EXHIBIT NO. 10.157



              NEPAL AGENCY AND RETENTION AGREEMENT


                              among


            BHOTE KOSHI POWER COMPANY PRIVATE LIMITED


                INTERNATIONAL FINANCE CORPORATION


   DEG-DEUTSCHE INVESTITIONS-und ENTWICKLUNGSGESELLSCHAFT mbH


              WILMINGTON TRUST COMPANY, as Trustee,


                               and


                  NEPAL GRINDLAYS BANK LIMITED




                  Dated as of the Closing Date
                        TABLE OF CONTENTS



     ARTICLE 1
     DEFINITIONS AND PRINCIPLES OF CONSTRUCTION                       2

     ARTICLE 2
     APPOINTMENT OF AGENT
     ESTABLISHMENT OF THE TRUST AND THE NEPAL RETENTION ACCOUNT

          Section 2.1  Acceptance of Appointment of Agent             2
          Section 2.2  Establishment of Nepal Retention Account       2
          Section 2.3  Security Interest in the Nepal
                       Retention Account                              4
          Section 2.4  Establishment of the Nepal Holding Account     4
          Section 2.5  Rupee Deposits                                 4

          ARTICLE 3
          DEPOSITS INTO THE NEPAL RETENTION ACCOUNT

          Section 3.1  Nepal Retention Account Deposits                5
          Section 3.2  Sub-Account Deposits                            5

     ARTICLE 4
     WITHDRAWALS FROM ACCOUNTS AND FUNDING REQUIREMENTS

          Section 4.1  Mandatory Withdrawals                           7
          Section 4.2  Nepal Operations and Maintenance
                       Sub-Account Withdrawals                         8
          Section 4.3  Nepal Dollar Sub-Account                        8
          Section 4.4  No other Rights of Withdrawal                   8

     ARTICLE 5
     REMEDIES ON DEFAULT

          Section 5.1  Action by the Agent                              8

     ARTICLE 6
     THE AGENT

          Section 6.1  Appointment of Agent; Powers and Immunities      8
          Section 6.2  Reliance by Agent                                9
          Section 6.3  Resignation or Removal of Agent                  9
          Section 6.4  Court Orders                                     9

     ARTICLE 7
     EXPENSES;  INDEMNIFICATION; FEES

          Section 7.1  Expenses                                         9
          Section 7.2  Indemnification                                 10
          Section 7.3  Fees                                            10

     ARTICLE 8
     SATISFACTION AND DISCHARGE OF TRUST

          Section 8.1  Satisfaction and Discharge of Trust            10

     ARTICLE 9
     PARTICULAR COVENANTS

          Section 9.1  Reporting Requirements                         11
          Section 9.2  Nepal Payment Requisitions, Etc.               11
          Section 9.3  Other Notices                                  12
          Section 9.4  Business Days                                  12


     ARTICLE 10
     REPRESENTATIONS AND WARRANTIES

          Section 10.1  Representations and Warranties of the
                        Company                                       12
          Section 10.2  Representations and Warranties of Nepal
                        Grindlays Bank Limited                        13

          ARTICLE 11
          MISCELLANEOUS PROVISIONS

          Section 11.1  Successors or Assigns                         14
          Section 11.2  Notices                                       14
          Section 11.3  Counterparts                                  15
          Section 11.4  Governing Law; Dispute Resolution             15
          Section 11.5  No Waiver; Cumulative Remedies                17
          Section 11.6  Severability                                  17
          Section 11.7  Communications                                17
          Section 11.8  Amendments                                    17
          Section 11.9  Concerning the Trustee                        17

SCHEDULE A
          FORM OF NEPAL PAYMENT REQUISITION                          A-1

SCHEDULE B
          FORM OF NEPAL DEPOSIT CERTIFICATE                          B-1

SCHEDULE C
          PROCEDURE FOR CONVERSION OF RUPEES TO DOLLARS              C-1

SCHEDULE D
          FEE SCHEDULE                                               D-1



              NEPAL AGENCY AND RETENTION AGREEMENT


      NEPAL  AGENCY  AND RETENTION AGREEMENT,  dated  as  of  the
Closing  Date (this "Agreement"), among BHOTE KOSHI POWER COMPANY
PRIVATE  LIMITED, a private limited liability company  registered
under   the   Nepalese   Company  Act,  2021   (the   "Company"),
INTERNATIONAL FINANCE CORPORATION, an international  organization
organized  and  existing by virtue of the Articles  of  Agreement
among its member countries ("IFC"), DEG-DEUTSCHE INVESTITIONS-und
ENTWICKLUNGSGESELLSCHAFT mbH, a company  organized  and  existing
under  the  laws of the Federal Republic of Germany ("DEG")  (IFC
and  DEG  hereinafter  being  collectively  referred  to  as  the
"Lenders"  and  individually  as a  "Lender"),  WILMINGTON  TRUST
COMPANY,  a  Delaware banking corporation, not in its  individual
capacity  but  solely  as Trustee under the Trust  and  Retention
Agreement,  as Trustee (the "Trustee"), and NEPAL GRINDLAYS  BANK
LIMITED,  a  commercial bank of Nepal, as agent for  the  Trustee
(the "Agent").



                     PRELIMINARY STATEMENTS

      The  Company has been granted the right to build,  own  and
operate  a 36 MW (nominal net) hydroelectric power plant  in  the
Sindhupalchok District in Nepal.

     IFC is willing to provide financing for the Project pursuant
to the terms of that certain IFC Investment Agreement dated as of
the   Closing  Date,  between  the  Company  and  IFC  (the  "IFC
Investment Agreement").

     DEG is willing to provide financing for the Project pursuant
to the terms of that certain DEG Investment Agreement dated as of
the   Closing  Date,  between  the  Company  and  DEG  (the  "DEG
Investment Agreement").

      The  Company,  IFC and DEG have entered into  that  certain
Investment  Agreement General Conditions dated as of the  Closing
Date (the "General Conditions").

      The Company has granted to the Trustee, for the benefit  of
the  Lenders, a security interest in all of the Company's assets,
including the accounts created in accordance with this Agreement.
The  Trustee desires to appoint Nepal Grindlays Bank  Limited  to
act  as  its agent hereunder to hold and administer such accounts
and  protect  the  interests of the Trustee  therein,  and  Nepal
Grindlays  Bank  Limited desires to act as  the  Trustee's  agent
pursuant to this Agreement.

      It  is a condition precedent to the obligations of each  of
IFC  and  DEG under the Investment Agreement that this  Agreement
shall have been entered into by the parties hereto.

                 NOW, THEREFORE, IT IS AGREED:


                           ARTICLE 1

           DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

      For  all purposes of this Agreement, (i) capitalized  terms
not otherwise defined herein shall have the meanings set forth in
Schedule  A to the General Conditions and (ii) the principles  of
construction  set  forth in Schedule A to the General  Conditions
shall apply.


                           ARTICLE 2

                      APPOINTMENT OF AGENT
   ESTABLISHMENT OF THE TRUST AND THE NEPAL RETENTION ACCOUNT

     Section 2.1  Acceptance of Appointment of Agent.

      (a)   Nepal Grindlays Bank Limited hereby agrees to act  as
the  Agent  hereunder, in accordance with  the  terms  set  forth
herein,  and  to  accept  all cash, payments  and  other  amounts
delivered to or held by the Agent pursuant to the terms  of  this
Agreement.   The  Agent  shall  hold  and  safeguard  the   Nepal
Retention Account during the term of this Agreement and, as agent
of  the  Trustee,  shall treat the funds in the  Nepal  Retention
Account  as funds owned and pledged by the Company to the Lenders
or  to the Trustee for the benefit of the Lenders pursuant to the
Security  Documents, to be held in the custody of the  Agent,  as
agent  of the Trustee, as trustee solely for the benefit  of  the
Lenders,  in  trust  in accordance with the  provisions  of  this
Agreement and the Trust and Retention Agreement.

      (b)   Neither the Company nor any Affiliate of the  Company
shall  have  any  rights  against  the  Agent  or  its  officers,
employees, agents or representatives hereunder (other than rights
which  may arise against Nepal Grindlays Bank Limited as a result
of  its  or  the  Agent's gross negligence (or, in  the  case  of
handling  of  funds by the Agent, simple negligence)  or  willful
misconduct,  or  a  breach of its covenant set forth  in  Section
2.2(f) hereof, or a material inaccuracy of any representation and
warranty  set  forth in Section 10.2 hereof), including,  without
limitation,  any  right  to direct the  Agent  to  distribute  or
allocate  any  funds  in the Nepal Retention Account,  except  as
otherwise  provided elsewhere in this Agreement  and  except  for
funds in the Nepal Holding Account.

     Section 2.2  Establishment of Nepal Retention Account.

      (a)   The Agent hereby establishes in the Company's name  a
special,   segregated   and  irrevocable  cash   account   (which
constitutes  security for the benefit of the  Lenders)  with  the
Agent  at  its  office in Kathmandu, Nepal entitled "Bhote  Koshi
Power  Company  Private  Limited Nepal  Retention  Account"  (the
"Nepal Retention Account") (Account Number 1010215481001) and the
following sub-accounts:

                       (i)   a sub-account entitled "Bhote  Koshi
                 Power  Company Private Limited Nepal  Operations
                 and  Maintenance  Sub-Account"  (Account  Number
                 1010215481002)   (the  "Nepal   Operations   and
                 Maintenance Sub-Account");

                       (ii)  a sub-account entitled "Bhote  Koshi
                 Power Company Private Limited Nepal Reserve Sub-
                 Account"  (Account  Number  1010215481003)  (the
                 "Nepal Reserve Sub-Account");

                       (iii)      a  sub-account entitled  "Bhote
                 Koshi   Power  Company  Private  Limited  Dollar
                 Account"  (Account  Number  1010215481051)  (the
                 "Nepal  Dollar Sub-Account") which  shall  be  a
                 Dollar-denominated account); and

                       (iv)  a sub-account entitled "Bhote  Koshi
                 Power  Company Private Limited Nepal Petty  Cash
                 Sub-Account"   (Account  Number   1010215481004)
                 (the "Nepal Petty Cash Sub-Account").

      (b)   All  right, title and interest in and  to  the  Nepal
Retention  Account  and the funds in the Nepal Retention  Account
shall  be vested in the Agent, as agent of the Trustee,  for  the
benefit  of  the  Lenders and, upon (i) payment in  full  of  all
Obligations owing to each of the Lenders and termination  of  all
obligations of each of the Lenders under the Loan Documents,  and
(ii)  a  period of one hundred twenty (120) days (or  such  other
period as may be applicable with respect to preference or similar
periods under applicable bankruptcy, insolvency or similar  laws)
has  elapsed  since  the  condition set  out  in  clause  (i)  is
satisfied  without  any court determining  that  the  Company  is
insolvent or, if such determination is made within that time, the
Lenders are reasonably satisfied that no payment made to each  of
the Lenders or the Trustee by the Company will be set aside as  a
consequence   thereof  under  any  law  relating  to  bankruptcy,
insolvency  or similar matters, for the benefit of  the  Company.
Amounts deposited in the Nepal Retention Account shall be applied
by the Agent as provided in this Agreement.

      (c)   The Agent shall deposit all amounts received  by  the
Agent in Rupees in respect of the Company or the Project into the
Nepal  Retention  Account on the day such amounts  are  received.
Further,  the  Agent shall deposit all amounts  received  by  the
Agent in Rupees by way of transfer to the Agent from the Offshore
Retention  Account  (after conversion of Dollars  so  transferred
into Rupees at the prevailing market rate), unless instructed  by
the  Trustee  to deposit the same in Dollars in the Nepal  Dollar
Sub-Account,  into the Nepal Retention Account on  the  day  such
amounts are received.  Subject to Section 3.2 hereof, all  Rupees
in  the Nepal Retention Account shall, to the extent possible, be
invested  in  the  name  of the Agent in  such  Cash  Equivalents
denominated in Rupees as the Company directs in writing.  Subject
to  Section  3.2  hereof, all Dollars in the  Nepal  Dollar  Sub-
Account shall, to the extent possible, be invested in the name of
the  Agent in such Cash Equivalents denominated in Dollars as the
Company  directs in writing.  Failing such direction  or  in  the
event  the  Agent shall be unable to invest any or  all  of  such
monies  in  such  Cash Equivalents, the Agent shall  invest  such
monies  daily  on  an overnight basis in accordance  with  normal
business practices of the Agent and standing instructions  to  be
delivered  to  the  Agent  by  the Trustee  from  time  to  time.
Interest  and  other income gained or earned in  respect  of  any
monies  deposited  in any sub-account shall be deposited  in  the
same sub-account.

     (d)  The Agent shall (i) within five (5) Business Days after
receipt of written request by the Trustee, the Company or  either
of  the  Lenders, provide the Trustee, the Company or such Lender
with  such information as the Trustee, the Company or such Lender
may  specify  regarding all Cash Equivalents (including,  without
limitation, categories, amounts, maturities and issuers) and  any
other investments made by the Agent pursuant hereto and (ii) upon
the  written  request and at the expense of the Company,  arrange
with  the  Company for a mutually convenient time for a financial
officer or an authorized representative of the Auditors to  visit
the  office  of the Agent to examine and take copies  of  records
relating to and instruments evidencing the Cash Equivalents  held
by the Agent pursuant hereto.

      (e)   The  Company shall forthwith from time to  time  upon
request  of  the  Agent  deliver to the Agent  such  resolutions,
mandates,  authorities, documents, specimen signatures and  other
matters as the Agent may require and which are for the time being
in  effect  to enable the Nepal Retention Account, including  all
sub-accounts, to be opened, maintained and operated in accordance
with  this  Agreement.  The Company shall notify the Agent  (with
copies to the Trustee and each of the Lenders) of any changes  or
additions  to  the  Company's authorized  signatories,  and  such
notice shall be given prior to the implementation of such changes
or additions hereunder.

      (f)  Each of Nepal Grindlays Bank Limited, individually and
as  Agent, and the Trustee agree, for the benefit of the  Lenders
and  the  Company, that it will not create or incur any Lien  (i)
upon  or with respect to the Nepal Retention Account, except  the
Lien  of this Agreement and the other Security Documents, or (ii)
upon  or with respect to the Nepal Holding Account (as such  term
is  defined in Section 2.4 hereof), and that it shall  take  such
action,  at  its  own  expense, as shall  be  necessary  to  duly
discharge any such Lien.

      Section  2.3   Security  Interest in  the  Nepal  Retention
Account.  The Company has pledged and granted to the Trustee, for
the  benefit  of  the  Lenders,  a first  priority  charge  over,
security  interest  in  and Lien on all of the  Company's  right,
title and interest in and to the Nepal Retention Account, and all
cash,  investments and securities at any time on deposit therein,
as  security  for  the payment of the Obligations.   The  Trustee
hereby appoints Nepal Grindlays Bank Limited as its agent for the
purpose  of  carrying  out the Trustee's  obligations  under  the
Security Documents in respect of the Nepal Retention Account  and
for  the  purpose  of  perfecting the security  interest  of  the
Lenders in and to the Nepal Retention Account and all cash at any
time on deposit in the Nepal Retention Account.

      Section  2.4   Establishment of the Nepal Holding  Account.
The  Agent hereby establishes in the Company's name a special and
segregated  account  with the Agent at its office  in  Kathmandu,
Nepal  entitled "Bhote Koshi Power Company Private Limited  Nepal
Holding Account" (the "Nepal Holding Account").  The Agent  shall
withdraw  from  time  to time, strictly in  accordance  with  the
written directions of the Trustee, Rupees on deposit in the Nepal
Reserve Sub-Account and transfer such Rupees to the Nepal Holding
Account.  The Holding Account shall not be subject to any Lien in
favor  of,  or subject to any restriction whatsoever  benefiting,
the  Lenders  and amounts deposited in the Nepal Holding  Account
may  be  used by the Company for any purpose the Company  wishes.
The  Agent  shall apply amounts on deposit in the  Nepal  Holding
Account from time to time as directed by the Company in a written
notice to the Agent.

      Section  2.5   Rupee Deposits.  If any excess Rupee  amount
(excluding Rupees deposited in the Nepal Reserve Sub-Account)  is
not  converted to Dollars or other convertible currencies  within
ninety (90) days of deposit in the Nepal Retention Account  under
circumstances  in  which  Nepal  Rastra  Bank,  HMGN  or  another
Governmental Authority in Nepal having power to regulate  foreign
exchange  is  not generally permitting conversion of Rupees  into
Dollars or other convertible currencies or remittance thereof  in
order  to  pay obligations denominated in convertible currencies,
the  Designee, at the request of the Lenders, shall withdraw  and
transfer to the Lenders such excess Rupee amount.  Upon receiving
Rupees  pursuant to this Section 2.5, the Lenders will,  if  they
are  able,  convert  such Rupees to Dollars or other  convertible
currencies and apply such amount to pay Obligations owing to  the
Lenders  from  time to time in accordance with the terms  of  the
Intercreditor Agreement.



                           ARTICLE 3

                         DEPOSITS INTO
                  THE NEPAL RETENTION ACCOUNT

      Section 3.1  Nepal Retention Account Deposits.  All amounts
received  by  the Agent in respect of the Company or the  Project
shall be deposited on the day of receipt into the Nepal Retention
Account.   The  Company agrees to cause all  amounts  payable  in
Rupees  to or for the benefit of the Company (including,  without
limitation, all revenues under the PPA and all refunds of  import
duties received by the Company in Rupees) to be made directly  to
the  Agent  for deposit in the Nepal Retention Account.   In  the
event  that, notwithstanding the foregoing, any such payments  in
Rupees or other amounts denominated in Rupees are received by the
Company,  or if the Company shall draw funds available under  the
NEA  Letter  of Credit, the Company shall promptly pay,  endorse,
transfer  and deliver such payments, other amounts, or funds,  to
the  Agent for deposit in the Nepal Retention Account, and, until
such  delivery,  the Company shall hold such payments  and  other
amounts,  as  the case may be, in the same form  as  received  in
trust for the Agent.

     Section 3.2  Sub-Account Deposits.

      (a)  The Agent shall notify the Trustee of each deposit  of
funds received under the PPA from NEA (or from HMGN, as guarantor
of  NEA's payment obligations under the PPA).  Subject to Section
5.1  hereof,  on or before the Commercial Operation Date  and  at
least  five  (5)  days  prior to the first day  of  each  Quarter
thereafter,  provided  the  Trustee  has  received   a   properly
completed  Debt  Service  and  Reserve  Deposit  Certificate   in
accordance  with  the  Trust  and  Retention  Agreement   (or   a
Correction Notice), the Trustee shall instruct the Agent to  make
the  following transfers, in the amounts specified by the Trustee
in a Nepal Deposit Certificate in the form of Schedule B hereto:

                     (i)  for deposit in the Nepal Operations and
               Maintenance  Sub-Account, an amount equal  to  (A)
               the product of (x) Operating and Maintenance Costs
               payable  in  Rupees  budgeted  for  the  following
               Quarter  in the Annual Budget, multiplied  by  (y)
               1.10, minus (B) the amount then on deposit in  the
               Nepal Operations and Maintenance Sub-Account;

                     (ii) after making any withdrawal required on
               such  date pursuant to paragraph (i), for  deposit
               in  the Nepal Reserve Sub-Account an amount  equal
               to  the  number of Rupees required to be deposited
               in  the  Nepal  Operations  and  Maintenance  Sub-
               Account pursuant to clause (i) above.

      (b)  If funds on deposit in the Nepal Retention Account are
insufficient  to make some or all of the deposit into  the  Nepal
Operations and Maintenance Sub-Account specified in paragraph (i)
above,  then  funds  in  the amount of such  shortfall  shall  be
withdrawn  from the Nepal Reserve Sub-Account and transferred  to
the  Nepal  Operations and Maintenance Sub-Account and, following
each  subsequent deposit in the Nepal Retention Account of  funds
received  under  the  PPA during such Quarter,  the  Agent  shall
withdraw  from  the Nepal Retention Account and  deposit  in  the
Nepal   Operations  and  Maintenance  Sub-Account  any  remaining
shortfall.  (The Agent shall within one (1) Business Day  provide
the  Trustee with notice of any such shortfall and any  transfers
from the Nepal Reserve Sub-Account or the Nepal Retention Account
made to cover such shortfall).

      (c)   At least five (5) days prior to the first day of each
Quarter prior to the Commercial Operation Date, the Trustee shall
instruct  the Agent to withdraw from the Nepal Retention  Account
and  transfer  to the Nepal Petty Cash Sub-Account, after  making
any  withdrawals  required pursuant to  paragraphs  (a)  and  (b)
above,  the  amount specified by the Trustee in a  Nepal  Deposit
Certificate, which amount shall be the lesser of (i) Seventy-five
Thousand Dollars ($75,000) or (ii) such amount as equals Seventy-
five  Thousand  Dollars  when added  to  any  amount  that  would
otherwise  be  on deposit in the Nepal Petty Cash Sub-Account  on
the  first  day of the applicable Quarter.  During each  Quarter,
the  Company shall be permitted to withdraw from such Nepal Petty
Cash  Sub-Account  an amount not to exceed  $75,000.   Any  funds
remaining  in the Nepal Petty Cash Sub-Account on the  Commercial
Operation Date shall be deposited in the Nepal Retention Account.

      (d)  All funds received from NEA under the PPA in excess of
the  amounts directed by the Trustee to be deposited in the Nepal
Operations and Maintenance Sub-Account or the Nepal Reserve  Sub-
Account,  all  funds  in excess of the amounts  directed  by  the
Trustee to be deposited in the Nepal Petty Cash Sub-Account,  and
all other amounts received by the Agent in respect of the Company
or  the  Project,  shall be held in the Nepal Retention  Account,
converted   by  the  Agent  into  Dollars,  or  if  Dollars   are
unavailable,  other  convertible  currencies,  at  the   earliest
possible  date, in accordance with the procedures  set  forth  in
Schedule  C, and except Dollars required to be deposited  in  the
Nepal  Dollar  Sub-Account pursuant to paragraph (e)  below,  and
provided  the  Agent  has  received  any  necessary  Governmental
Approvals (which Governmental Approvals shall be obtained by  the
Company,  with the Agent hereby agreeing to reasonably  cooperate
in  connection therewith), transferred to the Trustee for deposit
in  the Offshore Retention Account.  If any such Rupees have  not
been  converted into Dollars or other convertible currencies  and
transferred  to the Trustee within ninety (90) days of  the  date
such  Rupees  are deposited under circumstances  in  which  Nepal
Rastra  Bank,  HMGN  or another Governmental Authority  in  Nepal
having  power  to  regulate  foreign exchange  is  not  generally
permitting conversion of Rupees into Dollars or other convertible
currencies  or  remittance thereof in order  to  pay  obligations
denominated in convertible currencies, the Trustee may direct the
Agent  to  withdraw and transfer to the Lenders such Rupees,  and
the  Agent  shall, to the extent that it is able to do  so  under
applicable  law,  make  such  transfer.   Upon  receiving  Rupees
pursuant  to this Section 3.2(d), the Lenders will, if  they  are
able,  convert  such  Rupees into Dollars  or  other  convertible
currencies and apply such amount to pay Obligations owing to  the
Lenders  from  time to time in accordance with the terms  of  the
Intercreditor Agreement.

      (e)   Upon  receipt from time to time of  notice  from  the
Trustee that Dollars are to be deposited in the Nepal Dollar Sub-
Account,  the Agent shall deposit the number of Dollars specified
in the Trustee's notice in the Nepal Dollar Sub-Account, when and
as  Rupees  are  converted  to Dollars  in  accordance  with  the
procedures set forth in Schedule C.


                           ARTICLE 4

                   WITHDRAWALS FROM ACCOUNTS
                    AND FUNDING REQUIREMENTS

      Section 4.1  Mandatory Withdrawals.  Upon receipt of notice
from the Trustee of the occurrence of a Special Buyout Event, the
Agent shall not pay to the Company or any other Person other than
the  Lenders  any  amounts held by the  Agent  pursuant  to  this
Agreement;  provided, however, that the Agent shall  continue  to
make  withdrawals from the Nepal Operations and Maintenance  Sub-
Account in accordance with Section 4.2 hereof and from the  Nepal
Dollar Sub-Account in accordance with Section 4.3 hereof.

      Section  4.2  Nepal Operations and Maintenance  Sub-Account
Withdrawals.  Within two (2) Business Days following a request of
the  Company pursuant to a Nepal Payment Requisition in the  form
of  Schedule  A hereto, the Agent shall withdraw from  the  Nepal
Operations and Maintenance Sub-Account the amounts set  forth  in
such  Nepal Payment Requisition and transfer such amounts to  the
payees specified therein.

      Section  4.3   Nepal Dollar Sub-Account.   Within  two  (2)
Business  Days following a request of the Company pursuant  to  a
Nepal  Payment  Requisition, the Agent shall  withdraw  from  the
Nepal  Dollar  Sub-Account the amounts set forth  in  such  Nepal
Payment  Requisition  and transfer such  amounts  to  the  payees
specified therein.

      Section  4.4   No  other Rights of Withdrawal.   Except  as
specifically  set forth in Sections 3.2(c), 4.2 and  4.3  hereof,
the  Company  shall  have  no right to  request  that  the  Agent
withdraw and transfer funds in the Nepal Retention Account.


                           ARTICLE 5

                      REMEDIES ON DEFAULT

      Section 5.1  Action by the Agent.  If the Agent receives  a
Notice  of  Default  from the Trustee or either  of  the  Lenders
specifying  that an Event of Default of the Company has  occurred
under  the Investment Agreement, the Agent shall take such action
or  shall  refrain from taking such action with respect  to  such
Event of Default as the Agent shall be directed in writing by the
Trustee   or  either  of  the  Lenders.   Without  limiting   the
foregoing, the Agent shall accumulate all monies then held by the
Agent  and,  unless  the Trustee or either of the  Lenders  shall
otherwise direct in writing, shall not pay to the Company or  any
other  Person other than the Trustee any monies held by the Agent
pursuant to this Agreement.


                           ARTICLE 6
                           THE AGENT

      Section  6.1  Appointment of Agent; Powers and  Immunities.
The  Trustee hereby appoints and authorizes Nepal Grindlays  Bank
Limited  to act as its agent hereunder, with such powers  as  are
expressly  delegated to the Agent by the terms of this Agreement.
The  Agent  shall not bear any duties or responsibilities  except
those expressly set forth in this Agreement.

     Section 6.2  Reliance by Agent.  The Agent shall be entitled
to rely upon any certificate, notice or other document (including
any   cable,  telegram,  telecopy  or  tested  telex)  reasonably
believed by it to be genuine and correct and to have been  signed
or  sent  by or on behalf of the Person or Persons purporting  to
sign  or  send  such certificate, notice or other  document,  and
shall  have no liability for its actions taken thereupon,  unless
due to the Agent's willful misconduct or gross negligence.

      Section 6.3  Resignation or Removal of Agent.   Subject  to
the  appointment and acceptance of a successor Agent as  provided
below,  the Agent may resign at any time by giving notice thereof
to  the Trustee, each of the Lenders and the Company.  The  Agent
may  be  removed at any time with or without cause by the Trustee
(with  the concurrence of either of the Lenders).  Upon any  such
resignation  or  removal, the Trustee shall appoint  a  successor
Agent  with the prior written consent of the Lenders, or, if  the
Trustee  shall fail to do so within sixty (60) days, the  Lenders
shall  appoint  a successor Agent, and thereafter,  the  retiring
Agent  shall be relieved of its obligations hereunder.  Upon  the
acceptance  of any appointment as Agent hereunder by a  successor
Agent,  the  retiring  Agent shall promptly  transfer  the  Nepal
Retention Account and the Nepal Holding Account to the possession
or  control of the successor Agent.  If the Lenders also fail  to
appoint  a  successor Agent within an additional sixty  (60)  day
period  following the aforesaid sixty (60) day period, the  Agent
shall be relieved of its obligations hereunder and will hold  any
amounts  remaining in the Nepal Retention Account at the disposal
of the Trustee.

      Section 6.4  Court Orders.  The Agent is hereby authorized,
in  its  exclusive discretion, to obey and comply with all writs,
orders,   judgments   or  decrees  issued   by   any   court   or
administrative  agency affecting any money, documents  or  things
held by the Agent, provided the Agent has notified the Trustee of
any  such writ, order, judgment or decree and the Agent's actions
in connection therewith.  The Agent shall not be liable to any of
the   parties   hereto,  their  successors,  heirs  or   personal
representatives  by  reason of the Agent's compliance  with  such
writs,  orders, judgments or decrees, notwithstanding such  writ,
order, judgment or decree is later reversed, modified, set  aside
or vacated.


                           ARTICLE 7

                EXPENSES;  INDEMNIFICATION; FEES

      Section  7.1   Expenses.   The Company  agrees  to  pay  or
reimburse  within  thirty  (30)  days  of  demand  therefor   all
reasonable out-of-pocket expenses of the Agent in respect of,  or
incident  to,  the  preparation, execution and delivery  of  this
Agreement,  the  administration  of  this  Agreement,  the  Nepal
Retention Account (including currency conversion costs)  and  the
Nepal  Holding Account, the enforcement of any of the  provisions
of  this Agreement or in connection with any amendment, waiver or
consent relating to this Agreement, provided that any such demand
is  accompanied  by  such  supporting  documentation  as  may  be
reasonably requested by the Company.

       Section  7.2   Indemnification.   The  Company  agrees  to
indemnify  and hold harmless the Agent, its directors,  officers,
employees,  agents  and  representatives  (the  Agent   and   its
directors,  officers, employees, agents and representatives  each
an  "Indemnified  Party") from and against any  and  all  claims,
losses and liabilities growing out of or resulting from or in any
way  related  to  this  Agreement and the transactions  hereunder
(including,  without limitation, enforcement of  this  Agreement,
but  excluding  any such claims, losses or liabilities  resulting
from   the  Indemnified  Party's  gross  negligence  or   willful
misconduct  or,  in  the  case  of  handling  of  funds,   simple
negligence of the Agent).

      Section 7.3  Fees.  The Company agrees to pay to the  Agent
the  fees  set  forth  in  the Fee Schedule  attached  hereto  as
Schedule  D.   Such Fee Schedule shall be subject to  review  and
amendment by the Agent every second (2nd) anniversary of the date
hereof;  provided,  however,  that  any  amendments  to  the  Fee
Schedule shall be subject to the mutual agreement of the  parties
hereto and to the prior written consent of the Lenders.


                           ARTICLE 8

              SATISFACTION AND DISCHARGE OF TRUST

      Section  8.1   Satisfaction and Discharge of  Trust.   Upon
delivery to the Agent of a certificate signed by the Trustee  and
the   Lenders  stating  that  all  conditions  precedent  to  the
satisfaction  and  discharge  of this  Agreement  and  the  other
Security Documents have been complied with, this Agreement  shall
cease  to  be of further effect, and the Agent, at the  cost  and
expense   of   the  Company,  shall  execute  proper  instruments
acknowledging  the satisfaction and discharge of  this  Agreement
and  shall  transfer  all funds, if any, in the  Nepal  Retention
Account or the Nepal Holding Account to the Company at such place
and in such manner to be specified in writing by the Company.



                           ARTICLE 9

                      PARTICULAR COVENANTS

     Section 9.1  Reporting Requirements.

      (a)   The Agent shall, on a monthly basis and at such other
times as the Trustee, the Lenders or the Company may from time to
time  reasonably  request, provide to the Trustee,  each  of  the
Lenders and the Company account balance statements in respect  of
the Nepal Retention Account.

      (b)   On the fifth Business Day of each Contract Month,  as
such  term  is  defined in the PPA, the Agent  shall  notify  the
Trustee,  each  of  the Lenders and the Company  if  it  has  not
received  the  monthly  payment by NEA  under  the  PPA  for  the
preceding Contract Month.

      (c)   The  Agent shall give notice to the Trustee  and  the
Company  of funds received by the Agent in respect of the Company
or  the Project, specifying the amount of such payment, the  date
of  receipt  and  the name of the payor.  If any such  funds  are
received by 12:00 noon on any Business Day, the Agent shall  give
the aforesaid notice on such Business Day.  If any such funds are
received  after 12:00 noon on any Business Day, the  Agent  shall
give the aforesaid notice on the next following Business Day.

     Section 9.2  Nepal Payment Requisitions, Etc.

      (a)   Any notice, request or requisition given to the Agent
shall  be  in  writing and shall state the date of the  requested
transfer, withdrawal, deposit or payment, the amount, source  and
disposition of any such funds.

      (b)  The Agent shall rely on each Nepal Payment Requisition
properly  completed and signed by an Authorized  Officer  of  the
Company and each Nepal Deposit Certificate, Notice of Default  or
other notice delivered by the Trustee.

     Section 9.3  Other Notices.  The Agent shall promptly notify
the Trustee of any matter of which the Agent becomes aware in the
course of the performance of its obligations under this Agreement
that  may,  in  the opinion of the Agent, be of  concern  to  the
Trustee or the Lenders.

      Section  9.4  Business Days.  If any transfer,  withdrawal,
deposit  or  payment of any funds by the Agent is to be  made  or
taken  on  a  day  other  than  a Business  Day,  such  transfer,
withdrawal, deposit or payment shall be made or taken on the next
succeeding Business Day.


                          ARTICLE 10

                 REPRESENTATIONS AND WARRANTIES

     Section 10.1  Representations and Warranties of the Company.
The Company represents and warrants that as of the date hereof:

      (a)   it  has  the  power to open and  maintain  the  Nepal
Retention  Account,  including all sub-accounts,  and  the  Nepal
Holding  Account and has taken all necessary corporate and  other
action  required to authorize the opening and maintenance thereof
upon  the terms referred to herein and the execution and delivery
of all such documents as are necessary for the purpose thereof;

      (b)   except for the approval of the Nepal Rastra Bank  for
the  establishment of the Nepal Retention Account and  the  Nepal
Holding  Account  and the remittance of foreign currency  to  and
from  the  Offshore  Retention Account and  the  Nepal  Retention
Account  (including  all  sub-accounts)  and  the  Nepal  Holding
Account,  all of which have been obtained and are in  full  force
and effect and those which have been listed in Schedule 4.1(d) of
the  General  Conditions,  it  is not  necessary  to  permit  the
performance   of   or   to   ensure   the   legality,   validity,
enforceability or admissibility in evidence of this Agreement  or
the  assignment,  charge,  security  interest  and  Lien  on  the
Collateral  created  by this Agreement, that  this  Agreement  be
filed, recorded or enrolled with any Governmental Authority;

      (c)  all consents, licenses, approvals or authorizations of
or declarations to or registrations with Governmental Authorities
and  the payment of all stamp duties and other transaction  taxes
required  to make this Agreement and the Nepal Retention  Account
and  the  Nepal  Holding  Account  and  the  assignment,  charge,
security interest and Lien on the Nepal Retention Account created
under  this  Agreement and the Security Agreement and  Assignment
legal,  valid  and  enforceable as a  first  assignment,  charge,
security  interest and Lien over the Nepal Retention Account  and
admissible  in evidence, and to enable it lawfully to enter  into
and  perform its obligations hereunder and thereunder, have  been
obtained or made and are in full force and effect; and

       (d)   this  Agreement  is  effective  to  create  a  valid
assignment,  charge, security interest and Lien  over  the  Nepal
Retention Account, constituting in favor of the Agent,  as  agent
for the Trustee, for the benefit of the Lenders, a first priority
security  interest  with respect to the Nepal Retention  Account,
and  all  cash, investments and securities at any time on deposit
therein, to the exclusion of all other obligations of the Company
to its other creditors.

      Section  10.2   Representations  and  Warranties  of  Nepal
Grindlays  Bank  Limited.  Nepal Grindlays Bank Limited,  in  its
individual capacity, hereby represents and warrants that:

      (a)  it is a banking corporation duly organized and validly
existing  in good standing under the laws of the jurisdiction  of
its  incorporation and has the corporate power and  authority  to
enter into and perform its obligations under this Agreement,  and
has full right, power and authority to enter into and perform its
obligations as the Agent hereunder;

      (b)  this Agreement has been duly authorized, executed  and
delivered  by  it  and constitutes its valid and legally  binding
obligation, enforceable in accordance with its terms;

      (c)   the  execution,  delivery  and  performance  of  this
Agreement will not conflict with or result in a breach of any  of
the  terms, conditions or provisions of, or constitute a  default
or  require any consent under, any indenture, mortgage, agreement
or  other instrument or arrangement to which it is a party or  by
which  it is bound, or violate any of the terms or provisions  of
its   articles  of  incorporation,  by-laws  or  other  governing
documents, or any judgment, decree or order or any law,  statute,
rule or regulation applicable to it;

      (d)  it has obtained all consents, licenses, approvals  and
authorizations  of  all Governmental Authorities  required  under
applicable  laws, regulations, decrees or orders of or  in  Nepal
(which  may  legally  be  obtained as  of  the  date  hereof)  in
connection with its execution, delivery, performance, validity or
enforceability  of  this  Agreement,  and  that  such   consents,
licenses and authorizations are in full force and effect; and

     (e)  it is an authorized foreign exchange dealer in Nepal.



                           ARTICLE 11

                    MISCELLANEOUS PROVISIONS

           Section  11.1  Successors or Assigns.  This  Agreement
shall  be  binding  upon  and inure to  the  benefit  of  and  be
enforceable  by  the  respective successors and  assigns  of  the
parties hereto; provided, however, that neither the Company,  the
Trustee nor the Agent may assign or transfer any of its rights or
obligations  hereunder without the prior written consent  of  the
Lenders.   Each of the Lenders may transfer, assign or grant  its
rights hereunder in connection with an assignment or transfer  of
all  or  any  part of its interest in its Commitment or  the  IFC
Loans or the DEG Loan, as the case may be, in accordance with the
Investment Agreement.

      Section 11.2  Notices.  All notices, demands, requests  and
other  communications provided for hereunder shall be in  writing
and  shall  be  deemed  to  have been given  (a)  when  presented
personally,  (b) when sent by overnight courier service,  on  the
Business  Day  following  the date of delivery  to  such  courier
service, or such later day as demonstrated by a bona fide receipt
therefor,   or   (c)   when  transmitted   by   facsimile,   upon
acknowledgment  of  receipt  by the  recipient.   Any  party  may
designate  from  time  to time by written  notice  to  the  other
parties another address to which notices are to be sent.


Addresses:

Bhote Koshi Power Company Private Limited
KHA 1-960
Kalimati, Tahachal
Kathmandu, Nepal
Attn:     Project Manager
Fax: 011 977-1-270027


Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention:  Corporate Trust Administration
Tel: (302) 651-8726
Fax: (302) 651-8882


Nepal Grindlays Bank Limited
G.P.O. Box No. 3990
Naya Baneshwor
Kathmandu, Nepal
Attn:     J. Basnyat
     Senior Manager
Fax: (977) 1-226762


International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C.  20433, United States
Attn:     Director, Power Department
Fax: (202) 974-4307

DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH
Belvederestrasse 40
D-50933
Koeln (Mungersdorf)
Federal Republic of Germany
Attn:     Infrastructure Department
Fax: 011 49 221 4986 107


      Section 11.3  Counterparts.  This Agreement may be executed
in any number of counterparts and by the different parties hereto
in  separate  counterparts, each of which when  so  executed  and
delivered  shall be an original, but all of which shall  together
constitute one and the same instrument.

     Section 11.4  Governing Law; Dispute Resolution.

      (a)   This Agreement shall for all purposes be governed  by
and  construed  in  accordance with the laws of  the  Kingdom  of
Nepal.

      (b)   Each of the Agent and the Trustee shall designate  in
writing  to  the  other  party  a  representative  who  shall  be
authorized to resolve any dispute arising under this Agreement in
an  equitable  manner  and, unless otherwise  expressly  provided
herein,  to exercise the authority of the parties hereto to  make
decisions by mutual agreement.

                         (i)     If    the   designated
                 representatives are unable to  resolve
                 a  dispute under this Agreement within
                 thirty  (30)  days of the commencement
                 of  discussions, such dispute shall be
                 referred   by   such  representatives,
                 respectively,  to  a  senior   officer
                 designated by the Agent and  a  senior
                 officer  designated by the Trustee  to
                 be  resolved within thirty  (30)  days
                 of the commencement of discussions.

                       (ii) The parties hereto agree to
                 attempt   to   resolve  all   disputes
                 arising  hereunder promptly, equitably
                 and in a good faith manner.

                       (iii)      The  parties  further
                 agree  to  provide  each  other   with
                 reasonable   access   during    normal
                 business   hours  to   any   and   all
                 records,    information    and    data
                 pertaining  to any such dispute  other
                 than  any  confidential  communication
                 between   any  party  and  its   legal
                 advisor(s)   or   any  such   records,
                 information  or data which  any  party
                 has  agreed  with any third  party  to
                 keep confidential.

      (c)  In the event that any dispute is unable to be resolved
between the parties pursuant to Section 11.4(b) hereof, then such
dispute  shall  be  settled exclusively and  finally  by  binding
arbitration.  It is specifically understood and agreed  that  any
dispute  that  cannot be resolved between the parties,  including
any  matter  relating to the interpretation  of  this  Agreement,
shall  be  submitted to arbitration irrespective of the magnitude
thereof,  the  amount in dispute or whether  such  dispute  would
otherwise be considered justiciable or ripe for resolution by any
court  or  arbitral tribunal.  This Agreement and the rights  and
obligations of the parties shall remain in full force and  effect
pending  the  award in such arbitration proceeding,  which  award
shall  determine whether and when termination of this  Agreement,
if relevant, shall become effective.

      (d)  Each arbitration shall be conducted in accordance with
the  UNCITRAL Arbitration Rules as in effect on Chaitra 17,  2050
(March  30,  1994)  except  as  such  Rules  conflict  with   the
provisions of this Section 11.4 in which event the provisions  of
this Section 11.4 shall prevail.

       (e)    Each  arbitral  tribunal  shall  consist  of  three
arbitrators.  Provided there are only two parties to any dispute,
each  party shall appoint one arbitrator and the third arbitrator
shall  be  appointed by the Secretary General  of  the  Permanent
Court  of  Arbitration at the Hague.  If there are more than  two
parties  to  any dispute, each of the parties thereto  will  work
together  in  good  faith to appoint three arbitrators.   If  the
parties are unable to agree on such arbitrators with fifteen (15)
days,  three  arbitrators  shall be appointed  by  the  Secretary
General  of the Permanent Court of Arbitration at the Hague  upon
the request of any party to the dispute.  No arbitrator shall  be
a  present employee or agent of, or consultant or counsel to, any
party or any Affiliate of any party.

      (f)   Each  arbitration  shall be conducted  in  Kathmandu,
Nepal,  and the parties agree to exclude any right of application
to  any court or tribunal of competent jurisdiction in connection
with any question of law arising in the course of any arbitration
in connection with this Agreement.

      (g)   The  language  to be used and all  written  documents
provided in each arbitration shall be English.

      (h)   Any  decision or award of a majority of  an  arbitral
tribunal  appointed pursuant to this Section 11.4 shall be  final
and  binding  upon the parties.  The Agent, the Trustee  and  the
Company each waives to the extent permitted by law any rights  to
appeal  or  any review of such award by any court or tribunal  of
competent  jurisdiction.  The Agent, the Trustee and the  Company
each  agrees  that a judgment upon any arbitration award  may  be
entered into by any court of competent jurisdiction thereof.

      (i)   All  arbitration awards shall be denominated  in  the
currency  to which such dispute relates, Dollars, Deutsche  Marks
or  Rupees.  Interest on the amount to be paid in accordance with
the  arbitration award at a rate equal to seven percent (7%)  per
annum  shall be due and payable to the prevailing party from  the
date on which the matter was first submitted to arbitration up to
and including the date of payment.

     Section 11.5  No Waiver; Cumulative Remedies.  No failure or
delay  on  the part of the Trustee, the Agent or the  Lenders  in
exercising  any right, power or privilege hereunder shall  impair
any  such  right,  power  or privilege or  operate  as  a  waiver
thereof,  nor shall any single or partial exercise of any  right,
power  or  privilege hereunder or under any other  Loan  Document
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder.

     Section 11.6  Severability.  Any provision of this Agreement
which  is prohibited or unenforceable in any jurisdiction  shall,
as  to  such jurisdiction, be ineffective to the extent  of  such
prohibition or unenforceability but that shall not invalidate the
remaining  provisions of this Agreement or affect such  provision
in any other jurisdiction.

     Section 11.7  Communications.  All documents to be furnished
or  communications to be given or made under this Agreement shall
be  in the English language or, if in another language, shall  be
accompanied  by  a  translation  into  English  certified  by   a
representative  of the Company, which translation  shall  be  the
governing  version between the Company, the Lenders, the  Trustee
and the Agent.

     Section 11.8  Amendments.  Neither this Agreement nor any of
the terms hereof may be changed, waived, discharged or terminated
unless  such  change,  waiver, discharge  or  termination  is  in
writing signed by all of the parties hereto.

      Section 11.9  Concerning the Trustee.  In acting hereunder,
Wilmington Trust Company shall be afforded all rights, immunities
and  protections  of  the Trustee under the Trust  and  Retention
Agreement.

      IN  WITNESS  WHEREOF, the parties hereto have  caused  this
Agreement  to  be  executed and acknowledged by their  respective
officers or representatives hereunto duly authorized, as  of  the
date first above written.

                         BHOTE  KOSHI  POWER COMPANY PRIVATE LIMITED



                         By:
                              Name:
                              Title:



                         INTERNATIONAL FINANCE CORPORATION



                         By:
                              Name:
                              Title:    Authorized Signatory



                         DEG-DEUTSCHE INVESTITIONS-und
                         ENTWICKLUNGSGESELLSCHAFT mbH



                         By:
                              Name:
                              Title:    Authorized Signatory



                        WILMINGTON TRUST COMPANY,  not in its
                        individual capacity but solely as Trustee


                         By:
                              Name:
                              Title:



                         NEPAL GRINDLAYS BANK LIMITED



                         By:
                              Name:
                              Title:




                                                       SCHEDULE A



               FORM OF NEPAL PAYMENT REQUISITION

                             [Date]


Nepal Grindlays Bank Limited
G.P.O.  Box No. 3990
Naya Baneshwor
Kathmandu, Nepal
Attention:  J. Basnyat, Senior Manager


Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
USA
Attention:  Corporate Trust Administration


International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C.  20433, United States
Attention:     Director, Power Department


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

Dear Sirs:

           Reference  is  made to the Nepal Agency and  Retention
Agreement (the "Agreement"), dated as of the Closing Date,  among
Bhote  Koshi  Power  Company  Private  Limited  (the  "Company"),
International    Finance   Corporation   ("IFC"),    DEG-Deutsche
Investitions-und Entwicklungsgesellschaft mbH ("DEG"), Wilmington
Trust  Company,  as Trustee (the "Trustee") and  Nepal  Grindlays
Bank  Limited,  as Agent (the "Agent").  Capitalized  terms  used
herein  without definition shall have the meanings  specified  in
Schedule A to the General Conditions.

           I.    The Company hereby requests that, on __________,
the  Agent,  in  accordance with Section 4.2  of  the  Agreement,
withdraw   the  following  amounts  of  Rupees  from  the   Nepal
Operations and Maintenance Sub-Account and transfer such  amounts
to the payees indicated below:


     Payee                              Amount of Payment




      The  Company hereby requests that,  on               ,  the
Agent,  in accordance with Section 4.3 of the Agreement, withdraw
the  following  amounts  of Dollars from the  Nepal  Dollar  Sub-
Account and transfer such amounts to the payees indicated below:

   Payee      Amount of Payment




The  Company hereby certifies that such withdrawals and transfers
are  to be made to pay Operating and Maintenance Costs or Project
Costs.

          II.  The Company hereby certifies that:

                               (i)  as of the date
                    hereof no Default or Event  of
                    Default  has occurred  and  is
                    continuing which has not  been
                    waived by the Lenders [or,  if
                    a  Default  exists, specifying
                    the  nature and extent thereof
                    and what action the Company is
                    taking in respect thereto];*

                               (ii) a copy of this
                    Nepal Payment Requisition  has
                    been  timely delivered to  the
                    Trustee,  and  each   of   the
                    Lenders in accordance with the
                    provisions of the Agreement.

       The  undersigned  hereby  certifies  that  he/she  is   an
Authorized  Officer  of  the  Company,  and  that,  as  such,  is
authorized  to execute and deliver this Nepal Payment Requisition
on behalf of the Company.

                         BHOTE  KOSHI  POWER COMPANY PRIVATE LIMITED


                         Title:



                                                       SCHEDULE B


               FORM OF NEPAL DEPOSIT CERTIFICATE

                             [Date]

Nepal Grindlays Bank Limited
G.P.O.  Box No. 3990
Naya Baneshwor
Kathmandu, Nepal
Attention:  J. Basnyat, Senior Manager



Dear Sirs:

     Reference is made to the Nepal Agency and Retention
Agreement (the "Agreement"), dated as of the Closing Date, among
Bhote Koshi Power Company Private Limited (the "Company"),
International Finance Corporation ("IFC"), DEG-Deutsche
Investitions-und Entwicklungsgesellschaft mbH ("DEG"), Wilmington
Trust Company, as Trustee (the "Trustee") and Nepal Grindlays
Bank Limited (the "Agent").  Capitalized terms used herein
without definition shall have the meanings specified in Schedule
A to the General Conditions.

     In accordance with Section 3.2(a), the Trustee hereby
directs the Agent to withdraw the following amount from the Nepal
Retention Account (Account No. 1010215481001) or, if funds in the
Nepal Retention Account are insufficient, from the Nepal Reserve
Sub-Account (Account No. 1010215481003), and transfer such amount
to the Nepal Operations and Maintenance Sub-Account (Account No.
1010215481002):  __________Rs.

     The Trustee hereby directs the Agent to withdraw the
following amount from the Nepal Retention Account (Account No.
1010215481001) and transfer such amount to the Nepal Reserve Sub-
Account (Account No. 1010215481003):  __________Rs.

     The Trustee hereby directs the Agent to withdraw the
following amount from the Nepal Retention Account (Account No.
1010215481001) and transfer such amount to the Nepal Petty Cash
Sub-Account (Account No. 1010215481004): __________Rs.

     The Trustee hereby directs the Agent to convert into Dollars
at the earliest practicable date all Rupees remaining in the
Nepal Retention Account after the foregoing transfers have been
made, in accordance with the procedures set forth in the Nepal
Agency and Retention Agreement, and to transfer such Dollars as
follows: (i)  to the Nepal Dollar Sub-Account: $            ;
(ii) through your correspondent bank in New York, to the Trustee
for deposit in the Offshore Retention Account: $            .
Wire transfer instructions are as follows:


     Wilmington Trust Company
     ABA Routing Number 031100092
     For Credit to Offshore Retention
       Account (Account No. 43370-0)
     Attn:  David A. Vanaskey
     Ref:  Bhote Koshi Power Company Private Limited


                         WILMINGTON TRUST COMPANY,
                         not in its individual capacity but
                         solely as Trustee



                         By:
                             Name:
                             Title:


                                                       SCHEDULE C


         PROCEDURE FOR CONVERSION OF RUPEES TO DOLLARS

     1.   Under the PPA, the Company will submit an invoice to
NEA for each Contract Month (each Nepalese calendar month) on or
before the fifth Business Day of each Contract Month commencing
with the first full Contract Month to occur after the date of
First Unit Delivery.  (The Company will copy the Agent on each
such invoice.)  Amounts owing by NEA are denominated in Dollars
and Rupees.  The Dollar proportion of each payment by the NEA is
made at Nepal Rastra Bank's published selling rate of exchange on
the date of payment (the "Dollar Equivalency Rate").

     2.   NEA is required pursuant to the PPA to pay each invoice
within thirty (30) days of receipt.

     3.   Fifteen (15) days prior to the scheduled receipt of
such Rupee payment from NEA, the Company will submit to the Nepal
Rastra Bank the application required for approval (the "NRB
Approval") of the conversion of all or a portion of such payment
from Rupees into Dollars and transfer of the resulting amount to
the Offshore Retention Account.

     4.   If such payment from NEA is received on any Business
Day after 12:00 noon, Kathmandu time, or on any non-Business Day,
such payment will be placed by the Agent into the Nepal Retention
Account and the Agent will take the steps outlined in paragraph 5
on the next Business Day in Nepal.  Amounts held on deposit in
the Nepal Retention Account will be invested overnight by the
Agent (whether or not specifically instructed to do so by the
Company) in Cash Equivalents.

     5.   If such payment from NEA is received on any Business
Day before 12:00 noon, Kathmandu time, then the Agent will place
in the Nepal Operations and Maintenance Sub-Account and the Nepal
Reserve Sub-Account on the same Business Day the amount specified
by the Trustee in a Nepal Deposit Certificate, subject to the
same being received before 12:00 noon.

     6.   At the direction of the Trustee, the remaining portion
of such payment will be converted by the Agent into Dollars at
the best rate then obtainable in the market by the Agent.
Further:

          (a)  The Agent will use its best efforts to convert the
remaining portion of such payment in the market at a rate at
least as favorable to the Company as the Dollar Equivalency Rate.
If it is able to convert the entire remaining portion of such
payment at the Dollar Equivalency Rate (or a better rate), on the
date of receipt of such payment, the Agent will effect such
conversion immediately.

          (b)  If the Agent is unable, as a consequence of a
temporary decline in the market conversion rate or a temporary
disruption in, or lack of sufficient depth in, the market for
Rupee/Dollar exchange, to convert the entire remaining portion of
such payment at a rate at least as favorable to the Company as
the Dollar Equivalency Rate, then the Agent shall, upon the
Company's request, immediately convert any part of the remaining
portion that it is able to convert at a rate at least as
favorable to the Company as the Dollar Equivalency Rate.  If
there is any balance remaining, the Agent will consult with the
Company and if the Agent and the Company reasonably believe that
the market may improve during the next seven (7) Business Days,
the Agent, on the Company's request, will delay the conversion of
such remaining portion and will convert it on the one or more
days on or before the seventh (7th) Business Day following
receipt of such payment.  If the Agent and the Company do not
reasonably believe that conditions may improve during the next
seven (7) Business Days, then paragraph (c) below will apply.

          (c)  If the Agent is unable to convert all or any part
of the remaining portion of such payment under paragraphs (a) or
(b) above it will, on receipt of the Company's request
accompanied by an application to Nepal Rastra Bank, apply to
Nepal Rastra Bank to effect the conversion, which conversion
shall be on terms directed or approved by the Trustee.

     7.   On the same date the Agent effects each conversion, or
if Nepal Rastra Bank effects any conversion, on the same date
Nepal Rastra Bank effects such conversion, the amount of the
Dollars obtained will be transferred to the Offshore Retention
Account or, if the Trustee has so instructed the Agent, to the
Nepal Dollar Sub-Account.

     8.   Amounts of Dollars to be transferred by the Agent to
the Offshore Retention Account will be credited by the Agent to
its account at a correspondent bank in New York (American Express
Bank, ANZ or any other bank satisfactory to the Trustee and the
Company), which will transfer such amounts for value on the same
day (or, if such day is not a business day in New York, on the
next business day in New York) to the Offshore Retention Account;
provided, that the Agent shall not be responsible for any delay
in the crediting of such amounts to the Offshore Retention
Account during any period in which its correspondent bank is
unable, for reasons entirely beyond the Agent's reasonable
control, to receive instructions from the Agent to credit the
relevant amounts on such date (so long as the Agent has properly
dispatched telex or other instructions and used every reasonable
effort to communicate with its correspondent bank).

     9.   In the event that the Agent is unable to effect a
conversion hereunder from Rupees to Dollars, the Agent will, upon
receipt of the direction or approval of the Trustee, convert such
Rupees to convertible currencies other than Dollars, all in
accordance with terms directed or approved by the Trustee.





                                                       SCHEDULE D

                          FEE SCHEDULE

In terms of Section 7.3 hereof the Company agrees to pay to the
Agent the following fees:

Documentation Fee:

A front-end fee of USD $10,000 or equivalent Nepali rupees
payable within thirty (30) days of signing the Agreement.

Retention Fee:

A retention fee at the rate of USD $1,500 or equivalent Nepali
rupees per annum or part thereof, payable on or before the
anniversary of the signing of the Agreement and every anniversary
thereafter until the Agreement is terminated.

Management Fee:

A management fee of USD $6,000 or equivalent Nepali rupees per
annum or part thereof payable on the day of receipt of the first
payment into the Nepal Retention Account and every anniversary
thereafter until the Agreement is terminated.

Remittance Fee:

A remittance fee at the rate of 0.025% of the face value of the
amount being transferred in the form of draft or telegraphic
transfers.

Other Charges:

Other charges as applicable payable from time to time for
services rendered as per the Agent's standard tariff of charges
and all out-of pocket expenses of the Agent in respect of, or
incident to, the performance, execution, delivery, and
enforcement of this Agreement.
_______________________________
     *    No transfers requested in any Nepal Payment Requisition
shall  be  made  unless the Company certifies that  no  Event  of
Default  exists,  except in accordance  with  Article  5  of  the
Agreement.