals, are not subject to appeal by or
                    to any Governmental Authority;

                                   (III)     (y) The Project is
                    in compliance with the EMMP and (z) the
                    Company has implemented the approved HSE
                    Plan;

                                   (IV) No Default or Event of
                    Default exists under any Principal
                    Document;

                                   (V)  There are no actions,
                    suits, or proceedings pending with respect
                    to the Company, the O&M Operator (other
                    than any actions, suits or proceedings
                    which are unrelated to the Project), the
                    EPC Contractor (other than any actions,
                    suits or proceedings which are unrelated to
                    the Project), the Owner's Engineer (other
                    than any actions, suits or proceedings
                    which are unrelated to the Project) or the
                    Project, including, without limitation,
                    with respect to any Principal Document
                    (other than any Non-Material Agreement), or
                    the transactions contemplated thereby or
                    with respect to or affecting any
                    Governmental Approval;

                                   (VI) The NEA Letter of
                    Credit is in full force and effect and in
                    form and substance previously approved by
                    the Lenders, and the Lenders have received
                    satisfactory evidence of the assignment of
                    the NEA Letter of Credit to the Lenders,
                    together with accompanying documentation in
                    connection therewith as is acceptable in
                    form and substance to the Lenders;

                                   (VII)     The Operations and
                    Maintenance Plan and Facility Procedures
                    Manual approved by the Lenders have been
                    adopted and implemented;

                                   (VIII)    In the event
                    Insurance Proceeds theretofore received
                    exceed US$5 million, the Company, if the
                    Lenders have so directed, will have applied
                    such Insurance Proceeds to prepay the
                    Loans;

                                   (IX) NEA has accepted the
                    Commercial Operation Date pursuant to the
                    PPA;

                                   (X)  The NEA Interconnection
                    Facilities have been installed in
                    accordance with Article 7 of the PPA or,
                    there exists an alternative transmission
                    line and related facilities or other means
                    of evacuating power (provided, however,
                    that such alternative transmission line and
                    related facilities or other means of
                    evacuating power must in all cases be
                    satisfactory to the Lenders in their sole
                    and absolute discretion);

                                   (XI) The Company has
                    implemented a system to mitigate against
                    the potential effects of a GLOF, including
                    implementing a GLOF early warning system;

                                   (XII)     The Company has
                    delivered to each of the Lenders (x)
                    certified copies of certificates of title
                    and Leases evidencing that the Company has
                    acquired, in a manner satisfactory to the
                    Lenders, all necessary rights to the Site
                    and all other rights necessary for the
                    present and proposed conduct of its
                    business and the carrying out of the
                    Project (including water and other items
                    described in the Project Agreement), free
                    and clear of all Liens and encumbrances
                    (except for Permitted Liens) and (y)
                    evidence that all payments required to be
                    made during the entire term of the Leases
                    have been made;

                                   (XIII)    The EPC Warranty
                    Performance Guarantee is in full force and
                    effect;

                                   (XIV)     There are no
                    material disputes pending between the
                    Company and any other party to a Principal
                    Document;

                                   (XV) NEA has met all of its
                    material obligations of any kind under the
                    PPA to be performed on or before the
                    Project Completion Date;

                                   (XVI)     HMGN has met all
                    of its material obligations of any kind
                    under the Project Agreement to be performed
                    on or before the Project Completion Date;

                                   (XVII) No Material Adverse
                    Change has occurred and is continuing, and
                    no Force Majeure Event has occurred and the
                    effect of which Force Majeure Event has not
                    been cured to the Lenders' satisfaction;
                    and

                                   (XVIII)The Company's Debt
                    Service Coverage Ratio complies with the
                    provisions of Section 5.6(i) of the General
                    Conditions;

               (ii) The Company shall have delivered to each of
          the Lenders an opinion of legal counsel, dated as of
          the Project Completion Date, with respect to the
          matters specified in this subsection (B)(I) and
          (B)(II);

               (iii)     In the event of a Capacity Shortfall,
          the prepayment of the Loans has been made in
          accordance with the Investment Agreement;

               (iv) The Independent Engineer shall have
          delivered to each of the Lenders, the Trustee and the
          Company an Independent Engineer's Certificate (with a
          copy to the Company);

               (v)  The Lenders shall have determined in their
          good faith judgment that the foregoing requirements
          have been met and that the contents of the Company
          Completion Certificate and the certificate described
          in subsection (i)(B) above are true and shall have
          executed and delivered to the Company and the Trustee
          a Lender Completion Notice; and

               (vi) The Debt Service Reserve Sub-Account shall
          contain funds equal to the next six (6) months of
          Debt Service.

All defined terms used in such certificate shall have the
meanings set forth in the Investment Agreement.

          "Project Completion Date" shall mean the date on
which the requirements for Project Completion have been met in
full.

          "Project Completion Test" shall mean the carrying out
of all commissioning tests described in the EPC Contract shall
have been performed in accordance with the EPC Contract to the
satisfaction of the Independent Engineer and the Lenders on
each generating unit individually and on the total Plant.

          "Project Costs" shall mean the costs incurred in
connection with the Project set forth in Schedule 2.2(b) to
each of the IFC Special Conditions and the DEG Special
Conditions.

          "Project Funds Shortfall" shall mean, at any point in
time on or before the Project Completion Date, in the
reasonable judgment of either Lender, the amount by which
Project Costs or principal, interest, fees and other amounts
payable under the Loan Documents exceed funds then available to
the Company from the sources described in the Financing Plan or
the EPC Contract or from other sources (on terms and subject to
conditions acceptable to the Lenders).  For the avoidance of
doubt, funds, including, without limitation, Insurance Proceeds
and Liquidated Damages Proceeds, shall not be deemed available
to the Company until such funds have been received by the
Company.

          "Project Licenses" shall mean the licenses to be
issued by HMGN as described in Section 3.1 of the Project
Agreement.

          "Prudent Utility Practices" shall have the meaning
provided in Section 1.1 of the PPA.

          "PUHCA" shall mean the U.S. Public Utility Holding
Company Act of 1935.

          "Purchase Date" shall have the meaning assigned
thereto in the Project Agreement.

          "Purchase Notice" shall have the meaning assigned
thereto in the Project Agreement.

          "Purchase Price" shall have the meaning assigned
thereto in the Project Agreement.

          "Quarter" means each calendar quarter.

          "Quarterly Financial Statements" shall mean, with
respect to the Company, the EPC Contractor, the O&M Operator
and each Sponsor, as the case may be, its quarterly
consolidated and unconsolidated balance sheets and statements
of profit and loss and cash flows for such quarterly reporting
period, together with comparable figures for the corresponding
quarterly reporting period of the previous fiscal year, each
prepared in accordance with U.S. GAAP (other than with respect
to Himal International Power Corporation Pvt. Ltd., which such
statements shall be in accordance with Nepalese accounting
principles and with respect to the EPC Contractor, which such
statements shall be in the form prepared and maintained by the
EPC Contractor in the ordinary course).

          "Rate Setting Date" means, with regard to each
Tranche, the date referred to in Section 3.2(b) of the IFC
Special Conditions.

          "RDC of Nepal" shall mean RDC of Nepal, an exempted
company with limited liability organized and existing under the
laws of the Cayman Islands.

          "Real Estate Documents" shall mean the Mortgage, the
Leases, the real property ownership deeds and the land
ownership certificates in respect of the plots of land set
forth on Exhibit A to the Mortgage.

          "Repatriation and Remittance Approvals" shall mean
all requisite foreign exchange control approvals and other
Governmental Approvals, if any, from HMGN or any department or
agency thereof, or from Nepal Rastra Bank, including the
authorization for opening a bank account outside Nepal,
necessary to assure the availability of U.S. Dollars to the
Company to enable the Company to perform all of its obligations
under the Loan Documents or any of the other Principal
Documents in accordance with their respective terms.

          "Request for Payment" shall have the meaning assigned
thereto in the EPC Contract.

          "Required Commercial Operation Date" shall have the
meaning assigned thereto in the PPA.

          "Resettlement Plan" shall mean the Resettlement Plan
of the Company dated as of March 30, 1997.

          "Resource Development Consultants, a limited
liability company" shall mean Resource Development Consultants,
a limited liability company, a limited liability company
organized and existing under the laws of the State of Wyoming.

          "Revenue Sub-Account" shall mean the Revenue
Sub-Account created pursuant to the Trust and Retention
Agreement.

          "Risk Management Facility Agreement" shall mean the
Risk Management Facility Agreement dated as of the Closing Date
between the Company and IFC relating to Hedging Transactions
between the Company and IFC.

          "Rupees" or "Rs." shall each mean freely transferable
lawful money of Nepal.

          "Sales" shall mean all sales by the Company of
electricity to NEA, or any other Person, under the PPA or
otherwise.

          "Sales Proceeds" shall mean all monies due and to
become due to the Company from all Sales and shall include,
without limitation, all accounts, contract rights, all rights
and benefits whatsoever accruing to it under the PPA and
including without limitation, all rights to, and rights to
collect, proceeds due in connection with the sale of
electricity under the PPA.

          "Scheduled Commercial Operation Date" shall have the
meaning assigned thereto in the PPA.

          "Scheduled Synchronization Date" shall have the
meaning assigned thereto in the PPA.

          "Second Unit Delivery" shall have the meaning
assigned thereto in the EPC Contract.

          "Security" shall mean (a) the Security Documents,
(b) the power or powers of attorney provided for in any of the
Security Documents, (c) the benefits and/or assignment of
benefits under all insurance policies relating to the Project,
(d) all rights, powers and remedies of the Trustee or the Agent
or each of the Lenders under the Loan Documents or the Security
Documents as well as such other security, liens, rights, powers
and remedies as may be created or granted by the Company, the
Sponsors, the EPC Contractor, the O&M Operator, the Owner's
Engineer or any other Person in favor of the Trustee or the
Agent for the benefit of or in favor of the Lenders, at a later
date under any other agreement with the Company, the Sponsors,
or the EPC Contractor, the O&M Operator, the Owner's Engineer
or such Person; together with the rights, benefits and remedies
of the Trustee and the Lenders inherent thereto or provided for
herein or therein.

          "Security Agreement and Assignment" shall mean the
Security Agreement and Assignment, dated as of the Closing
Date, among the Company, IFC, DEG and the Trustee.

          "Security Documents" shall mean the Trust and
Retention Agreement, the Nepal Agency and Retention Agreement,
the Mortgage, the Security Agreement and Assignment, the Share
Pledge Agreement, the NEA Letter of Credit, the Equity Letters
of Credit, the EPC Performance Guarantees, the Panda Letter of
Credit, the Panda Project Completion Letter of Credit, the
Assignment Agreement, the Deed of Assignment of Reinsurance,
the Real Estate Documents, the Consents and the Hedging
Documents and any agreements or other documents executed or
delivered at any time or from time to time in connection with
any of the foregoing.

          "Senior Secured Notes" means the Senior Secured
Notes as defined in Appendix A to the Panda Global Energy
Indenture.

          "Services Agreements" shall mean (i) the Amended and
Restated Services Agreement dated July 11, 1997, between Panda
of Nepal and Harza Engineering Company International, L.P., as
amended by that certain Amendment No. 1 dated December 5, 1997,
for services provided outside Nepal and (ii) the Amended and
Restated Services Agreement dated July 11, 1997, between the
Company and Harza Engineering Company International, L.P., for
services provided inside Nepal.

          "Shareholders' Agreement" shall mean the
Shareholders' Agreement, dated as of the Closing Date, among
the Company, Himal International Power Corporation Pvt. Ltd.,
Panda of Nepal, RDC of Nepal and IFC.

          "Share Pledge Agreement" shall mean the Share Pledge
Agreements, each dated as of the Closing Date, among each
Sponsor (other than Panda Energy International, Inc. and Harza
Engineering Company International, a limited liability
company), as Pledgor, the Trustee, as Pledgee, and the Company.

          "Share Retention and Project Funds Agreement" shall
mean the Share Retention and Project Funds Agreement, dated as
of the Closing Date, among the Company, the Sponsors, IFC and
DEG.

          "Shares" shall mean ordinary shares of the Company
issued and outstanding from time to time.

          "Short-term Debt" shall mean, at any date, all
Indebtedness of the Company other than Long-term Debt.

          "Site" shall mean the real property and related
rights described on Schedule 3.1(e) of the General Conditions.

          "Soaltee Enterprises Private Ltd." shall mean Soaltee
Enterprises Private Ltd., a private company organized and
existing under the laws of Nepal.

          "Soaltee Hotel Ltd." shall mean Soaltee Hotel Ltd., a
public company organized and existing under the laws of Nepal.

          "Special Buyout Event" shall have the meaning set
forth in the definition section of the Project Agreement.

          "Special Conditions" shall have the meaning assigned
thereto in the Investment Agreement.

          "Sponsor Share" shall have the meaning assigned
thereto in Section 3.2 of the Share Retention and Project Funds
Agreement.

          "Sponsor Shareholders" shall mean Panda of Nepal, RDC
of Nepal and Himal International Power Corporation Pvt. Ltd.

          "Sponsors" shall mean Panda Energy International,
Inc., Harza Engineering Company International, a limited
liability company, Harza Engineering Company International
L.P., Himal International Power Corporation Pvt. Ltd., Soaltee
Enterprises Private Ltd., Soaltee Hotel Ltd., Surya Enterprises
Private Ltd., Panda Bhote Koshi, Resource Development
Consultants, a limited liability company, Panda of Nepal and
RDC of Nepal and "Sponsors" shall mean any of the Sponsors.

          "Subscribed Shares" shall mean the number of Shares
that each Sponsor has agreed to purchase pursuant to Section
2.1(a) of its Subscription Agreement.

          "Subscription Agreements" shall mean (i) the Equity
Subscription Agreement dated as of the Closing Date, among the
Company, Panda of Nepal and the Trustee; (ii) the Equity
Subscription Agreement dated as of the Closing Date, among the
Company, RDC of Nepal and the Trustee; and (iii) the Equity
Subscription Agreement dated as of the Closing Date, between
the Company, Himal International Power Corporation Pvt. Ltd.
and the Trustee.

          "Subscription Amount" shall mean the total commitment
of a Sponsor Shareholder's Subscribed Shares, as set forth in
Section 2.1(a)(i) of the Sponsor Shareholder's Subscription
Agreement.

          "Subscription Amount Payment" shall mean a payment by
a Sponsor Shareholder of the Sponsor Shareholder's Subscription
Amount or any part thereof.

          "Substantial Subcontractors" shall have the meaning
assigned thereto in the EPC Contract.

          "Substantial Vendors" shall have the meaning assigned
thereto in the EPC Contract.

          "Supplies and Raw Materials" shall mean all fuel,
materials, stores, spare parts and supplies and other personal
property which are consumable (otherwise than by ordinary wear
and tear) in the operation of the business of, or in the
production of power by, the Company at the Project.

          "Surya Enterprises Private Ltd." shall mean Surya
Enterprises Private Ltd., a private company organized and
existing under the laws of Nepal.

          "Taxes" shall mean any taxes (including income
taxes), levies, imposts, duties or other charges, of whatsoever
nature, imposed by HMGN or any other Governmental Authority
(including without limitation Governmental Authorities outside
of Nepal) or any political subdivision or taxing authority
thereof.

          "Ten Year Anniversary" shall mean the tenth
anniversary of the Commercial Operation Date.

          "Termination Date" shall have the meaning assigned
thereto in Section 2.1(a) of the Share Retention and Project
Funds Agreement.

          "Third Party Agreements" shall mean the Project
Agreement, the PPA, the Services Agreements, the NEA Letter of
Credit, the Equity Letters of Credit, the EPC Contract, the EPC
Performance Guarantees, the Panda Letter of Credit, the Panda
Project Completion Letter of Credit, the Operations and
Maintenance Agreement, the Independent Engineer's Agreement,
and any other agreement to which the Company is a party
executed after the date hereof.

          "Tranche" means the amount of each A Loan
Disbursement outstanding from time to time.

          "Tranche Interest Rate" means, for each Tranche, a
rate of interest equal to the aggregate of:

               (i)  the Spread; and

                    (ii) the weighted average of the Fixed Rate
               Swap Equivalents for the respective maturity
               amounts of the relevant Tranche (i.e. the
               amounts of the relevant Disbursement allocated
               for repayment on the respective repayment dates
               in accordance with Section 3.6(c) of the IFC
               Special Conditions), with the weighting being
               based on the relevant amounts and their
               respective maturities and the average being
               rounded up to the nearest two decimal places,
               using the methodology set out in Annex A
               attached to the IFC Special Conditions.

          "Transfer" shall mean any sale, transfer, assignment,
pledge, or other disposition of, or encumbrance or existence of
any Lien on, any Share.

          "Trust and Retention Agreement" shall mean the Trust
and Retention Agreement, dated as of the Closing Date, among
the Company, IFC, DEG and Wilmington Trust Company.

          "Trustee" shall mean Wilmington Trust Company, not in
its individual capacity but solely as Trustee under the Trust
and Retention Agreement, or any successors thereto under the
Trust and Retention Agreement.

          "Unit Delivery Date" shall have the meaning assigned
thereto in the PPA.

          "United States" or "US" shall mean the United States
of America.

          "U.S. GAAP" means generally accepted accounting
principles in the United States of America in effect from time
to time, applied on a consistent basis both as to
classification of items and amounts.

          "World Bank" shall mean the International Bank for
Reconstruction and Development, an international organization
organized and existing by virtue of the Articles of Agreement
among its member countries.

          2.   Principles of Construction.

          (a)  The meanings set forth for defined terms in this
Schedule A or in any Loan Document shall be equally applicable
to both the singular and plural forms of the terms defined.

          (b)  All references in any Loan Document to clauses,
Articles, Sections, Schedules and Exhibits are to clauses,
Articles, Sections, Schedules and Exhibits in or to such Loan
Document unless otherwise specified therein.  The words
"hereof," "herein" and "hereunder" and words of similar import
when used in a Loan Document shall refer to such Loan Document
as a whole and not to any particular provision of such Loan
Document.

          (c)  All accounting terms not specifically defined in
a Loan Document shall be construed in accordance with U.S.
GAAP.

          (d)  References in any Loan Document to any law,
statute, decree or regulation shall be construed as a reference
to such statute, law, decree or regulation as reenacted,
redesigned, as amended or extended from time to time, except to
the extent otherwise provided, and references in any Loan
Document to any document or agreement shall be construed as a
reference to such document or agreement as amended, varied,
supplemented or replaced from time to time.

          (e)  "Including" shall be deemed to mean "including,
without limitation".

          (f)  If any amount to be determined or measured
pursuant to any of the Loan Documents relates to a transaction
in a currency other than Dollars, such determination shall be
made by converting such currency by reference to the prevailing
buying spot market rate of exchange on the date of such
transaction.

          (g)  References to any Person or Persons shall be
construed as a reference to any permitted successors or assigns
of such Person or Persons.

          3.   Business Day Adjustment.  Where the day on or by
which a payment is due to be made is not a Business Day, that
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 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.


Schedules

A-1  Form of EPC Performance Guarantee

A-2  Form of Equity Letter of Credit