EXHIBIT NO. 10.152.01

                     GUARANTEE AGREEMENT


          THIS GUARANTEE AGREEMENT (this "Agreement"), is
executed as of December 18, 1997.

          WHEREAS, MCNIC Nepal Limited, a Cayman Islands
exempted company ("MCNIC Nepal") is a wholly-owned
subsidiary of MCN Investment Corporation, a Michigan
corporation (MCNIC); and

          WHEREAS, simultaneously with the execution hereof,
MCNIC Nepal, Panda Bhote Koshi, a Cayman Islands exempted
company (the "Company"), Panda Global Energy Company, a
Cayman Islands exempted company ("Panda Global"), and Panda
of Nepal, a Cayman Islands exempted company ("Panda of
Nepal") will enter into a Shareholders Agreement dated as of
December 18, 1997 (the "Shareholders Agreement") in which
MCNIC Nepal and Panda Global agree to purchase all of the
Shares in the Company; and

          WHEREAS, MCNIC desires to enter into this
Agreement in order to assist MCNIC Nepal in its purchase of
certain Shares of the Company; and

          NOW, THEREFORE, in order to assist MCNIC Nepal in
purchasing certain shares of the Company, MCNIC hereby
covenants and agrees as follows:

          Section 1.  DEFINITIONS.  Capitalized terms used
and not otherwise defined in this Agreement have the
meanings given to those terms in the Shareholders Agreement.
Notwithstanding the foregoing, when used in this Agreement
the term "Obligations" shall mean all of the obligations and
liabilities of the Class B Shareholder under the
Shareholders Agreement as the same may from time to time be
amended, modified, substituted, extended or renewed
(including but not limited to any liabilities arising from
inaccurate representations and warranties and
indemnification obligations).

          Section 2.  GUARANTEE  Subject to the provisions
hereof, MCNIC hereby irrevocably and unconditionally
guarantees to the Class A Shareholder and Panda Energy
International, Inc., a Texas corporation ("PEII") the
performance by MCNIC Nepal of any and all of its Obligations
as the Class B Shareholder under, and the payment in full of
all liabilities of MCNIC Nepal to PEII or Panda Global
arising under, the Shareholders Agreement in accordance with
the terms thereof.  In the event of a Transfer of the Class
B Shares to a Permitted Transferee, this Guarantee shall
extend to all of the Obligations of such Permitted
Transferee, and all references herein to "MCNIC Nepal" shall
mean and include any Permitted Transferee.

          Section 3.  ABSOLUTE, UNCONDITIONAL AND CONTINUING
OBLIGATION.

     (a)  This Agreement is an absolute, unconditional and
continuing agreement of MCNIC to perform or pay each and
every Obligation irrespective of (i) the validity, legality,
genuineness, regularity or enforceability of the Obligations
or any other agreement or instrument relating thereto,
(ii) the bankruptcy or insolvency of MCNIC Nepal or the
dissolution or liquidation of MCNIC Nepal or the discharge
of MCNIC Nepal's obligations in bankruptcy, (iii) any law,
regulation or order now or hereafter in effect in any
jurisdiction affecting any of the terms of or rights of
MCNIC Nepal with respect to any such agreement, (iv) any
assignment, amendment, modification or termination of or any
change in the term, manner or place of payment of, or any
other term of, all or any part of the Obligations, or any
other agreement or instrument relating thereto, (v) any
exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to
departure from any guaranty, for all or any part of the
Obligations or any failure of any such collateral to satisfy
in full all the Obligations, (vi) any failure to pay any
taxes that may be payable with respect to the payment of
such obligation by MCNIC or MCNIC Nepal, or any failure to
obtain any authorization or approval from or other action
by, or to notify or file with, any government agency or
regulatory body required in connection with the payment of
such obligation by MCNIC or MCNIC Nepal, (vii)  any merger
or consolidation of MCNIC Nepal or MCNIC into or with any
other Person or any sale, lease or transfer of any of the
assets of MCNIC Nepal or MCNIC to any other Person, or any
change in the name, stock ownership, membership,
constitution or place of formation of MCNIC Nepal or MCNIC,
or any change of MCNIC Nepal or MCNIC into another form of
business entity, (viii) the termination of the legal
existence of MCNIC Nepal, or MCNIC, or the termination of
any legal obligation of MCNIC Nepal to discharge the
Obligations undertaken or purported to be undertaken by it
or on its behalf (other than to the extent of payment of the
Obligations by or on behalf of MCNIC Nepal), (ix) the
inability to recover any of the moneys included in the
Obligations in full from MCNIC Nepal by operation of law or
for any other reason, (x) any impossibility or
impracticality of performance, illegality, force majeure or
any action or nonaction of government, (xi) the transfer,
assignment, subletting or mortgaging or the purported
transfer, assignment, subletting or mortgaging of all or any
part of the interest of MCNIC Nepal, in any of the Project,
the Obligations, this Agreement or any other agreement or
instrument relating thereto, (xii) any failure, neglect or
omission on the part of MCNIC Nepal, the Class A
Shareholder, the Lenders or any other Person to give MCNIC
notice of the occurrence of any Default or Event of Default,
or to realize upon any obligation or liability of MCNIC
Nepal, or to provide for any insurance on the Project, or to
establish or maintain the priority or perfection of any
interest in the collateral, (xiii) any defect in the
compliance with specifications, conditions, design,
operation or fitness for use of, or any damage to or loss or
destruction of, or any interruption or cessation in the use
of the Project by any Person for any reason whatsoever
(including, without limitation, any governmental prohibition
or restriction, condemnation, requisition, seizure or any
other act on the part of any governmental or military
authority, or any act of God or the public enemy) regardless
of the duration thereof, or (xiv) any other circumstance
that might otherwise constitute a legal or equitable defense
available to or resulting in the discharge of a surety or
guarantor or any other circumstance, event or happening
whatsoever, whether foreseen or unforeseen and whether
similar or dissimilar to anything referred to above in this
Section 3(a).

     (b)  Notwithstanding anything to the contrary contained
herein, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment
of any of the Obligations by or on behalf of MCNIC Nepal or
MCNIC is rescinded or must otherwise be returned by any
Person upon the insolvency, bankruptcy or reorganization of
MCNIC Nepal, or MCNIC otherwise, all as though such payment
had not been made.  The obligations of MCNIC under this
Agreement shall not be subject to reduction, termination or
other impairment by reason of any set-off, recoupment,
counterclaim or defense or for any other reason, other than
to the extent of payments of the Obligations by or on behalf
of MCNIC Nepal.

     (c)  This Agreement shall be in addition to any other
guaranty or other security for the Obligations and shall not
be prejudiced or rendered unenforceable by the invalidity of
any such other guaranty or security.

     (d)  The obligations of MCNIC set forth herein
constitute the full recourse obligations of MCNIC
enforceable against it to the full extent of all its assets
and properties, notwithstanding any provision in the
Shareholders Agreement or any other agreement or instrument
relating thereto limiting the liability of MCNIC Nepal.

          Section 4.  SUBROGATION.  MCNIC agrees not to
exercise, and hereby waives, any right against MCNIC Nepal
for repayment of any amount hereunder that MCNIC may acquire
by way of subrogation under this Agreement, by any payment
hereunder or otherwise until the Obligations have been paid
in full.

          Section 5.  SETOFF AND COUNTERCLAIM.  MCNIC hereby
waives any defense of setoff or counterclaim against MCNIC
Nepal arising from or out of any agreement to which MCNIC
Nepal and MCNIC or any affiliate of MCNIC are parties.

          Section 6.  AMENDMENT AND ASSIGNMENT OF THIS
AGREEMENT.  No term or provision of this Agreement may be
amended, modified, altered, waived or supplemented except in
a writing signed by MCNIC and consented to in writing by the
Class A Shareholder and PEII.  MCNIC may not assign any of
its obligations and duties hereunder except with the prior
written consent of the Class A Shareholder and PEII (any
such consent shall not release MCNIC from any of its
obligations and duties hereunder).

          Section 7.  NO WAIVER; CONSENT.

     (a)  Except as to applicable statutes of limitation, no
delay of MCNIC Nepal in the exercise of, or failure to
exercise, any right hereunder or under any other agreement
shall operate as a waiver of such right, a waiver of any
other right or a release of MCNIC from any obligation
hereunder nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise
thereof or the exercise of any other right.

     (b)  MCNIC hereby consents to the renewal, compromise,
extension, acceleration or other changes in the time of
payment of or other changes in the terms of the Obligations,
or any part thereof or any changes or modifications to the
terms of the Shareholders Agreement.

          Section 8.  CONTINUING OBLIGATION.  The
obligations of MCNIC under this Agreement shall (i) continue
in full force and effect until the Obligations have been
indefeasibly settled in full in accordance with the terms of
the Shareholders Agreement, (ii) be binding on MCNIC, its
permitted successors and assigns and (iii) inure to the
benefit of and be enforceable by PEII and the Class A
Shareholder and their respective transferees, successors and
assigns.

          Section 9.  COSTS OF ENFORCEMENT.  MCNIC agrees to
pay any and all reasonable costs and expenses of the Class A
Shareholder and PEII (including the reasonable fees and
disbursements of legal counsel) incurred in enforcing any
right under this Agreement.

          Section 10.  NOTICE.  Any notice, request,
instruction, correspondence or other document to be given
hereunder by any party to another (herein collectively
called "Notice") shall be in writing and delivered
personally or by a nationally recognized overnight courier
service or mailed by registered mail, postage prepaid and
return receipt requested, or by telegram or facsimile, as
follows:

          To MCNIC Nepal:

                         MCNIC Nepal Limited
                         c/o Maples and Calder
                         P.O. Box 309
                         Ugland House
                         South Church Street
                         Grand Cayman
                         Cayman Islands, B.W.I.
                         Attention:  Sharon Pierson

                         Facsimile:  (345) 949-8080

          To MCNIC:

                         MCN Investment Corporation
                         Office of the General Counsel
                         500 Griswold, 10th Floor
                         Detroit, Michigan  48226

                         Facsimile:  (313) 965-0009

          Notice given by personal delivery, courier service
or registered mail shall be effective upon actual receipt.
Notice given by telegram or facsimile shall be effective
upon actual receipt if received during the recipient's
normal business hours, or at the beginning of the
recipient's next business day after receipt if not received
during the recipient's normal business hours.  Any party may
change any address to which Notice is to be given to it by
giving notice as provided above of such change of address.

          Section 11.  MISCELLANEOUS.  THIS AGREEMENT SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-
1401 AND 5-1402 OF THE GENERAL OBLIGATION LAW OF THE STATE
OF NEW YORK).  This Agreement supersedes all prior
agreements and understandings relating to the subject matter
hereof.  The headings in this Agreement are for purposes of
reference only and shall not affect the meaning hereof.

          IN WITNESS WHEREOF, this Guarantee Agreement has
been executed by MCNIC through its duly authorized officer
as of the date first written above.

                          MCN INVESTMENT CORPORATION



                          By_______________________________
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