Table
of Contents





UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,DC20549





FORM 10-K


(Mark One)


x
            ANNUAL REPORT
      PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the fiscal year
ended December 31, 2007





or





o
            TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from ________
to _______





Commission file
number:  0-25935





THERIDGEWOODPOWER GROWTH FUND


(Exact Name of Registrant as Specified
in Its Charter)





Delaware
            
            22-3495594(State or Other Jurisdiction
      of
              Incorporation or
      Organization)
            
            (IRS Employer Identification
      Number)





1314 King Street,Wilmington,DE19801(Address of Principal Executive
      Offices, including Zip Code)





(302)
    888-7444(Registrant’s telephone number,
      including area code)





SECURITIES REGISTERED PURSUANT TO
SECTION 12(b) OF THE ACT:





None





SECURITIES REGISTERED PURSUANT TO
SECTION 12(g) OF THE ACT:





Investor Shares of Beneficial
      Interest(Title of
      Class)




Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. YesoNox





Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or 15(d) of the
Act. YesoNox





Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.YesxNoo





Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.o





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer,anon-accelerated filer, or a smaller reporting
company. See
definitionsof “largeaccelerated filer”,“accelerated filer”and “smaller reporting company”in Rule 12b-2 of the
Exchange Act. (Check one):




Large accelerated
fileroAccelerated fileroNon-accelerated filero   Smaller reporting
companyx


(Do not check
if a smaller reporting company)





Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesoNox





There is no market for the Investor
Shares. The number of Investor Shares outstanding at January 31, 2008was
658.1067.




Table of Contents


FORM
10-K




TABLE OFCONTENTS





PART I


Page


Item 1.
            Business
            1Item 1A.
            Risk Factors
            5Item 1B.
            Unresolved Staff Comments
            9Item 2.
            Properties
            9Item 3.
            Legal Proceedings
            9Item 4.
            Submission of Matters to a Vote of Security
      Holders
            10PART
      IIItem 5.
            Market for Registrant’s Common Equity, Related Security
      Holder Matters andIssuer Purchases of Equity Securities
            10Item 6.
            Selected Financial Data
            10Item 7.
            Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
            10Item 7A.
            Quantitative and Qualitative Disclosures About Market
      Risk
            15Item 8.
            Financial Statements and Supplementary
    Data
            15Item 9.
            Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
            15Item 9A.
            Controls and Procedures
            15Item 9B.
            Other Information
            16PART
      IIIItem 10.
            Directors, Executive Officers and Corporate
      Governance
            17Item 11.
            Executive Compensation
            18Item 12.
            Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
            19Item 13.
            Certain Relationships and Related Transactions, and Director
      Independence
            19Item 14.
            Principal Accountant Fees and Services
            21PART
      IVItem 15.
            Exhibits and Financial Statement
    Schedules
            21SIGNATURES
            24




Table of Contents


Forward-Looking
Statements




Certain statements discussed in
Item 1. “Business”, Item 3. “Legal Proceedings”andItem 7. “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and elsewhere in
this Annual Report on Form 10-K constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995.





These forward-looking statements
generally relate to theFund’s plans, objectives and expectations
for future events and include statements about theFund’s expectations, beliefs, plans,
objectives, intentions, assumptions and other statements that are not historical
facts. These statements are based upon management’s opinions and estimates as of
the date they are made. Although management believes that the expectations
reflected in these forward-looking statements are reasonable, such
forward-looking statements are subject to known and unknown risks and
uncertainties that may be beyond theFund’s control, which could cause actual
results, performance and achievements to differ materially from results,
performance and achievements projected, expected, expressed or implied by the
forward-looking statements. Examples of events that could cause actual results
to differ materially from historical results or those anticipated include
changes in political and economic conditions, federal or state regulatory
structures, government mandates, the ability of customers to pay for energy
received, supplies and prices of fuels, operational status of generating plants,
mechanical breakdowns, volatility in the price for electric energy, natural gas,
or renewable energy. Additional information concerning the factors that could
cause actual results to differ materially from those in the forward-looking
statements is contained inItem 1A. “Risk Factors” andItem 7. “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”, and elsewhere in
this Annual Report on Form 10-K. TheFundundertakes no obligation to publicly
revise any forward-looking statements or cautionary factors, except as required
by law.





PART I




ITEM 1.  BUSINESS





Overview





The Ridgewood PowerGrowth Fund (the “Fund”) is aDelawaretrustformed on February 18, 1997
primarilyto make
investments in projects and businesses in the energy and infrastructure sectors
both in theUSand abroad. Ridgewood Renewable Power
LLC (“RRP” or the “Managing Shareholder”), aNew Jerseylimited liability company, is the
Managing Shareholder. As the Managing Shareholder, RRP has direct and exclusive
control over the management and operations of the Fund.




The Fund has focused primarily on
small-scale electricity generation projects using renewable sources of fuel and
on water treatment facilities in remote locations serving hotel resort
developments. These projects allow the Fund to develop secure long-term
positions in attractive specialty markets for products and services provided by
its projects and companies. As of December 31, 2007, the projects in which the
Fund had investments were located in theUnited StatesandEgypt. As of that date, the Fund had
investments in hydro-electric generating projects in the US with total capacity
of 15 megawatts (“MW”),and in projects in Egyptwiththe capacity to produce approximately
29,100 cubic meters (approximately 7.7 million gallons) of potable water per day
and electricity generating capacity of 23.8MW.The Fund previously owned landfill
gas-fired electric projects located in theUnited Kingdom, which were sold in February
2007.





The Managing Shareholder announced that
it intends to market theFund’s water desalinization and
hydro-electric projectsfor
sale. These assets
represent the remaining investments of the Fund. There can be no assurance that
any such sales will occur.




The Fund initiated its private placement
offeringin February 1998 selling whole and
fractional investor shares
of beneficial interests of $100,000 per share (“Investor Shares”). There is no
public market for Investor Shares and one is not likely to develop. In addition,
Investor Shares are subject to significant restrictions on transfer and resale
and cannot be transferred or resold except in accordance with the Fund’s
Declaration of Trust (“Declaration of Trust”) and applicable federal and state
securities laws. The offering was concluded in April 2000, and after payment of
offering fees, commissions and investment fees,the Fund had $54.6 millionavailableforinvestments and operating expenses. As
of January 31, 2008, the Fund had 658.1067 Investor Shares outstanding, held by
1,345 shareholders.





Managing Shareholder




RRP, via a predecessor corporation, was
founded in 1991 by Robert E. Swanson. As the Managing Shareholder, RRP has
direct and exclusive control over the management of the Fund’s operations. With
respect to project investments, RRP locates potential projects, conducts
appropriate due diligence and negotiates and completes the transactions in which
the investments are made by the Fund.




1
 Table of Contents


In addition, RRP performs (or arranges
for the performance of) the operation and maintenance of the projects invested
in by the Fund and the management and administrative services required for Fund
operations. Among other services, RRP administers the accounts and handles
relations with the shareholders, including tax and other financial information.
RRP also provides the Fund with office space, equipment and facilities and other
services necessary for its operation.




As compensation for its management
services, the Managing Shareholder is entitled to (i) an annual management fee,
payable monthly, equal to 2.5% of the total capital contributions made by the
Fund’s shareholders, and (ii) a 25% interest in the cash distributions made by
the Fund in excess of certain threshold amounts expressed in terms of
shareholder returns. The Managing Shareholder is also entitled to receive
reimbursement from the Fund for operating expenses incurred by the Fund, or on
behalf of the Fund and paid by RRP, as the Managing Shareholder. RRP has
arranged for administrative functions required to be performed for the Fund to
be performed by an affiliate, Ridgewood Power Management LLC (“RPM”), and at
RPM’s costs, such costs are reimbursed to RPM by the Fund. RRP also serves as
the managing shareholder (or managing member as appropriate) of a number of
affiliated funds and investment vehicles similar to the Fund and, through RPM,
provides services to those entities similar to those provided to the
Fund.




Affiliates of RRP act on behalf of a
number of investment vehicles in the oil and gas and venture capital sectors in
a manner similar to that for which RRP serves on behalf of the
Fund.





Projects and
Properties




The following table is a summary of the
Fund’s investment portfolio as of December 31, 2007 detailing the nature of the
business, the portion of the investment owned by the Fund and the number of
projects in each investment.




Company
            No. of
Sites
            Fund
              Interest
            Leased/
              Owned1
            Purpose
            Structure2Ridgewood Egypt3
            19
locations
            68.1%
            Leased
            1 – Power only
              10 – Water
      only
              8 – Water &power
            Block/slabUS
      Hydro4
            7 locations
            70.8%
            Leased and
              owned
            Hydro-electric
              generation
            Integral to
      river
              dams





1
            Refers to the
      locations on which the Fund’s projects are located and not the projects
      themselves.





2
            Describes the
      type of structure in which the projects of the Fund are
      housed.





3
            Co-owned with
      Ridgewood Electric Power Trust V (“Trust V”) (14.1%) and the RidgewoodEgyptFund
      (“EgyptFund”) (17.8%). All Egyptian sites are located on or near theRed
      Sea.





4
            Co-owned with
      Trust V (29.2%). Six US Hydro sites are located on the Eastern Seaboard of
      theUnited
      Statesand one inCalifornia.





RidgewoodEgypt





In 1999, the Fund and Trust
V jointly formed and funded Ridgewood Near East Holdings LLC (“NEH”) to
develop electric power and water purification plants for resort hotels along the
Red Sea inEgypt. In 2000, the Fund made additional
investments and acquired majority ownership of NEH, which wholly owns RidgewoodEgyptFor Infrastructure, LLC (Egypt) (“REFI”). In 2001, the Egypt Fund, an
affiliate of Trust V and the Fund, made contributions to NEH in exchange for a
minority interest.





In December 2001, NEH, through REFI,
purchased a 28% equity interest in Sinai For Environmental Services S.A.E.
(“Sinai”), which owns a 5,500 cubic meters (1.5 million gallon) per day water
desalinization plant inEgypt. In February 2002, REFI made an
additional investment to increase its ownership to 53% and gain control of
Sinai.During2006,REFI was granted an additional interest
in Sinai in return for having provided Sinai with certain machinery and
equipment bringing its total ownershipto66.4%.





The
facilities of REFI source feedwater from shallow wells or directly from theRed
Seaand
use reverse osmosis filtration to produce potable water for sale. Certain of the
facilities of REFI are located on or adjacent to their hotel customers while
others are stand-alone facilities that deliver product water by pipeline. The
facilities of REFI are modular and mobile and can be relocated to accommodate
shifts in demand. As of December 31,2007,
REFI owns one project that supplies only electricity, ten that provide only
potable water and eight that provide both water and electricity generation. The
projects generally sell their output under contracts and other arrangements at
prevailing market rates. REFI has the capacity to make 23,600 cubic meters
(approximately 6.2 million gallons) per day of potable water and 23.8MW of
electricity. As a matter of operational management, REFI has a practice of
continual evaluation of its projects and relocates capacity between
locationsin order to meet changes in demand from its customers. The electricity
generating capacity of REFI is used primarily by its own water treatment plants
thereby displacing electricity the water plants would otherwise have to purchase
from third parties. This arrangement helps the Fund control costs and increase
reliability. The business of REFI is managed and operated by employees of REFI,
with its main office located inCairo,Egypt.




A portion
of the assets of Sinai are collateral for a Sinai bank term loan
facility.


2
 Table of Contents




US
Hydro





As a result of transactions with
Synergics, Inc., that occurred from April 2000 through November 2002, the Fund
and Trust V acquired seven hydro-electric generating facilities with an
aggregate of 15MW of generating capacity and notes receivable to be repaid from
the output of an additional project with 4MW of generating capacity. US Hydro
has since reached a settlement eliminating the notes
receivable.





As of December 31, 2007, four projects
sold their electric output to local utilities pursuant to power contracts
and three sold electrical output at open market prices. Three of the
projects are located inVirginia, two are located inNew York, one project is located inCaliforniaand one project is located inRhode Island. The projects are managed by RPM under
an operations and maintenance agreement that provides for US Hydro to pay the
actual cost of project operations and maintenance along with an allocation of
actual overhead to provide for administrative services.





RidgewoodUK





In May 1999, Ridgewood UK, LLC (“RUK”)
was formed as a New Jersey limited liability company and was re-domiciled to
Delaware in December 2002. Prior to February22, 2007,RUK, through its subsidiary, CLPE
Holdings Limited (“CLP”), was in the business of extraction of
methane-containing gas from landfill sites in England, Scotland and Wales, the
use of that gas as fuel for generating electricity and the sale of that
electricity.





On January 23, 2007, RUK entered into a
sale agreement (the “Sale Agreement”) alongwith ArbutusEnergy Ltd. (Jersey)(“Arbutus”), and Ridgewood ROC 2003 LLC
(“ROC I”), Ridgewood ROC II 2003 LLC (“ROC II”), Ridgewood ROC III 2003 LLC (“ROC III”),
Ridgewood ROC IV 2004 LLC (“ROC IV”), and together with ROC I, ROC II and ROC
III (the “Ridgewood ROCs”), each of which is a wholly-owned subsidiary of a
corresponding Ridgewood Renewable PowerBank Fund (the “PowerBank Funds”), as
sellers (collectively, the “Sellers”), with MEIF LG Energy Limited (the
“Buyer”), as the purchaser.





On February 22, 2007, RUK completed the
sale (the “Sale”) ofall of the issued and outstanding shares
ofCLP (the “Shares”) to the Buyer.Under the Sale Agreement,theBuyer acquired (i) 100% of the Shares
from RUK and Arbutus, and (ii) substantiallyall of the assets (the “Assets”) of the
PowerBank Funds. The Assets and the Shares constitute all the landfill gas
business located in theUnited Kingdomof the Fund, Trust V and the PowerBank
Funds.





The Sellers gave a number of warranties
and indemnities to the Buyer in connection with theSalethat it consideredtypical of such transactions. Should
there be a breach of the warranties or should an indemnifiableevent occur, the Buyer
could make claims against the Sellers,including the Fund. Management of the
Fund does not believe there is a material likelihood that such a claim will arise or
that, should such a claim arise, the Fund would incur a material liability. This
belief is based, in part, on theSellers havingpurchased warranty and indemnity
insurance to minimize such risk.There are no current plans to reserve or
provide an escrow for the contingent liabilities represented by those warranties
and indemnities.As of the
date of this filing, the Fund is not aware of anysuchclaims.





SignificantCustomer





During 2007 and 2006, the Fund’s largest
customer, PacifiCorp,accountedfor 10.4% and22.1%of total revenues,
respectively.





Business Segments





The Fund
manages and evaluates its operations in two reportable business segments: power
generation and water desalinization. These segments have been classified
separately by the similarities in economic characteristics and customer base.
Common services shared by the business segments are allocated on the basis of
identifiable direct costs, time records or in proportion to amounts invested.
The water segment is located in Egypt.


3
 Table of Contents




For financial information regarding the
Fund’s business segments, see Note 14 to the Fund’s consolidated financial
statements which appears elsewhere in this Annual Report on
Form 10-K.





Project Feedstock/Raw
Materials





Each project of the Fund converts a raw
material into a finished product and the arrangements for obtaining these raw
materials are a key element in the business of the Fund.





The Egyptian water projects rely on two
feedstocks for their output. The first is feedwater which can come either from
shallow wells along the Red Sea coast or from theRed Seaitself and, in all cases, from a source
nearby the plant that processes the feedwater. In the case of well water, the
feedwater is typically brackish, meaning that it has a briny character but does
not have as many impurities (primarily salts) as seawater. The feedwater is
processed through reverse osmosis filtration so that a portion becomes fresh or
“product” water, which is sold, and the remainder becomes reject water which
must be disposed of either by returning it to theRed Seaor by injecting it into wells designed
for the purpose. As a general matter, the more the feedwater is like fresh
water, the lower the processing cost and the greater the portion that becomes
product water. Though the quality varies depending on location, well water is
generally preferred to seawater. Seawater must undergo pre-treatment before
being processed using reverse osmosis. In order to obtain good quality feedwater
wells and suitable reject water wells, NEH must negotiate with parties owning
water rights. A variety of payment arrangements exist as a result of these
negotiations.





The Egyptian water projects also need
electricity to run the high compression pumps that operate the reverse osmosis
processing equipment. In most of its projects, REFI generates its own
electricity using diesel-fired reciprocating engine generators. Diesel fuel and
electricity are subsidized commodities inEgyptand are readily available. In other
cases, electricity is purchased either from the local electricity grid or from
the on-site generation of REFI’s hotel customers. In cases where a project
purchases electricity from a host hotel or customer, the value of the
electricity is deducted from the price of water purchased by the customer. These
are negotiated transactions that reflect prevailing market rates for the
commodities involved. About 65% of the capacity of the REFI projects generate
their own electricity and the remainder purchase electricity from third parties.
TheEgyptprojects do not maintain material
amounts of either raw materials or product water
inventories.





The projects of US Hydro are all located
on, and are integral parts of, dams on river ways. Of the seven US Hydro
projects, five are considered run-of-river, meaning that they generate such
electricity as the natural flow of the river will produce with little or no
ability to alter its flow rate or store water up-river of the dam. Output of
these projects (and hence revenue) is characterized by high degrees of
variability and seasonality. The other two projects of US Hydro are associated
with dams used to create reservoirs that store water, which tends to make
production from the generating facility more level. The projects do not make
payments for throughput water.





Competition





Competition in the market for providing
potable water to hotel resort developments is primarily driven by obtaining
supply agreements and the rights to locate on the site of a customer. Secondary
competitive factors are price, service and reliability of supply. Once a supply
relationship has been established with a customer, a supplier is very difficult
for a competitor to dislodge.





The majority of the power generated from
US Hydro is sold pursuant to long-term contracts, and as a result, these
facilities do not face competition in the sale of their finished
product.





Seasonality/Weather
Effects




Demand for the output of theEgyptprojects is largely driven by the
occupancy levels of the hotels for the projects and the occupancy rates for
hotels in theRed
Seatourist areas are
subject to highly seasonal patterns. The high season forRed Seatourism is, broadly, from late April to
mid-September with a trough in occupancy rates in January and February. The
volume and price of the output of REFI generally track these patterns and
management of REFI takes advantage of the troughs in demand to perform
maintenance of its projects.




The output of the US Hydro power
generation projects is affected by seasonal weather patterns including rainfall
and snowpack runoff. These factors tend to concentrate the output of these
projects in the spring and fall with little or no output in the winter and
summer months. Management of these sites takes advantage of these patterns to
perform maintenance during periods of low output. Because river flows are the
dominant factor in determining the output of these projects, output can vary
widely from year-to-year based on amounts of rain and
snowfall.


4
 Table of Contents





Government Incentives and
Regulation




At the inception of the NEH business,
there was little development along theRed Seaand parties making investments in these
areas were eligible for 10-year income tax holidays. REFI qualified for such an
income tax holiday, which commenced on January 1, 2001 and will run through
December 31, 2010. The projects of REFI are subject to routine regulatory
oversight, which is executed mostly at the local level and consists primarily of
zoning and work-place safety regulations that the Fund does not consider
onerous.




The US Hydro projects operate under
Qualifying Facility Certifications issued by the Federal Energy Regulatory
Commission. Even though US Hydro has no employees, it is affected by general
employment regulations in the jurisdictions of their facilities through the RPM
operations and maintenance agreements. The Fund considers these regulations to
be routine and does not consider the cost of compliance to be
material.




Financing
Arrangements




The Fund uses debt to finance certain of
the acquisitions and the operation of certain of its investments. Such financing
arrangements are specific to the investment financed and are made at the
operating company level. These financing arrangements are non-recourse to the
Fund and the Fund provides no guarantees of the amounts borrowed under such
financing arrangements.




Insurance




The Fund has in place, either directly
or through investee companies, insurance typical for activities such as those
conducted by the Fund. These policies include property and casualty, business
interruption, workman’s compensation and political risk, which the Fund believes
to be appropriate.




Employees




The Fund does not have employees. The
activities of the Fund are performed either by employees of the Managing
Shareholder, its affiliates or those of the specific investments of the
Fund.





Offices




The principal office of the Fund is
located at1314 King
Street,Wilmington,Delaware,19801and its phone number is 302-888-7444.
The Managing Shareholder’s principal office is located at947 Linwood Avenue,Ridgewood,New Jersey,07450and its phone number is
201-447-9000.





ITEM 1A. RISKFACTORS




In addition to the other information set
forth elsewhere in this report, you should carefully consider the following
factors when evaluating the Fund:




RISKS INHERENT IN THE BUSINESSES OF THE
FUND




The Fund’s investment in the Egyptian
water desalinization business depends on the willingness and ability of tourists
to travel to the EgyptianRed Searesort areas. Factors that reduce that
tourism, including acts of terrorism, could have an adverse impact on the
business of the Fund.





REFI serves remote hotel resort
communities that depend on the willingness and ability of tourists to make
discretionary journeys to the Egyptian Red Sea areas. Factors decreasing the
willingness or ability of tourists to make these journeys will reduce the demand
for the output of the water projects of the Fund. These factors include, but are
not limited to, acts of terrorism, the cost of travel to the area and general
tourism industry trends. The resort areas ofEgypthave experienced acts of terrorism in
the past and it is possible that such acts could result in dramatically reduced
tourism to the area which would likely have an adverse impact on the output
quantity and price of the Fund’s products. Material increases in the cost of
travel to the area for reasons such as increases in airfares, taxes or
accommodations or other unrelated changes in traveler preferences can also
adversely affect the demand for the products of REFI. The projects of REFI have
no alternative markets for their products.


5
 Table of Contents





The Fund’s hydro-electric business can
be affected by adverse weather conditions.




The US Hydro projects rely on rainfall
and snowfall to provide water flow for electricity production. Rainfall and
snowfall vary from year-to-year and an extended period of below-normal rainfall
and/or snowfall would significantly reduce electricity revenue. Each project is
entirely dependent on the water flow through where it is
located.





The Fund has a significant portion of
its investments located outside theUnited Statesthat can be affected by events beyond
the Fund’s control.




The Fund has a significant investment inEgypt, and as a result, the Fund is subject
to certain foreign-related risks, including changesindomestic andforeigngovernment regulations, licensing
requirements, tariffs or taxes and other trade barriers, exchange controls,
expropriation, and political and economic instability, including fluctuations in
the value of foreign currencies. Certain of these risks may be greater than
those commonly experienced in theUnited States. The exchange rate from local
currencies to US dollars may be so unfavorable that the Fund may experience
negative net results, when measured in US dollars, even though the performance
of the Egyptian business may be successful when measured in its local currency.
Also, fluctuations in foreign currencies could reduce the value of or the
ability of the Fund to make distributions to its
shareholders.





The operations of the Fund have limited
capital and have limited access to new capital.





The Fund’s investments, but not the Fund
itself, utilize debt financing. Debt financing could increase the variability of
results and increases the financial risk of the Fund. In such cases, the
rights of the Fund to the cash flow of the projects would typically be
subordinated to the obligations of the projects under the debt facilities, which
could limit the Fund’s ability to receive cash distributions from its
investments.





The operations of the Fund may
experience competitive price pressure and competition for project development
opportunities.




Competition for new project
opportunities is based largely on price, service and reliability. While it is
difficult to displace the existing projects of the Fund from their customers,
competition exists for new projects and this competition may, in some
circumstances, drive down the prices of the products and services offered by the
Fund’s projects or drive up the costs of its feedstock
resources.




The Fund may experience delays and cost
overruns in the development of new projects.




As an integral part of its Egyptian
business, the Fund identifies, develops and constructs new projects. These
processes are inherently uncertain and prone to unforeseen delays and costs
which can adversely impact the revenues, expenses and cash flow of the Fund by
making completed projects less economically attractive than they were expected
to be at the time a commitment was made to building the project. This can also
result in the abandonment or liquidation of projects prior to
completion.




The projects of the Fund depend on the
near-continuous operation of their equipment. Should the productivity of some or
all of this equipment be compromised or should the equipment fail altogether,
the Fund would be adversely affected. The Fund may also experience difficulty in
hiring qualified operating personnel.




The primary equipment of the Fund
includes reverse osmosis water purification equipment, reciprocating engine
generator sets, water pumping stations and hydro-electric generating equipment.
This equipment is subject to mechanical failure that the Fund may not be able to
predict and that can render specific projects inoperable for considerable
periods of time. This risk also extends to failures of the electricity grid near
the Fund’s projects that could prevent the affected project or projects from
delivering its electricity. In addition, the Fund may experience price increases
for, or difficulty in obtaining, spare parts for its projects and in identifying
and hiring personnel qualified to operate, maintain and repair the specialized
equipment that makes up parts of its projects.





The projects of the Fund are subject to
regulatory changes (including changes in environmental regulations) that could
significantly reduce revenues or increase expenses of the
Fund.




Regulatory changes, such asthe ability of the Egyptian projects to
discharge the reject water that is a byproduct of the purification processand provision for fish
passage in US Hydro projects, could impact the operations of the Fund’s
projects.Such changes
could increasecosts at the
affected projects or prevent certain projects from
operating.


6
 Table of Contents





REFI must arrange for feedwater, for the
disposal of reject water and for a supply of electricity to operate its
projects.




REFI depends on third party owners of
water rights to source feedwater for their facilities and for the discharge of
reject water that is a byproduct of the reverse osmosis process. Should this be
restricted, not possible or the price increases significantly, the profitability
of the affected sites would be reduced. The REFI projects also depend on third
party supply of diesel fuel for electricity generation at certain projects and
third party supply of electricity at others. Restrictions of availability of
these commodities or significant increases in prices would have a negative
impact on the affected projects and the Fund.




The Fund is, and may
in the future become, involved in litigation that may be resolved
unfavorably.




TheFundfaces an inherent business risk of
exposure to various types of claims and lawsuits that may arise in the ordinary
course of business. Although it is not possible to predict the timing, nature or
outcome of such claims or lawsuits should they arise, any such claims or
proceedings, or any claim or proceeding discussed herein under Item 3. “Legal
Proceedings”, may be disposed of unfavorably to theFund. An unfavorable ruling could include
money damages or injunctive relief and could result in a material adverse impact
on theFund's business or financial condition.
Generally, for accounting purposes, theFund’s results of operations would be
impacted for the period in which the matter is ultimately resolved unfavorably
to theFundor an unfavorable outcome becomes
probable and reasonably estimable. In addition, while theFundmaintains insurance coverage with
respect to certain claims, theFundmay not be able to obtain such
insurance on acceptable terms in the future, if at all, and any such insurance
may not provide adequate coverage against any such claims.




RISKS RELATED TO THE NATURE OF THE
FUND’S SHARES




The Fund’s shares have severe
restrictions on transferability and liquidity and shareholders are required to
hold the shares indefinitely.




The Fund’s shares are illiquid
investments. There is currently no market for these shares and one is not likely
to develop. Because there may be only a limited number of persons who purchase
shares and because there are significant restrictions on the transferability of
such shares under the Fund’s Declaration of Trust and under applicable federal
and state securities laws, it is expected that no public market will develop.
Moreover, neither the Fund nor the Managing Shareholder will provide any market
for the shares. Shareholders are generally prohibited from selling or
transferring their shares except in the circumstances permitted under the
Declaration of Trust and applicable law, and all such sales or transfers require
the Fund’s consent, which it may withhold at its sole discretion. Accordingly,
shareholders have no assurance that an investment can be transferred and must be
prepared to bear the economic risk of the investment
indefinitely.




Shareholders are not permitted to
participate in the Fund’s management or operations and must rely exclusively on
the Managing Shareholder.




Shareholders have no right, power or
authority to participate in the Fund’s management or decision making or in the
management of the Fund’s projects. The Managing Shareholder has the exclusive
right to manage, control and operate the Fund’s affairs and business and to make
all decisions relating to its operation.




TheFund’s assets are generally illiquid and any
disposition ofFundassets is at the discretion of the
Managing Shareholder.




TheFund’s interest in projects is illiquid. The
Managing Shareholder has full discretion to determine whether any project, or
any partial interest, should be sold and the terms and conditions under which
such project would be sold. Consequently,subject to shareholder approvals as
detailed inthe Declaration
ofTrust, shareholderswill depend on the Managing
Shareholder for the decision to sell all or a portion of an asset, or retain it,
for the benefit of the shareholders and for negotiating and completing the sale
transaction.




The Fund indemnifies its officers, as
well as the Managing Shareholder and its employees, for certain actions taken on
its behalf. Therefore, the Fund has limited recourse relative to these
actions.




The Declaration of Trust provides that
the Fund’s officers and agents, the Managing Shareholder, the affiliates of the
Managing Shareholder and their respective directors, officers and agents when
acting on behalf of the Managing Shareholder or its affiliates on the Fund’s
behalf, will be indemnified and held harmless by the Fund from any and all
claims rising out of the Fund’s management, except for claims arising out
of bad faith, gross negligence or willful misconduct or a breach of the
Declaration of Trust. Therefore, the Fund may have difficulty sustaining an
action against the Managing Shareholder, or its affiliates and their officers
based on breach of fiduciary responsibility or other obligations to the
shareholders.




7
 Table of Contents





The Managing Shareholder is entitled to
receive a management fee regardless of the Fund’s profitability and also
receives cash distributions.




The Managing Shareholder is entitled to
receive an annual management fee from the Fund regardless of whether the Fund is
profitable in that year. The annual fee, payable monthly, is equal to 2.5% of
total capital contributed by shareholders. In addition to its annual management
fee, the Managing Shareholder, as compensation for its management services, will
receive 25% of the Fund’s cash distributions to shareholders upon the
shareholders having received a certain minimum level of distributions as set out
in the Declaration of Trust, even though the Managing Shareholder has not
contributed any cash to the Fund. Accordingly, shareholders contribute all of
the cash utilized for the Fund’s investments and activities. If the Fund’s
projects are unsuccessful, the shareholders may lose 100% of their investment
while the Managing Shareholder will not suffer any investment losses because it
did not contribute any capital. None of the compensation to be received by the
Managing Shareholder has been derived as a result of arm’s length
negotiations.





Cash distributions are not guaranteed
and may be less than anticipated or estimated.




Distributions depend primarily on
available cash from project operations. At times, distributions have been
delayed to repay the principal and interest on project or Fund borrowings, if
any, or to fund other costs. The Fund’s taxable income will be taxable to the
shareholders in the year earned, even if cash is not
distributed.




Because the Managing Shareholder manages
other electricity generation and infrastructure funds, it may have conflicts of
interest in its management of the Fund’s operations.




Shareholders will not be involved in the
management of the Fund’s operations. Accordingly, they must rely on the Managing
Shareholder’s judgment in such matters. Inherent with the exercise of its
judgment, the Managing Shareholder will be faced with conflicts of interest.
While neither the Fund nor the Managing Shareholder have specific procedures in
place in the event of any such conflicting responsibilities, the Managing
Shareholder recognizes that it has fiduciary duties to the Fund in connection
with its position and responsibilities as Managing Shareholder and it intends to
abide by such fiduciary responsibilities in performing its duties. Therefore,
the Managing Shareholder and its affiliates will attempt, in good faith, to
resolve all conflicts of interest in a fair and equitable manner with respect to
all parties affected by any such conflicts of interest. However, the Managing
Shareholder is not liable to the Fund for how conflicts of interest are resolved
unless it has acted in bad faith, or engaged in gross negligence or willful
misconduct.





TAX RISKS ASSOCIATED WITH AN INVESTMENT
IN SHARES




The Fund is organized as aDelawaretrust and the Managing Shareholder has
qualified the Fund as a partnership for federal tax purposes. The principal tax
risks to shareholders are that:




·
            The Fund may
      recognize income taxable to the shareholders but may not distribute enough
      cash to cover the income taxes owed by shareholders on the Fund’s taxable
      income.




·
            The allocation of
      Fund items of income, gain, loss, and deduction may not be recognized for
      federal income tax purposes.




·
            All or a portion
      of the Fund’s expenses could be considered either investment expenses
      (which would be deductible by a shareholder only to the extent the
      aggregate of such expenses exceeded 2% of such shareholder’s adjusted
      gross income) or as nondeductible items that must be
      capitalized.




·
            All or a
      substantial portion of the Fund’s income could be deemed to constitute
      unrelated business taxable income, such that tax-exempt shareholders could
      be subject to tax on their respective portions of such
      income.




·
            If any Fund
      income is deemed to be unrelated business taxable income, a shareholder
      that is a charitable remainder fund could have all of its income from any
      source deemed to be taxable.




·
            All or a portion
      of the losses, if any, allocated to the shareholders will be passive
      losses and thus deductible by the shareholder only to the extent of
      passive income.




·
            The shareholders could have
      capital losses in excess of the amount that is allowable as a deduction in
      a particular year.


8
 Table of Contents




Although the Fund has obtained an
opinion of counsel regarding the matters described in the preceding paragraph,
it will not obtain a ruling from the IRS as to any aspect of the Fund’s tax
status. The tax consequences of investing in the Fund could be altered at any
time by legislative, judicial, or administrative action.





If the IRS audits the Fund, it could
require investors to amend or adjust their tax returns or result in an audit of
their tax returns.




The IRS may audit the Fund’s tax
returns. Any audit issues will be resolved at the Fund level by the Managing
Shareholder. If adjustments are made by the IRS, corresponding adjustments will
be required to be made to the federal income tax returns of the shareholders,
which may require payment of additional taxes, interest, and penalties. An audit
of the Fund’s tax return may result in the examination and audit of a
shareholder’s return that otherwise might not have occurred, and such audit may
result in adjustments to items in the shareholder’s return that are unrelated to
the Fund’s operations. Each shareholder bears the expenses associated with an
audit of that shareholder’s return.




In the event that an audit of the Fund
by the IRS results in adjustments to the tax liability of a shareholder, such
shareholder will be subject to interest on the underpayment and may be subject
to substantial penalties.




The tax treatment of the Fund cannot be
guaranteed for the life of the Fund. Changes in laws or regulations may
adversely affect any such tax treatment.




Deductions, credits or other tax
consequences may not be available to shareholders. Legislative or administrative
changes or court decisions could be forthcoming which would significantly change
the statements herein. In some instances, these changes could have substantial
effect on the tax aspects of the Fund. Any future legislative changes may or may
not be retroactive with respect to transactions prior to the effective date of
such changes. Bills have been introduced in Congress in the past and may be
introduced in the future which, if enacted, would adversely affect some of the
tax consequences of the Fund.




ITEM 1B.  UNRESOLVED STAFF COMMENTS




Not applicable.





ITEM 2.  PROPERTIES




Information regarding the Fund’s
properties is contained in Item 1. “Business”, under the heading “Projects and
Properties”.




ITEM 3.  LEGAL PROCEEDINGS





On August
16, 2006, the Fund and several affiliated entities, including the Managing
Shareholder, filed lawsuits against the former independent registered public
accounting firm for the Fund and several affiliated entities, Perelson Weiner
LLP (“Perelson Weiner”), in New Jersey Superior Court.  The suit alleged
professional malpractice and breach of contract in connection with audit and
accounting services performed for the Fund and other plaintiffs by Perelson
Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the
Fund and other plaintiffs, alleging breach of contract due to unpaid invoices in
the total amount of approximately $1,188,000. Discovery is ongoing and no trial
date has been set. The costs and expenses of the litigation are being paid for
by the Managing Shareholder and affiliated management companies and not the
underlying investment funds, including the Fund.





On December 30,2005, an investor in the Fund and entities
affiliated with the Fund, Paul Bergeron, on behalf of himself and asTrustee for the Paul BergeronFund(the “Plaintiff”), filed a Complaint in
Suffolk Superior Court, Commonwealth of Massachusetts,Paul
Bergeron v. Ridgewood Electric PowerTrustV,et
al.,SuffolkSuperior Court, Docket No. 07-1205
BLS1(“Bergeron I”).  The action
was brought against, among others, the Managing Shareholder and persons who are
or were officers of the Managing Shareholder alleging violations of the
Massachusetts Securities Act, as well as breach of fiduciary duty, fraud, breach
of contract, negligent misrepresentation and unjust enrichment, all related to a
set of alleged facts and allegations regarding the sale of securities of funds
(including the Fund) managed by the Managing Shareholder or affiliates of the
Managing Shareholder which were sold in private offerings and the operation of
those funds subsequent to the sale.  The Plaintiff is seeking damages
of $900,000 plus interest and other damages to be determined at
trial.




On
January 27,2006,
the Plaintiff, on its own initiative, filed an Amended Complaint and Jury Demand
in Massachusetts Superior Court, adding a non-diverse broker-dealer to the
action.  On February 22,2006,
the case was removed by the defendants to United States District Court for the
District of Massachusetts on the basis of diversity jurisdiction, but the
defendants alleged that the only non-diverse party had been fraudulently joined
by the Plaintiff.  On February 27,2006,
a motion to dismiss was filed by the defendants in the District
Court.  On April 12,2006,
the District Court affirmed its jurisdiction over the case, and dismissed the
non-diverse party.  On January 10, 2007,
the District Court dismissed Plaintiff’s unjust enrichment case, but denied the
motion of the defendants to dismiss as to the remaining
claims.  Presently, attorneys for the parties are involved in
discovery, with a magistrate judge having decided motions to compel brought by
the parties during thesummer
of2007.  A
new scheduling order is in the process of being developed by the parties for
approval by the District Court.Notrial date has been set.


9
 Table of Contents




OnMarch 20, 2007, the Plaintiff commenced a derivative
action, in Suffolk Superior Court,CommonwealthofMassachusetts.Paul
Bergeronv.Ridgewood
Electric Power Trust V,et
al.,SuffolkSuperior Court, Docket No. 07-1205BLS1(“Bergeron II”).  The
Plaintiff joined theFundand affiliated entities, including the
Managing Shareholder and a person who is an officer of the Managing Shareholder,
alleging that the allocation of the proceeds from the sale of certain assets of
theFundand affiliated entities to an
unaffiliated entity was unfair and sought an injunction prohibiting the
distribution to shareholders of such proceeds.For a description of the sale
transaction, see Item 1. “Business – Projects and Properties -RidgewoodUK”.The Superior Court denied the request by
the Plaintiff for an injunction.  The case was then removed by the
defendants to the same District Court as Bergeron I, but the District Court
remanded the case to Massachusetts Superior Court onJuly 5, 2007, where it is presently
pending.  On February 29, 2008, the Plaintiff filed an amended
complaint in Bergeron II adding two additional investors, one in Trust V and one
intheFund, as additional
plaintiffs.  OnMarch 12, 2008, the defendants’ Motion to Dismiss
Bergeron as a plaintiff in the Bergeron II matter due to potential conflicts he
has with the Bergeron I matter was denied by the Superior Court. Discoveryis ongoing and
notrial date has been
set.




All defendants in Bergeron I and
Bergeron II deny the allegations and intend to defend both actions
vigorously.




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS




None.





PART II





ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SECURITY HOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES




Market Information





There has never been an established
public trading market for the Fund’s Investor Shares.





Holders





As of January 31, 2008, there were1,345holdersof Investor Shares.





Dividends





Fund distributions for the years ended
December 31, 2007 and 2006 were as follows (in thousands, except per share
data):





2007
            
            
            2006Distributions to
      Investors
            
            $
            14,151
            
            
            $
            1,645Distributions per Investor
      Share
            
            
            21,500
            
            
            
            2,500Distributions to Managing
      Shareholder
            
            
            3
            
            
            
            17





ITEM 6.  SELECTED FINANCIAL DATA





Not required.





ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS




The following discussion and analysis
should be read in conjunction with theFund’s Consolidated Financial Statements and
Notes which appear elsewhere in this Annual Report on Form 10-K. This
discussion contains forward-looking statements that involve risks, uncertainties
and assumptions. TheFund’s actual results could differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including those set forth in Item 1A. “Risk
Factors” and elsewhere in this Annual Report on
Form 10-K.


10
 Table of Contents
  Overview





The Fund is aDelawaretrust formed on February 18, 1997
primarily to make investments in projects and businesses in the energy and
infrastructure sectors both in theUSand abroad. RRP, aNew Jerseylimited liability company, is the
Managing Shareholder. As the Managing Shareholder, RRP has direct and exclusive
control over the management and operations of the Fund.




The Fund has focused primarily on
small-scale electricity generation projects using renewable sources of fuel and
on water treatment facilities in remote locations serving hotel resort
developments. These projects allow the Fund to develop secure long-term
positions in attractive specialty markets for products and services provided by
its projects and companies. As of December 31, 2007, the projects in which the
Fund has investments were locatedin theUnited StatesandEgypt. As of that date, the Fund had
investments inhydro-electricgenerating projects in the US with total capacity of
15MW, and in projects in
Egypt with the capacity to produce approximately 29,100 cubic meters
(approximately 7.7 million gallons) of potable water per day and electricity
generating capacity of 23.8MW.The Fund previously owned landfill
gas-fired electric projects located in theUnited Kingdom, which were sold in February
2007.





The Fund’s accompanying
consolidated financial statements include the accounts of the Fund and its
majority-owned subsidiaries. The Fund’s consolidated financial statements also
include the Fund’s 30.4% interest in RUK, which is accounted for under the
equity method of accounting, as the Fund has the ability to exercise significant
influence, but does not control the operating and financial policies of
RUK.





The Fund owns a 70.8% interest in US
Hydro and the remaining 29.2% minority interest is owned by Trust V. In
addition, the Fund owns 68.1% interest in NEH and the remaining minority
interests are owned by Trust V (14.1%) and Egypt Fund (17.8%). The interests of
Trust V and Egypt Fund are presented as minority interests in the consolidated
financial statements of the Fund.




The Fundgenerates its revenues
from the generation of electricity and the production of fresh water. For the
years ended December 31, 2007 and 2006, 74.8% and60.4% of its
consolidated revenues, respectively, were derived from water production and the
balance was from electricity generation. Subject to the potential sales of the
Fund's businesses, management of the Fund expects the proportion of revenue
generated from water production to continue to increase.





The Managing Shareholder announced that
it intends to market theassets of NEH and US Hydro for
sale. These assets
represent the remaining investments of the Fund.





Critical Accounting Policies and
Estimates





The discussion and analysis of the
Fund’s financial condition and results of operations are based upon the Fund’s
consolidated financial statements, which have been prepared in conformity with
accounting principles generally accepted in theUnited States of America. In preparing these financial
statements, the Fund is required to make certain estimates, judgments and
assumptions. These estimates, judgments and assumptions affect the reported
amounts of the Fund’s assets and liabilities, including the disclosure of
contingent assets and liabilities, at the date of the financial statements and
the reported amounts of the Fund’s revenues and expenses during the periods
presented. The Fund evaluates these estimates and assumptions on an ongoing
basis. The Fund bases its estimates and assumptions on historical experience and
on various other factors that the Fund believes to be reasonable at the time the
estimates and assumptions are made. However, future events and their effects
cannot be predicted with absolute certainty. Therefore, the determination of
estimates requires the exercise of judgment. Actual results may differ from
these estimates and assumptions under different circumstances or conditions, and
such differences may be material to the financial statements. The Fund believes
the following critical accounting policies affect the more significant estimates
and judgments in the preparation of the Fund’s consolidated financial
statements.





Revenue Recognition





Revenues
generated from the sale of electric power are recorded in the month of
delivery, based on the estimated volumes sold to customers. Revenues
generated from the sale of fresh water are recorded in the month of delivery,
based on actual volumes sold to customers.Power generation revenue
adjustments are made to reflect actual volumes delivered when the actual
volumetric information subsequently becomes available.Billingsto
customers for power generation generally occurs during the month following
delivery. Final billings did not vary significantly from
estimates.





Accounts Receivable





Accounts
receivable are recorded at invoice price in the period the related revenues are
earned, and do not bear interest. The Fund maintains an allowance for doubtful
accounts for estimated uncollectible accounts receivable. The allowance is based
on the Fund’s assessment of aged accounts, historical experience, and other
currently available evidence of the collectability and the aging of accounts
receivable. Account balances are charged off against the allowance when the Fund
believes it is probable that the receivable will not be
recovered.


11
 Table of Contents




Property, Plant and
Equipment





Property, plant and equipment,
consisting of land, hydro-electric generation facilities, water desalinization
facilities and office equipment, are stated at cost less accumulated
depreciation. Renewals and betterments that increase the useful lives of the
assets are capitalized. Repair and maintenance expenditures are expensed as
incurred. Upon retirement or disposal of assets, the cost and related
accumulated depreciation are removed from the consolidated balance sheet. The
difference, if any, between the net asset value and any proceeds from such
retirement or disposal is recorded as a gain or loss in the consolidated
statement of operations.





Depreciation is recorded using the
straight-line method over the useful lives of the assets, which ranges from 5 to
30 years.





Impairment of Goodwill, Intangibles and
Long-Lived Assets





The Fund evaluates intangible assets and
long-lived assets, such as property, plant and equipment, when events or changes
in circumstances indicate that the carrying value of such assets may not be
recoverable. The determination of whether impairment has occurred is made by
comparing the carrying value of an asset to the estimated undiscounted cash
flows attributable to that asset. If impairment has occurred, the impairment
loss recognized is the amount by which the carrying value exceeds the estimated
fair value of the asset, which is based on the estimated future cash flows
discounted at the estimated cost of capital.The analysis requires
estimates of the amount and timing of projected cash flows and, where
applicable, judgments associated with, among other factors, the appropriate
discount rate. Such estimates are critical in determining whether any impairment
charge should be recorded and the amount of such charge if an impairment loss is
deemed to be necessary.





The Fund evaluates goodwill and
intangible assets with indefinite useful lives under Statement of Financial
Accounting Standards (“SFAS”) No. 142,Goodwill and Other
Intangible Assets(“SFAS
142”). Under SFAS 142,
goodwill and intangible assets with indefinite lives are subject to annual
impairment tests through a comparison of fair value to carrying value. The
two-step approach to assess a reporting unit’s goodwill impairment requires that
the Fund first compare the estimated fair value of a reporting unit which has
been assigned to goodwill to the carrying amount of the unit’s assets and
liabilities, including its goodwill. If the fair value of a reporting unit is
below its carrying amount, then the second step of the impairment test is
performed, in which the current fair value of the unit’s assets and liabilities
is used to determine the current implied fair value of the unit’s
goodwill.





Management Fee





TheFundis charged management fees from its
Managing Shareholder. Unpaid management fees accrue interest at 10% per annum.
The Managing Shareholder has periodically waived its right to receive a portion
of the fees and related interest, as well as various professional
service fee reimbursements.
Any waived management fees,interestor reimbursementsare deemed capital contributions at the
time of waiver.The shareholders of theFundother than the Managing Shareholderareallocated 99% of each contribution and
the Managing Shareholderisallocated 1% so that the amount of
the contribution allocated offsetsthe allocation of the recordedexpense.





Income Taxes





US Hydro, for federal income tax
purposes, files on a consolidated basis using the accrual method of accounting
on a calendar year basis. For state income tax purposes, US Hydro files on an
individual entity basis.USHydro uses the liability method in
accounting for income taxes. Deferred income taxes reflects, where required, the
net tax effect of temporary differences arising between the carrying amounts of
assets and liabilities for financial reporting purposes and amounts used for tax
purposes.





The Fund’s Egyptian
subsidiaryhasa ten year income tax holiday that
expires on December 31, 2010.The Fund records deferred tax
liabilities for book to tax differences that are scheduled to exist at the
expiration of the tax holiday.





Except
for the above, no provision is made for income taxes in the accompanying
consolidated financial statements as the income or losses of the Fund are passed
through and included in the income tax returns of the individual shareholders of
the Fund.  As a result, changes in the Fund’s pre-tax income (loss) do
not necessarily lead to changes in income tax expense, thereby resulting in
volatility of the effective tax rate.  US Hydro operates in several tax
jurisdictions and, as a result, the geographic mix of US Hydro’s pre-tax income
or loss can also impact the Fund’s overall effective tax rate.





Foreign Currency
Translation





The
Egyptian Pound is the functional currency of the Fund’s Egyptian operations. The
consolidated financial statements of the Fund’s non-United States
subsidiary are translated into United
Statesdollars. Assets and liabilities are translated into US dollars using the current
exchange rate in effect at the balance sheet date, while revenues and expenses
are translated using the average exchange rate during the applicable reporting
period. The cumulative foreign currency translation adjustment is a component of
other comprehensive income (loss) included in shareholders’
equity.


12
 Table of Contents




Results of
Operations




Revenues increased by $0.2 million, or
1.6%, from $13.5 million in 2006 to $13.7 million in 2007.Revenues from NEH operations increased
$2.1 million to $10.3 million for 2007 from $8.2 million in 2006 primarilyattributable to increase in
water volume sales due to greater tourism in the NEH market area. Revenues from US Hydro operations
decreased $1.9 million to $3.5 million for 2007 from $5.4 million in 2006 as a
result of lower outputs resulting from lower levels of
precipitation.





Gross profit increased by $0.2 million,
or 4.2%, to $4.7 million in 2007 from $4.5 million in 2006. This was primarily
due to an increase in gross profit of NEH operations of $2.1 million due to an
increase in revenue in the 2007 period, offset by a decrease in gross profit of
US Hydro operations of $1.9 million due to a decrease in revenue in the 2007
period.





General and administrative expenses
increased by $2.1 million from $3.1 million in 2006 to $5.2 millionin 2007. The increase was
primarily attributable to an increase in overhead expenses in NEH operations and
higher professional fees.During 2007, the Managing
Shareholder waived its right to receive $0.9 million in professional fee
reimbursement.





The management fee due to theManaging Shareholder of
$1.6 million for 2007 was comparable to the 2006 management fee. The management
fee to the Managing Shareholder is for certain management, administrative and
advisory services and office space to the Fund. In 2007, the Managing
Shareholder waived its right to receive $0.8 million of the management fee,
including related accrued interest.





In 2007, the Fund recorded equity income
of $16.4 million from its investment in RUK compared to a loss of $0.1 million
in 2006. During the first quarter of 2007, RUK completed theSaleof all of the issued and outstanding
shares of CLP to MEIF LG Energy Limited. See Item 1. “Business” for further
discussion of the sale.





In 2006, the Fund recorded income tax
benefitof $0.1 million
compared to $0.5 million in 2007. The increase in income tax benefit was
primarily attributable to the recognition of timing differences between book and
tax basis resulting from depreciation and amortization expense of US Hydro
assets partially offset by the recording ofdeferred tax liabilitiesrelating to book and tax differences of
Egyptian assets.





Liquidity and Capital
Resources





At December 31, 2007, the Fund had cash
and cash equivalents of $4.3 million, an increase of $1.7 million from December
31, 2006. The cash flows for 2007 were $2.6 million provided by operating
activities, $14.2 million provided by investing activities, $15 million used in
financing activities and a $0.1 million negative effect of foreign exchange on
cash and cash equivalents.





In 2007, the Fund’s operating activities
generated cash of $2.6 million compared to $5.1 million in 2006, a decrease of
$2.5 million, primarily due to an increase in loss from operations in 2007
compared to 2006.





In 2007, investing activities provided
cash of $14.2 million compared to $0.5 million cash used in 2006. In 2007, the
Fund generated cash of $15.7 million from distributions from RUK relating to the
Sale of CLP, partially offset by $1.6 million cash used on capital expenditures.
In 2006, the Fund used $0.7 million of cash for capital expenditures and
collected $0.1 million on notes receivable.





In 2007, the Fund used approximately $15
million of cash in financing activities, which represents $14.2 million used for
cash distributions to shareholders and $0.9 million used for repayments under a
bank loan. In 2006, the Fund used $3.9 million of cash in financing activities,
which represents $1.2 million used for repayments under the bank loan and $2.7
million of cash distributions to shareholders and minority
interest.





Future Liquidity and Capital Resource
Requirements




The Fund expects cash flows from
operating activities, along with existing cash, cash equivalents and borrowing
capabilities will be sufficient to provide working capital and fund capital
expenditures for the next 12 months.




13
 Table of Contents




Off-Balance Sheet
Arrangements





None.





Contractual Obligations and
Commitments





The following table provides a summary
of the Fund’s share of contractual obligations as of December 31, 2007 (dollar
amounts in thousands).




Payments due by period as of
      December 31, 2007Less than
            
            
            
            
            
            
            
            
            More than1 Year
            
            
            1-3 Years
            
            
            3-5 Years
            
            
            5 Years
            
            
            TotalLong-term debt-Sinai(1)
            
            $
            387
            
            
            $
            1,134
            
            
            $
            315
            
            
            $
            -
            
            
            $
            1,836Minimum lease payment(2)
            
            
            710
            
            
            
            1,452
            
            
            
            499
            
            
            
            4,266
            
            
            
            6,927Consulting agreement settlement(3)
            
            
            92
            
            
            
            213
            
            
            
            260
            
            
            
            656
            
            
            
            1,221Total
            
            $
            1,189
            
            
            $
            2,799
            
            
            $
            1,074
            
            
            $
            4,922
            
            
            $
            9,984





(1)The Sinai loan bears interest at 11.0%
per annum. The provision of the loan restricts Sinai from paying dividends to
its shareholders or obtaining credit from other banks. At December 31, 2007,
Sinai was in compliance with the terms of its loan.





(2)The facility atUnionFallshas leased the site at
its facility under a non-cancelable long-term lease which terminates in 2024.
Rent expense on a straight-line basis at this sitewas $295
forthe
year ended December 31, 2007. The facility of US Hydro at theBoxCanyondam inSiskiyou
County,Californiais owned subject to a
ground lease which the Fund treats for financial reporting purposes as an
operating lease. The lease terminates on December 31, 2010, at which time the
Fund is obligated to transfer the facility at the site to the Siskiyou County
Flood Control and Water Conservation District. The lease payment forBoxCanyonwas$500 for
theyear
ended December 31, 2007.





(3)In April 2005, NEH agreed to a
settlement with a consultant, whereby NEH will make quarterly payments of $30
for as long as theEgyptprojects remain operational. In the
event that theEgyptprojects are sold, an amount equal to
the present value of the subsequent ten years of payments would be made in
settlement of the remaining obligation. In addition, in November 2003, NEH
agreed to a settlement with a consultant, whereby NEH made a single payment of
$281 and will make monthly installment payments of $8, until June
2013.





Recent Accounting
Pronouncements





FIN 48





In June
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48,Accounting for
Uncertainty in Income Taxes (“FIN 48”), an interpretation of SFAS No.
109, Accounting for Income
Taxes(“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial statements in accordance
with SFAS 109 and prescribes a recognition threshold and measurement attribute
for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. On February 1, 2008, the
FASB issued FASB Staff Position FIN 48-2,Effective Date of
FASB Interpretation No. 48 for Certain Nonpublic Enterprises,which deferred the effective date
of FIN 48 for non-public companies to fiscal yearsbeginning after December 15, 2007. TheFundhas concluded that it is eligible for
this deferral and therefore, FIN 48 will become effective for theFundbeginning January 1, 2008. TheFundis currently evaluating the impact of
adopting FIN 48 on its consolidated financial statements.





SFAS 157





In September 2006, the FASB issued SFAS
No. 157,Fair Value
Measurements(“SFAS 157”), to define fair value, establish a
framework for measuring fair value in accordance with generally accepted
accounting principles and expand disclosures about fair value measurements. SFAS
157 requires quantitative disclosures using a tabular format in all periods
(interim and annual) and qualitative disclosures about the valuation techniques
used to measure fair value in all annual periods. SFAS 157 will become effective
for theFundbeginning January 1, 2008.In
February 2008, FASB issued Staff Position 157-2, Effective Date of FASB Statement
No. 157, which delays the effective date of SFAS 157 for
nonfinancial assets and nonfinancial liabilities for the Fund until January 1,
2009, except for items that are recognized or disclosed at fair value in the
financial statements on a recurring basis.TheFundis currently evaluating the impact of
adopting SFAS 157 on its consolidated financial
statements.


14
 Table of Contents





SFAS
159





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”), which expands
opportunities to use fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. SFAS 159 will become effective for the Fund beginning January 1,
2008. The Fund is currently evaluating the impact of adopting SFAS 159 on its
consolidated financial statements.





SFAS
160





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS
160”). SFAS 160 requires that ownership interests in subsidiaries held by
parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements within equity, but separate from the parent’s equity. It also
requires once a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners. SFAS
160 will become effective for the Fund beginning January 1, 2009. The Fund is
currently evaluating the impact of adopting SFAS 160 on its consolidated
financial statements.




ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Not required.





ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




The consolidated financial statements of
the Fund, including the notes thereto and the report thereon, are presented
beginning on page F-1 of this Form 10-K.





ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE




None.




ITEM 9A.  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and
Procedures




Under the
supervision, and with the participation of the Fund’s management, including its
Chief Executive Officer and Chief Financial Officer, the Fund evaluated the
effectiveness of the design and operation of disclosure controls and procedures
(as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the
period covered by this Annual Report on Form 10-K.




The Fund
previously reported the following material weaknesses:





(i)
            a
      lack of sufficient personnel with relevant experience to develop,
      administer and monitor disclosure controls and procedures to enable the
      Fund to comply efficiently, or on a timely basis, with its financial
      reporting obligations; and




(ii)
            inadequate
      disclosure controls and procedures, including inadequate record retention
      and review policies that would enable the Fund to meet its financial
      reporting and disclosure obligations in an efficient and timely
      manner.





During
the fourth quarter of 2007, the Fund expanded its disclosure controls and
procedures. The Fund documented many of its existing informal procedures,
established a compliance-focused disclosure committee, formalized monthly
closing procedures, implemented a corporate whistleblower policy, and improved
corporate oversight over the Fund’s Egyptian operations. Management of the Fund believes that it
has corrected the weakness regarding inadequate record
retention.




As of
December 31, 2007, the Fund was still delinquent in its filings with the SEC.
Additionally, while improvements in disclosure controls and procedures were
noted, there were year-end accounting entries, that while properly recorded
prior to the publication of the Fund’s consolidated financial statements, were
not identified and processed in a timely manner. As a result, the Fund’s Chief
Executive Officer and Chief Financial Officer concluded that, as of the end of
the period covered by this report, the Fund’s disclosure controls and procedures
were not effective.


15
 Table of Contents




Management’s
Report on Internal Control over Financial Reporting





The
Fund’s management is responsible for establishing and maintaining adequate
internal control over financial reporting.  The Fund’s internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
of the Fund, including its Chief Executive Officer and Chief Financial Officer,
assessed the effectiveness of the Fund’s internal control over financial
reporting as of December 31, 2007.  In making this assessment,
management of the Fund used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal
Control — Integrated Framework.





While no
material weaknesses were noted during their assessment using those criteria, it
was noted that many of the Fund’s current disclosure procedures and controls
were only recently put into place and were not operational during the entire
year. Based on this, the Fund has not sufficiently demonstrated compliance with
its procedures related to internal control over financial reporting.
Accordingly, management of the Fund concluded that as of December 31, 2007,
the Fund’s internal control over financial reporting was not effective. To
mitigate the impact of this lack of effective internal control over financial
reporting, the Fund’s Chief Executive Officer and Chief Financial Officer
expanded their review of the disclosures contained in this Form 10-K by
reviewing additional supporting materials and conducting interviews of
management.





This
Annual Report on Form 10-K does not include an attestation report of the Fund’s
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Fund’s registered public accounting firm pursuant to temporary rules of the SEC
that permit the Fund to provide only management’s report in this Annual
Report.




Changes
in Internal Control over Financial Reporting





TheFund’s Chief Executive Officer and Chief
Financial Officer have concluded that there was no change in theFund's internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act, as
amended) that occurred during the quarter ended December 31, 2007that has materially affected, or is
reasonably likely to materially affect, theFund’s internal control over financial
reporting.





ITEM
9B.  OTHERINFORMATION





None.




16
 Table of Contents


PART III




ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




TheFund’s Managing Shareholder, RRP, was
originally founded in 1991. The Managing Shareholder has very broad authority,
including the authority to elect executive officers of theFund.




Each of the executive officers of theFundalso serves as an executive officer of
the Managing Shareholder. The executive officers of theFundare as follows:





Name,
      Age and Position with Registrant
            Officer
      SinceRandall
      D. Holmes, 60President and Chief Executive
      Officer
            2004Robert E.
      Swanson, 60Chairman
            1997Jeffrey
      H. Strasberg, 50Executive Vice President and Chief
      Financial Officer
            2007Daniel V.
      Gulino, 47Senior Vice President, General
      Counsel and Secretary
            2000





Set forth below is the name of and
certain biographical information regarding the executive officers of theFund:




Randall D.
Holmeshas served as
President and Chief Executive Officer of theFund, the Managing Shareholder and
affiliated Power Funds and LLCssince January 2006 and served as Chief
Operating Officer of theFund, the Managing Shareholder and
affiliated Power Funds and LLCsfrom January 2004 until January 2006.
Prior to such time, Mr. Holmes served as the primary outside counsel to and has
represented the Managing Shareholder and its affiliates since 1991.
Immediately prior to being appointed Chief Operating Officer, Mr. Holmes was
counsel to Downs Rachlin Martin PLLC (“DRM”). DRM is one of the primary outside
counsel to theFund, the Managing Shareholder and its
affiliates. He has maintained a minor consulting relationship with DRM in which
he may act as a paid advisor to DRM on certain matters that are unrelated tothe Fund. Such relationship will not require a
significant amount of Mr. Holmes’ time and it is expected that such relationship
will not adversely affect his duties as President and Chief Executive Officer.
Mr. Holmes is a graduate ofTexasTechUniversityand the University of Michigan Law
School. He is a member of theNew YorkStateBar.




Robert E.
Swansonhas served as
Chairman of theFund, the Managing Shareholder and
affiliated PowerFunds and LLCs since their inception. From
their inception until January 2006, Mr. Swanson also served as their Chief
Executive Officer. Mr. Swanson is the controlling member of the Managing
Shareholder, as well as Ridgewood Energy and Ridgewood Capital, affiliates of
theFund. Mr. Swanson has been President and
registered principal of Ridgewood Securities since its formation in 1982, has
served as the Chairman of the Board of Ridgewood Capital since its organization
in 1998 and has served as President and Chief Executive Officer of Ridgewood
Energy since its inception in 1982. Mr. Swanson is a member of theNew YorkStateand New Jersey State Bars, the
Association of the Bar of the City ofNew Yorkand the New York State Bar Association.
He is a graduate ofAmherstCollegeandFordhamUniversityLawSchool.




Jeffrey H.
Strasberghas served as
Executive Vice Presidentand Chief Financial Officerof theFund, the Managing Shareholderand affiliated PowerFunds and LLCs since May 2007. Mr. Strasberg
also serves as Senior Vice President and Chief Financial Officer of Ridgewood
Capital and affiliated LLCs and Ridgewood Securities and has done so since April
2005. Mr. Strasberg joined Ridgewood Capital in 1998 where his initial
responsibilities were to serve as interim Chief Financial Officer of various
portfolio companies in which Ridgewood CapitalFunds had interests. Mr. Strasberg is a
Certified Public Accountant and a graduate of theUniversityofFlorida.




Daniel
V. Gulinohas served as Senior Vice President and General Counsel of theFund,
the Managing Shareholder and affiliated PowerFunds
and LLCs since 2000 and was appointed Secretary in February 2007. Mr. Gulino
also serves as Senior Vice President and General Counsel of Ridgewood Energy,
Ridgewood Capital, Ridgewood Securities and affiliatedFunds
and LLCs and has done so since 2000. Mr. Gulino is a member of theNew
JerseyStateand Pennsylvania State Bars. He is a graduate ofFairleighDickinsonUniversityand Rutgers University School of Law.




Board of Directors and Board
Committees




The
Fund does not have its own board of directors or any board committees. The Fund
relies upon the Managing Shareholder to perform the function that a board of
directors or its committees would otherwise perform. Officers of the Fund are
not directly compensated by the Fund, and all compensation matters are addressed
by the Managing Shareholder, as described in Item 11. “Executive Compensation”.
Because the Fund does not maintain a board of directors and because officers of
the Fund are compensated by the Managing Shareholder, the Managing Shareholder
believes that it is appropriate for the Fund not to have a nominating or
compensation committee.


17
 Table of Contents




Managing
Shareholder




The Fund’s management agreement with the
Managing Shareholder (the "Management Agreement") details how the Managing
Shareholder is to render management, administrative and investment advisory
services to the Fund. Specifically, the Managing Shareholder performs (or may
arrange for the performance of) the management and administrative services
required for the operation of the Fund. Among other services, the Managing
Shareholder administers the accounts and handles relations with shareholders,
provides the Fund with office space, equipment and facilities and other services
necessary for its operation, and conducts the Fund’s relations with custodians,
depositories, accountants, attorneys, brokers and dealers, corporate
fiduciaries, insurers, banks and others, as required.




The Managing Shareholder is also
responsible for making investment and divestment decisions, subject to the
provisions of the Declaration of Trust. The Managing Shareholder is obligated to
pay the compensation of the personnel and administrative and service expenses
necessary to perform the foregoing obligations. The Fund pays all other expenses
of the Fund, including transaction expenses, valuation costs, expenses of
preparing and printing periodic reports for shareholders and the SEC, postage
for Fund mailings, SEC fees, interest, taxes, legal, accounting and consulting
fees, litigation expenses and other expenses properly payable by the Fund. The
Fund reimburses the Managing Shareholder for all such Fund expenses paid by the
Managing Shareholder.




As compensation for the Managing
Shareholder’s performance under the Management Agreement, the Fund is obligated
to pay the Managing Shareholder an annual management fee described below in Item
13. “Certain Relationships and Related Transactions, and DirectorIndependence”.





Each investor in the Fund consented to
the terms and conditions of the Management Agreement by subscribing to acquire
Investor Shares in the Fund. The Management Agreement is subject to termination
at any time on 60 days prior notice by a majority in interest of the
shareholders or the Managing Shareholder. The Management Agreement is subject to
amendment by the parties upon the approval of a majority in interest of the
investors.




Section 16(a) Beneficial Ownership
Reporting Compliance




Section 16(a) of the Exchange Act
requires theFund’s executive officers and directors, and
persons who own more than 10% of a registered class of theFund’s equity securities, to file reports of
ownership and changes in ownership with the SEC. Based on a review of the copies
of reports furnished or otherwise available to theFund, the Fundbelieves that the filing requirements
were not met by Robert E. Swanson during the year ended December 31, 2007
as he failed to timely file a Form 4. This report has since been filed with
the SEC.





Code of Ethics




In March 2004, the Managing Shareholder,
for itself and for the Fund and its affiliates, adopted a Code of Ethics
applicable to the principal executive officer, principal financial officer,
principal accounting officer or controller (or any persons performing similar
functions) of each such entity. A copy of the Code of Ethics is filed as Exhibit
14 to this Annual Report on Form 10-K.




ITEM 11.  EXECUTIVE COMPENSATION




Except as noted below, the executive officers of theFunddo not receive compensation directly
from theFundor any of its subsidiaries. They
provide managerial services to theFundin accordance with the terms of theFund’sDeclaration of Trust. The Managing Shareholder, or
affiliated management companies, determines and pays the compensation of these
officers. Each of the executive officers of theFundalso serves as an executive officer of
the Managing Shareholder and otherfunds managed by the Managing Shareholder
and its affiliates.





TheFunddoes, however, pay the Managing
Shareholder a management fee and the Managing Shareholder may determine to use a
portion of the proceeds from the management fee to pay compensation to executive
officers of theFund. See Item 13. “Certain Relationships
and Related Transactions, and DirectorIndependence” for more information regarding
Managing Shareholder compensation and payments to affiliated
entities.





Prior to becoming executive officers of
the Fund, Randall D. Holmes and Douglas R. Wilson became vested participants in
a CLP management incentive program. Additionally, Mr. Wilson continued serving
as an officer with CLP after becoming an executive officer of the Fund. Bonus
amounts presented below represent compensation received by Messrs. Holmes and
Wilson from CLP during years in which they were also executive officers of the
Fund. Bonus amounts represent formula-based payments under the CLP management
incentive program. Mr. Wilson’s salary was paid pursuant to the terms of his
Service Agreement with CLP.


18
 Table of Contents


Compensation information for 2007 and
2006 is presented below, but does not include benefits generally available to
other CLP salaried employees.





Summary
      Compensation TableName and Principal
      Position
            Year
            Salary
            
            Bonus
            
            Total$
            
            $
            
            $Randall D.
      Holmes
            2007
            
            -
            
            
            -
            
            
            -President and Chief Executive
      Officer
            2006
            
            -
            
            
            6,702
            
            
            6,702Douglas R.
      Wilson
            2007
            
            21,273
            
            
            -
            
            
            21,273Former Executive Vice President
      and Chief Financial Officer(1)
            2006
            
            138,225
            
            
            33,509
            
            
            171,734




(1)Mr. Wilson served as
an executive officer of the Fund from April 2005 to May
2007.




Upon the Sale of CLP in February 2007
(as discussed under Item 1. “Business”), each of Mr. Wilson’s employment
with CLP and Messrs. Holmes’ and Wilson’s participation in the CLP management
plan was terminated.





ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS




The following table sets forth
information with respect to the beneficial ownership of theFund’s Investor Shares as of December 31,
2007(no person owns more than 5%)
by:





·
            each executive officer of theFund(there are no directors);
      and


·
            all of the executive officers of
      theFundas a
  group.





Beneficial ownership is determined in
accordance with SEC rules and includes voting or investment power with respect
to the securities. Except as indicated by footnote, and subject to applicable
community property laws, the persons named in the table below have sole voting
and investment power with respect to all Investor Shares shown as beneficially
owned by them. Percentage of beneficial ownership is based on658.1067Investor Shares outstanding at December
31, 2007. Other than as set forth below, no
officer of theFundowns any shares of theFund.





Name
      of beneficial owner
            Number
              of
      shares (1)
            PercentRidgewood
      Renewable Power LLC (Managing Shareholder)
              Robert
      E. Swanson,  controlling member
            1.25
            *Executive
      officers as a group
            1.25
            *


*           Represents less than one
percent.





(1)
            Does not include amanagementshare in theFundrepresenting the beneficial
      interests and management rights of the Managing Shareholder in its
      capacity as the Managing Shareholder. The management share owned by the
      Managing Shareholder is the only issued and outstanding management share
      of theFund. The management rights of the
      Managing Shareholder are described in further detail in Item 1.
      “Business”. Its beneficial interest in cash distributions of theFundand its allocable share of theFund’s net profits and net losses and
      other items attributable to themanagementshare are described in further
      detail below at Item 13. “Certain Relationships and Related Transactions,
      and DirectorIndependence”.





ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE





Under the terms of the Management
Agreement, the Managing Shareholder provides certain management, administrative
and advisory services and office space to the Fund. In return, the Fund is
obligated to pay the Managing Shareholder an annual management fee equal to 2.5%
of the total contributed capital of theFund, which equals $1,645,000 for the
yearended December 31,
2007, as compensation for such services. The management fee is to be paid in
monthly installments and, to the extent that the Fund does not pay the
management fee on a timely basis, the Fund accrues interest at an annual rate of
10% on the unpaid balance.





For the year ended December 31, 2007,
the Fund made management fee payments to the Managing Shareholder of $823,000.
During 2007, the Managing Shareholder forgave $834,000 of unpaid accrued
management fees and related interest.In the fourth quarter of 2007, the
Managing Shareholder waived its right to reimbursement of$934,000 relatingto professional service fees of the
Fund.Any waivers, or forgiveness,by the Managing Shareholder are
recorded by the Fund as adeemedcapital contribution. The
shareholdersof the Fund other
than the Managing Shareholder were allocated 99% of each contribution and the
Managing Shareholder was allocated 1% so that the amount of the contribution
allocated offsets the allocation of the recorded
expense.


19
 Table of Contents




Under the Management Agreement with the
Managing Shareholder, RPM provides management, purchasing, engineering, planning
and administrative services to the projects operated by the Fund. RPM charges
the projects at its cost for these services and for the allocable amount of
certain overhead items. Allocations of costs are on the basis ofidentifiable direct costs or in
proportion to amounts invested in projects managed by RPM. For the year ended
December 31, 2007, RPM charged the US Hydro projectsapproximately$689,000 for overheaditems allocated in proportion to the
amount invested in projects managed. In addition, RPM charged the
projectsapproximately$4,813,000for direct expenses incurred during
2007.




Under the Declaration of Trust, the
Managing Shareholder is entitled to receive, concurrently with the shareholders
of the Fund other than the Managing Shareholder, 1% of all distributions from
operations made by the Fund in a year until the shareholders have received
distributions in that year equal to 12% of their equity contribution.
Thereafter, the Managing Shareholder is entitled to receive 25% of the
distributions for the remainder of the year. The Managing Shareholder is
entitled to receive 1% of the proceeds from dispositions of Fund property until
the shareholders other than the Managing Shareholder, have received cumulative
distributions equal to their original investment (“Payout”). After Payout, the
Managing Shareholder is entitled to receive 25% of all remaining distributions
of theFund. Distributions
to the Managing Shareholderwere $3,000 for theyear ended December 31, 2007. The Fund
has not yet reached Payout.





Income is allocated to the Managing
Shareholder until the profits so allocated equal distributions to the Managing
Shareholder. Thereafter, income is allocated among the shareholders other than
the Managing Shareholder in proportion to their ownership of Investor Shares. If
the Fund has net losses for a fiscal period, the losses are allocated 99% to the
shareholders other than the Managing Shareholder and 1% to the Managing
Shareholder, subject to certain limitations as set forth in the Declaration of
Trust. Amounts allocated to shareholders other than the Managing Shareholder are
apportioned among them in proportion to their capital
contributions.





Under the terms of the Declaration of
Trust, if the Adjusted Capital Account (as defined in the Declaration of Trust)
of a shareholder other than the Managing Shareholder would become negative using
General Allocations (as defined in the Declaration of Trust), losses and
expenses will be allocated to the Managing Shareholder. Should the Managing
Shareholder’s Adjusted Capital Account become negative and items of income or
gain occur, then such items of income or gain will be allocated entirely to the
Managing Shareholder until such time as the Managing Shareholder’s Adjusted
Capital Account becomes positive. This mechanism does not change the allocation
of cash, as discussed above.





On June 26, 2003, the Managing
Shareholder, entered into a Revolving Credit and Security Agreement with
Wachovia Bank, National Association. The agreement, as amended, allows the
Managing Shareholder to obtain loans and letters of credit of up to $6,000,000
for the benefit of theFundand otherfunds that it manages. As part of the
agreement, theFundagreed to limitations on its ability to
incur indebtedness, liens and to provide guarantees. In 2007, the Managing
Shareholder and Wachovia Bank agreed to extend the Managing Shareholder’s line
of credit through May 31, 2008.





As discussed in Item 1. “Business” under
the heading “Projects and Properties -Ridgewood
UK”, on January 23, 2007,
RUK, which is owned approximately 70% by Trust V and 30% by the Fund, entered
into the Sale Agreement pursuant to which RUK sold its 88% equity interest in
CLP, and Arbutus sold its 12% equity interest in CLP.  The Managing
Shareholder was not a party to the Sale Agreement but received certain payments
as a result of theSaleas a result of its service as the
Managing Shareholder of each of the Ridgewood ROCs and each of the PowerBank
Funds.  Because the Fund does not have its own board of directors or
any board committees and the Fund relies upon the Managing Shareholder to
perform the functions that a board of directors or its committees would
otherwise perform, the Managing Shareholder is a related person of the
Fund.





TheSalewas completed on February 22, 2007. The
total dollar amount attributable to the Managing Shareholder as a result of theSalewas approximately $37 million, all of
which was paid out of the proceeds of theSaleallocable to the PowerBank
Funds. The Managing Shareholder did not receive any payments from the Fund
or Trust V as a result of theSale.





As a result of theSale, two executive officers of the Fund,
who were also executive officers of RUK and were executive officers and/or
directors of CLP prior to theSale, were due an aggregate of $584,000 in
cash from CLP under the terms of a CLP management incentive
plan.  These officers waived their rights to receive such payments in
favor of RUK, resulting in such portion of the proceeds of theSalebeing allocated to RUK rather than to
the officers.


20
 Table of Contents




The determination of the allocation of
the purchase price among the Sellers was agreed to in the Sale Agreement as a
result of negotiations among (i) the Sellers for which the Managing Shareholder
acted as managing shareholder including RUK and the PowerBank Funds, (ii)
Arbutus and (iii) the Buyer.  The Directors, Managing Shareholder and
Managing Member (as appropriate) of the Sellers received and relied in part on
an opinion from an independent financial advisor engaged by the Sellers and the
Managing Shareholder which concluded that, among
other things, after giving effect to the proposed allocation of the
consideration paid by the Buyer in the Sale, (i) such Sale consideration, in the
aggregate, being paid for the assets purchased by the Buyer, including the
Assets and the Shares, taken as a whole (even if adjusted to reflect
changes in interest rates pursuant to the Sale Agreement) was not less than fair
value for those assets taken as a whole, (ii) the consideration being paid by
the Buyer for the shares of  CLP in the Sale was fair to the
shareholders of CLP from a financial point of view (without giving effect to any
impacts of the Sale on any particular shareholder other than in its capacity as
a shareholder) and (iii) the consideration being paid to each Ridgewood ROC in
the Sale was fair to the members of such Ridgewood ROC from a financial point of
view (without giving effect to any impacts of the Sale on any particular member
other than in its capacity as a member). Variations in the valuation of the
assets or in the allocation of the purchase price paid in the transaction would
have increased or decreased amounts to be received from the Sale by each of the
Sellers and the Managing Shareholder, and the respective shareholders of the
PowerBank Funds, Trust V, the Fund and Arbutus.





ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES




The following table presents fees and
services rendered by Grant Thornton LLP, the Fund’s principal accountant, for
the years ended December 31, 2007 and 2006 (in thousands).




2007
            
            
            2006Audit fees
            
            $
            531
            
            
            $
            691Tax fees1
            
            
            69
            
            
            
            62Total
            
            $
            600
            
            
            $
            753


1Tax
      fees consisted principally of tax compliance, planning and advisory
      services as well as tax examination
services.





Audit Committee Pre-Approval
Policy




The Managing Shareholder pre-approves on
an annual basis all audit and permitted non-audit services that may be performed
by the Fund’s independent registered public accounting firm, including the audit
engagement terms and fees, and also pre-approves any detailed types of
audit-related and permitted tax services to be performed during the year. The
Managing Shareholder pre-approves permitted non-audit services on an
engagement-by-engagement basis.





PART IV




ITEM 15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES




(a)           Financial
Statements




See the Index to Consolidated Financial
Statements in Page F-1 of this report.





(b)           Exhibits





Exhibits required by Section 601 of
Regulation S-K:




Exhibit
      No.
            Description3
            (i)(A)
            Certificate of Fund of the
      Registrant (incorporated by reference to the Registrant’s Registration
      Statement on Form 10 filed with the SEC on April 30,
      1999).3
            (i)(B)
            Amendment No. 1 to Certificate of
      Fund (incorporated by reference to the Registrant’s Registration Statement
      on Form 10 filed with the SEC on April 30,
1999).3
            (i)(C)
            Certificate of Amendment to the
      Certificate of Fund of the Registrant dated December 18, 2003
      (incorporated by reference to the Registrant’s Annual Report on Form 10-K
      filed with the SEC on August 17, 2007).3
            (ii)(A)
            Declaration of Trust of the Registrant (incorporated by reference
      to the Registrant’s Registration Statement on Form 10 filed with the SEC
      on April 30, 1999).




21
 Table of Contents





Exhibit
      No.
            
            Description3
            (ii)(B)
            Amendment No. 1 to the Declaration
      of Trust (incorporated by reference to the Registrant’s definitive proxy
      statement filed with the SEC on November 5, 2001, SEC File No.
      000-25935).3
            (ii)(C)
            Amendment of the Declaration of
      Trust of the Registrant effective January 1, 2005 (incorporated by
      reference to the Registrant’s Annual Report on Form 10-K filed with the
      SEC on August 17, 2007).10.1
            #
            Management Agreement between the
      Fund and Managing Shareholders, dated February 9, 1998 (incorporated by
      reference to the Registrant’s Registration Statement on Form 10 filed with
      the SEC on April 30, 1999).10.2
            
            Operating Agreement of Ridgewood
      Near East Holding LLC, dated September 30, 1999 (incorporated by reference
      to the Registrant’s Annual Report on Form 10-K filed with the SEC on March
      1, 2006).10.3
            
            Form of contracts and agreements
      between affiliates of CLPE Holdings Ltd. and each of (i) Ridgewood
      Renewable PowerBank I, LLC, (ii) Ridgewood Renewable PowerBank II, LLC,
      (iii) Ridgewood Renewable PowerBank III, LLC and (iv) Ridgewood Renewable
      PowerBank IV, LLC (incorporated by reference to the Registrant’s Annual
      Report on Form 10-K filed with the SEC on March 1,
      2006).10.4
            #
            The CLPE Holdings Management
      Incentive Plan dated August 6, 2003 (incorporated by reference to the
      Registrant’s Annual Report on Form 10-K filed with the SEC on August 17,
      2007).10.5
            
            Agreement made on January 23, 2007
      by and among Ridgewood UK LLC, Arbutus Energy Limited, Ridgewood ROC 2003
      LLC, Ridgewood ROC II 2003 LLC, Ridgewood ROC III 2003 LLC, Ridgewood ROC
      IV 2004 LLC and MEIF LG Energy Limited (incorporated by reference to
      Exhibit 10.1 to the Form 8-K filed by the Registrant with the SEC on
      January 29, 2007).10.6
            
            Sellers Agreement entered into as
      of January 23, 2007 by and among Ridgewood UK, LLC, and Ridgewood ROC 2003
      LLC, Ridgewood ROC II 2003 LLC, Ridgewood ROC III 2003 LLC, Ridgewood ROC
      IV 2004 LLC, Arbutus Energy Limited, Ridgewood Renewable PowerBank LLC,
      Ridgewood Renewable PowerBank II LLC, Ridgewood Renewable PowerBank III
      LLC, Ridgewood Renewable PowerBank IV LLC, Ridgewood Electric Power Trust
      V, The Ridgewood Power Growth Fund, Ridgewood Renewable Power LLC and
      Ridgewood Management Corporation (incorporated by reference to Exhibit
      10.2 to the Form 8-K filed by the Registrant with the SEC on January 29,
      2007).10.7
            #
            Service Agreement dated October 1,
      2004 between Douglas R. Wilson and CLPE Holdings Limited (incorporated by
      reference to the Registrant’s Annual Report on Form 10-K filed with the
      SEC on August 17, 2007).10.8
            #
            Deed of Waiver dated January 22,
      2007 between Randall D. Holmes and CLPE Holdings Limited relating to a
      bonus entitlement under The CLPE Holdings Management Incentive Plan
      (incorporated by reference to the Registrant’s Annual Report on Form 10-K
      filed with the SEC on August 17, 2007).10.9
            #
            Compromise Agreement dated
      February 22, 2007 between Douglas R. Wilson and CLPE Holdings Limited
      (incorporated by reference to the Registrant’s Annual Report on Form 10-K
      filed with the SEC on August 17, 2007).10.10
            #
            Deed
      of Waiver dated January 22, 2007 between Douglas R. Wilson and CLPE
      Holdings Limited relating to a bonus entitlement under The CLPE Holdings
      Management Incentive Plan (incorporated by reference to the Registrant’s
      Annual Repot on Form 10-K filed with the SEC on August 17,
      2007).14
            
            Code of Ethics, adopted on March
      1, 2004 (incorporated by reference to the Registrant’s Annual Report on
      Form 10-K filed with the SEC on March 1, 2006).21
            *
            Subsidiaries
      of the Registrant.


22
 Table of Contents





Exhibit
      No.
            
            Description31.1
            *
            Certification of Randall D.
      Holmes, Chief Executive Officer of the Registrant, pursuant to Securities
      Exchange Act Rule 13a-14(a).31.2
            *
            Certification of Jeffrey H.
      Strasberg, Chief Financial Officer of the Registrant, pursuant to
      Securities Exchange Act Rule 13a-14(a).32
            *
            Certifications pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of The
      Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief Executive
      Officer of the Registrant, and Jeffrey H. Strasberg, Chief Financial
      Officer of the Registrant.


____________________


*
            Filed
      herewith.





#
            A management
      contract or compensatory plan or arrangement required to be filed as an
      exhibit pursuant to Item 15(a)(3) of Form 10-K.(c)
            Financial Statement
      Schedules


See Consolidated Financial Statements
and accompanying notes included in this report.








23
 Table of Contents





SIGNATURES





Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.






THERIDGEWOODPOWER GROWTH
      FUNDDate:  March 26,
      2008
            By:
            /s/  Randall D.
      HolmesRandall D.
      HolmesChief Executive
      Officer(Principal Executive
      Officer)




Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




Signature
            
            Capacity
            
            Date/s/ Randall D.
      Holmes
            
            Chief Executive
      Officer
            
            March 26,
    2008Randall D.
      Holmes
            
            (Principal Executive
      Officer)/s/ Jeffrey H.
      Strasberg
            
            Executive Vice President and Chief
      Financial Officer
            
            March 26,
    2008Jeffrey H.
      Strasberg
            
            (Principal Financial and
      Accounting Officer)RIDGEWOODRENEWABLE POWER
      LLC(Managing
      Shareholder)By: /s/ Randall D.
      Holmes
            
            Chief Executive Officer of
      Managing Shareholder
            
            March 26,
    2008Randall D.
      Holmes






24
 Table of Contents




THERIDGEWOODPOWER GROWTH FUND





INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS







PageReport of Independent Registered Public Accounting
      Firm
            F-2Consolidated Balance Sheets at December 31, 2007 and
      2006
            F-3Consolidated Statements of Operations and Comprehensive Income
      (Loss) for the years endedDecember 31, 2007 and 2006
            F-4Consolidated Statements of Changes in Shareholders’ Equity
      (Deficit) for the years endedDecember 31, 2007 and 2006
            F-5Consolidated Statements of Cash Flows for the years ended
      December 31, 2007 and 2006
            F-6Notes to Consolidated Financial Statements
            F-7












F-1
 Table of Contents





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








The Managing Shareholder and
Shareholders


TheRidgewoodPower Growth Fund








We have audited the accompanying
consolidated balance sheets ofThe Ridgewood Power Growth
Fund(aDelawaretrust) and subsidiaries as of December 31,
2007and 2006, and the related consolidated
statements of operationsand comprehensive income (loss), changes in shareholders’ equity
(deficit), and cash flows for the yearsthenended. These consolidated financial
statements are the responsibility of theFund's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.





We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. TheFundis not required to have, nor were we
engaged to perform an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of theFund’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects,
the financial position ofThe Ridgewood Power Growth
Fundas of December 31,
2007and 2006, and the results of its operations and
its cash flows for the yearsthenended, in conformity with accounting
principles generally accepted in theUnited States of America.
















/s/ GRANT THORNTON
LLP


Edison,New Jersey


March 26, 2008








F-2
 Table of Contents


THE RIDGEWOOD POWER GROWTH
      FUNDCONSOLIDATED
      BALANCE SHEETS(in thousands, except share
      data)December
31,2007
              
              
              2006ASSETSCurrent
    assets:Cash and cash
      equivalents
              
              $
              4,271
              
              
              $
              2,588Accounts receivable, net of
      allowance
              
              
              1,332
              
              
              
              1,237Notes receivable - current
      portion
              
              
              234
              
              
              
              146Due from
      affiliates
              
              
              395
              
              
              
              330Inventory
              
              
              969
              
              
              
              630Prepaid expenses and other current
      assets
              
              
              676
              
              
              
              478Total current
      assets
              
              
              7,877
              
              
              
              5,409Notes receivable - noncurrent
      portion
              
              
              1,203
              
              
              
              1,364Investments
              
              
              277
              
              
              
              50Property, plant and equipment,
      net
              
              
              18,837
              
              
              
              19,189Intangibles,
      net
              
              
              3,449
              
              
              
              4,626Goodwill
              
              
              227
              
              
              
              227Other
assets
              
              
              249
              
              
              
              48Total
assets
              
              $
              32,119
              
              
              $
              30,913LIABILITIES AND SHAREHOLDERS'
      EQUITYCurrent
      liabilities:Accounts
      payable
              
              $
              695
              
              
              $
              571Accrued
      expenses
              
              
              195
              
              
              
              337Long-term debt - current
      portion
              
              
              387
              
              
              
              855Due to
      affiliates
              
              
              700
              
              
              
              684Total current
      liabilities
              
              
              1,977
              
              
              
              2,447Long-term debt - noncurrent
      portion
              
              
              1,449
              
              
              
              1,774Other
      liabilities
              
              
              1,824
              
              
              
              1,738Deferred income taxes,
      net
              
              
              339
              
              
              
              857Minority
      interest
              
              
              6,902
              
              
              
              6,371Total
      liabilities
              
              
              12,491
              
              
              
              13,187Commitments and
      contingenciesShareholders’ equity
      (deficit):Shareholders’ equity (658.1067
      Investor Shares issued andoutstanding)
              
              
              20,002
              
              
              
              18,090Managing Shareholder's accumulated
      deficit (1 managementshare issued and
      outstanding)
              
              
              (374
              )
              
              
              (364
              )Total shareholders’
      equity
              
              
              19,628
              
              
              
              17,726Total liabilities and
      shareholders’ equity
              
              $
              32,119
              
              
              $
              30,913





The accompanying notes are an integral
part of these consolidated financial statements.




F-3
 Table of Contents


THE RIDGEWOOD POWER GROWTH
      FUNDCONSOLIDATED STATEMENTS OF
      OPERATIONSAND COMPREHENSIVE
      INCOME (LOSS)(in thousands, except per share
      data)Years Ended December
      31,2007
              
              
              2006Revenues
              
              $
              13,737
              
              
              $
              13,518Cost of
      revenues
              
              
              9,030
              
              
              
              9,000Gross
profit
              
              
              4,707
              
              
              
              4,518Operating
      expenses:General and administrative
      expenses
              
              
              5,183
              
              
              
              3,094Management fee to Managing
      Shareholder
              
              
              1,645
              
              
              
              1,645Total operating
      expenses
              
              
              6,828
              
              
              
              4,739Loss from
      operations
              
              
              (2,121
              )
              
              
              (221
              )Other income
      (expense):Interest
    income
              
              
              175
              
              
              
              96Interest
      expense
              
              
              (316
              )
              
              
              (345
              )Equity in income (loss) from
      RUK
              
              
              16,423
              
              
              
              (65
              )(Loss) gain on disposition of
      marketable securities
              
              
              (50
              )
              
              
              3Other income (expense),
      net
              
              
              74
              
              
              
              (61
              )Total other income (expense),
      net
              
              
              16,306
              
              
              
              (372
              )Income (loss) before income tax
      and minority interest
              
              
              14,185
              
              
              
              (593
              )Income tax
      benefit
              
              
              (523
              )
              
              
              (77
              )Income (loss) before minority
      interest
              
              
              14,708
              
              
              
              (516
              )Minority interest in the earnings
      of subsidiaries
              
              
              (344
              )
              
              
              (487
              )Net income
      (loss)
              
              
              14,364
              
              
              
              (1,003
              )Foreign currency translation
      adjustment
              
              
              (76
              )
              
              
              87Unrealized gain on marketable
      securities
              
              
              -
              
              
              
              14Comprehensive income
      (loss)
              
              $
              14,288
              
              
              $
              (902
              )Managing Shareholder - Net
      loss
              
              $
              (24
              )
              
              $
              (10
              )Shareholders - Net income
      (loss)
              
              
              14,388
              
              
              
              (993
              )Net income (loss) per Investor
      Share
              
              
              21,862
              
              
              
              (1,509
              )








The accompanying notes are an integral
part of these consolidated financial statements.




F-4
 Table of Contents




THE RIDGEWOOD POWER GROWTH
      FUNDCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)YEARS ENDED DECEMBER 31, 2007 AND
      2006(in
    thousands)Managing
              
              
              TotalShareholders'
              
              
              Shareholder
              
              
              Shareholders'Equity
              
              
              (Deficit)
              
              
              EquityBalance at December 31,
      2005
              
              $
              18,111
              
              
              $
              (362
              )
              
              $
              17,749Net loss
              
              
              (993
              )
              
              
              (10
              )
              
              
              (1,003
              )Foreign currency translation
      adjustment
              
              
              87
              
              
              
              -
              
              
              
              87Unrealized gain on investment in
      marketable securities
              
              
              14
              
              
              
              -
              
              
              
              14Cash
      distributions
              
              
              (1,645
              )
              
              
              (17
              )
              
              
              (1,662
              )Capital
      contribution
              
              
              2,516
              
              
              
              25
              
              
              
              2,541Balance at December 31,
      2006
              
              
              18,090
              
              
              
              (364
              )
              
              
              17,726Net income
              
              
              14,388
              
              
              
              (24
              )
              
              
              14,364Foreign currency translation
      adjustment
              
              
              (75
              )
              
              
              (1
              )
              
              
              (76
              )Cash
      distributions
              
              
              (14,151
              )
              
              
              (3
              )
              
              
              (14,154
              )Capital
      contribution
              
              
              1,750
              
              
              
              18
              
              
              
              1,768Balance at December 31,
      2007
              
              $
              20,002
              
              
              $
              (374
              )
              
              $
              19,628












The accompanying notes are an integral
part of these consolidated financial statements.










F-5
 Table of Contents


THE RIDGEWOOD POWER GROWTH
      FUNDCONSOLIDATED STATEMENTS OF CASH FLOWS(in
    thousands)Years Ended December
      31,2007
              
              
              2006Cash flows from operating
      activities:Net income
      (loss)
              
              $
              14,364
              
              
              $
              (1,003
              )Adjustments to reconcile net
      income (loss) to net cash provided byoperating
      activities:Depreciation and
      amortization
              
              
              3,603
              
              
              
              3,609Provision for bad
      debts
              
              
              107
              
              
              
              22Forgiveness of unpaid professional
      and management fees and related interest
              
              
              1,768
              
              
              
              2,541Equity in (income) loss from
      RUK
              
              
              (16,423
              )
              
              
              65Loss (gain) on disposition of
      marketable securities
              
              
              50
              
              
              
              (3
              )Loss on sale of
      equipment
              
              
              14
              
              
              
              37Deferred income taxes,
      net
              
              
              (529
              )
              
              
              (229
              )Minority interest in the earnings
      of subsidiaries
              
              
              344
              
              
              
              487Changes in operating assets and
      liabilities:Accounts
      receivable
              
              
              (167
              )
              
              
              113Inventory
              
              
              (307
              )
              
              
              13Prepaid expenses and other current
      assets
              
              
              (190
              )
              
              
              (248
              )Other
assets
              
              
              (194
              )
              
              
              (42
              )Accounts
      payable
              
              
              108
              
              
              
              (744
              )Accrued
      expenses
              
              
              (149
              )
              
              
              106Due to/from affiliates,
      net
              
              
              80
              
              
              
              322Other
      liabilities
              
              
              85
              
              
              
              4Total
      adjustments
              
              
              (11,800
              )
              
              
              6,053Net cash provided by operating
      activities
              
              
              2,564
              
              
              
              5,050Cash flows from investing
      activities:Distributions from
      RUK
              
              
              15,674
              
              
              
              -Capital
      expenditures
              
              
              (1,568
              )
              
              
              (708
              )Proceeds from sale of
      equipment
              
              
              11
              
              
              
              32Collections from notes
      receivable
              
              
              78
              
              
              
              131Proceeds from sale of marketable
      securities
              
              
              -
              
              
              
              45Net cash provided by (used in)
      investing activities
              
              
              14,195
              
              
              
              (500
              )Cash flows from financing
      activities:Repayments under bank
      loan
              
              
              (857
              )
              
              
              (1,177
              )Cash distributions to
      shareholders
              
              
              (14,154
              )
              
              
              (1,662
              )Cash distributions to minority
      interest
              
              
              -
              
              
              
              (1,037
              )Net cash used in financing
      activities
              
              
              (15,011
              )
              
              
              (3,876
              )Effect of exchange rate on cash
      and cash equivalents
              
              
              (65
              )
              
              
              8Net increase in cash and cash
      equivalents
              
              
              1,683
              
              
              
              682Cash and cash equivalents,
      beginning of year
              
              
              2,588
              
              
              
              1,906Cash and cash equivalents, end of
      year
              
              $
              4,271
              
              
              $
              2,588Supplemental disclosure of cash
      flow information:Interest
    paid
              
              $
              335
              
              
              $
              279Income tax
    paid
              
              
              171
              
              
              
              252






The accompanying notes are an integral
part of these consolidated financial statements.


F-6
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)


1.  DESCRIPTION
OF BUSINESS





The Ridgewood Power Growth Fund (the
“Fund”)is aDelawaretrustformedonFebruary18,1997. The Fund began offering sharesin February 1998 and concluded its
offering in April 2000. The objective of the Fund is to provide benefits to its
shareholdersthrough a
combination of distributions of operating cash flow and capital appreciation.
The ManagingShareholder of
the Fund is Ridgewood Renewable Power LLC (“RRP” or the “Managing
Shareholder”).  The Fund has been organized to invest primarily in
independent power generation facilities, water desalinization plants and other
infrastructure projects both in US and abroad.The projects owned by the
Fund have characteristics that qualify the projects for government
incentives.





The Fund’s accompanying consolidated
financial statements include the accounts of the Fund and its
majority-owned subsidiary.
The Fund’s consolidated financial statements also include the Fund’s 30.4%
interest in Ridgewood RUK, LLC (“RUK”), which is accounted for under the equity
method of accounting, as the Fund has the ability to exercise significant
influence, but does not control the operating and financial policies of RUK.
RUKpreviously owned
landfill gas-fired electric projects located in theUnited Kingdom, which were sold in February
2007.





The Fund owns a 70.8% interest in US
Hydro Corporation (“US Hydro”) and the remaining 29.2% minority interest is
owned by Ridgewood Electric Power Trust V (“Trust V”). In addition, the Fund
owns a 68.1% interest in Ridgewood Near East Holdings LLC (“NEH”) and the
remaining minority interests are owned by Trust V (14.1%) and Ridgewood Egypt
Fund (“Egypt Fund”) (17.8%). The interests of Trust V and Egypt Fund are
presented as minority interests in the consolidated financial statements of the
Fund.




NEH has
the capacity to produce 29,100 cubic meters (approximately 7.7 million gallons)
of potable water per day and electricity generating capacity of 23.8MW. US Hydro
operates hydro-electric generating facilities with 15MW of generating
capacity.





The Managing Shareholder performs (or
arranges for the performance of) the operation and maintenance of the projects
invested in by the Fund and the management and administrative services required
for Fund operations. Among other services, the Managing Shareholder administers
the accounts and handles relations with the shareholders, including tax and
other financial information. The Managing Shareholder also provides the Fund
with office space, equipment and facilities and other services necessary for its
operation.





In October 2007, the Managing Shareholder announced that
it intends to marketNEH’s
assets for sale and in January 2008 announced that it also intends to market the
hydro-electric projects for sale. These assets represent the remaining
investments of the Fund.These assets did not meet the qualifications to be classified as “held for sale”
at December 31, 2007.





2.   SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES





a)  Principles of
Consolidation





The consolidated financial statements
include the accounts of the Fund and its majority-owned subsidiaries. Minority
interests of majority-owned subsidiaries are calculated based upon the
respective minority interest ownership percentages. All material intercompany
transactions have been eliminated in consolidation.





The Fund uses the equity method of
accounting for its investments in affiliates, which are 50% or less owned, as
the Fund has the ability to exercise significant influence over the operating
and financial policies of the affiliates but does not control the affiliate. The
Fund’s share of the earnings or losses of the affiliates is included in the
consolidated financial statements.





b)   Use of
Estimates





The preparation of consolidated
financial statements in accordance with accounting principles generally accepted
in theUnited States of
Americarequires the Fund
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an ongoing basis, the Fund evaluates its estimates,
including accounts receivable, notes receivable, investments, recoverable value
of property, plant and equipment, intangibles and recordable liabilities for
litigation and other contingencies. The Fund bases its estimates on historical
experience, current and expected conditions and various other assumptions that
are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.





c)    Revenue
Recognition





Revenues
generated from the sale of electric power are recorded in the month of delivery,
based on the estimated volumes sold to customers. Revenues
generated from the sale of fresh water are recorded in the month of delivery,
based on actual volumes sold to customers. Power generation revenue
adjustments are made to reflect actual volumes delivered when the actual
volumetric information subsequently becomes available.Billingsto
customers for power generation generally occurs during the month following
delivery. Final billings did not vary significantly from
estimates.


F-7
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




d)    Cash and Cash
Equivalents





The Fund considers all highly liquid
investments with maturities of three months or less, when purchased, to be cash
and cash equivalents. As of December 31, 2007 and 2006, the Fund had cash
deposits held inforeign
banks of $1,865and $1,236, respectively,where there is noinsurance. Cash deposits held in US
banks exceeded insured limits by $2,206and $1,152 asof December 31, 2007 and 2006,
respectively.





e)   Accounts
Receivable





Accounts receivable are recorded at
invoice price in the period the related revenues are earned, and do not bear
interest. The Fund maintains an allowance for doubtful accounts for estimated
uncollectible accounts receivable. The allowance is based on the Fund’s
assessment of aged accounts, historical experience, and other currently
available evidence of the collectability and the aging of accounts receivable.
Account balances are charged off against the allowance when the Fund believes it
is probable that the receivable will not be recovered.





f)    Inventory





Inventory primarily consists of spare
parts and materials used in the Fund’s operation. Inventories are stated at the
lower of cost and net realizable value. An allowance is established for slow
moving items on the basis of management’s review and assessment of inventory
movements.





g)    Property,
Plant and Equipment





Property, plant and equipment,
consisting of land, hydro-electric generation facilities (“HEGFs”), water
desalinization facilities and office equipment are stated at cost less
accumulated depreciation. Renewals and betterments that increase the useful
lives of the assets are capitalized. Repair and maintenance expenditures are
expensed as incurred. Upon retirement or disposal of assets, the cost and
related accumulated depreciation are removed from the consolidated balance
sheets. The difference, if any, between the net asset value and any proceeds
from such retirement or disposal is recorded as a gain or loss in the
consolidated statement of operations.





The Fund used straight-line method of
depreciation over the estimated useful life of the assets:




HEGFs
            30
    yearsWater desalinization
      facilities
            5-10
      yearsOffice
      equipment
            5
    years





h)    Impairment of
Goodwill, Intangibles and Long-Lived Assets





The Fund evaluates intangible assets and
long-lived assets, such as property, plant and equipment, when events or changes
in circumstances indicate that the carrying value of such assets may not be
recoverable. The determination of whether impairment has occurred is made by
comparing the carrying value of an asset to the estimated undiscounted cash
flows attributable to that asset. If impairment has occurred, the impairment
loss recognized is the amount by which the carrying value exceeds the estimated
fair value of the asset, which is based on the estimated future cash flows
discounted at the estimated cost of capital.The analysis requires
estimates of the amount and timing of projected cash flows and, where
applicable, judgments associated with, among other factors, the appropriate
discount rate. Such estimates are critical in determining whether any impairment
charge should be recorded and the amount of such charge if an impairment loss is
deemed to be necessary. For the
years ended December 31, 2007 and 2006, there were no triggering events and the
Fund did not perform an impairment assessment.





The
Fund evaluates goodwill and intangible assets with indefinite useful lives under
Statement of Financial Accounting Standards (“SFAS”) No. 142,Goodwill
and Other Intangible Assets(“SFAS
142”).  Under
SFAS 142, goodwill and intangible assets with indefinite lives are subject to
annual impairment tests through a comparison of fair value to carrying value.
The two-step approach to assess a reporting unit’s goodwill impairment requires
that the Fund first compare the estimated fair value of a reporting unit, which
has been assigned goodwill, to the carrying amount of the unit’s assets and
liabilities, including its goodwill. If the fair value of the reporting unit is
below its carrying amount, then the second step of the impairment test is
performed, in which the current fair value of the unit’s assets and liabilities
is used to determine the current implied fair value of the unit’s goodwill. The
Fund performed an annual review of goodwill in accordance with SFAS 142 and
determined no goodwill impairment was required for the years ended December 31,
2007 and 2006.


F-8
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




i)    Income
Taxes





US Hydro, for federal income tax
purposes, files on a consolidated basis using the accrual method of accounting
on a calendar year basis. For state income tax purposes, US Hydro files on an
individual entity basis.USHydro uses the liability method of
accounting for income taxes. Deferred income taxes reflects, where required, the
net tax effect of temporary differences arising between the carrying amounts of
assets and liabilities for financial reporting purposes and amounts used for tax
purposes.





The Fund’s Egyptian subsidiary has a ten
year income tax holiday that expires on December 31, 2010. The Fund
records deferred tax liabilities for book to tax differences that are
scheduled to exist at the expiration of the tax holiday.





Except
for the above, no provision is made for income taxes in the accompanying
consolidated financial statements as the income or losses of the Fund are passed
through and included in the income tax returns of the individual shareholders of
the Fund. As a result, changes in the Fund’s pre-tax income (loss) do
not necessarily lead to changes in income tax expense, thereby resulting in
volatility of the effective tax rate. US Hydro operates in several tax
jurisdictions and, as a result, the geographic mix of US Hydro’s pre-tax income
or loss can also impact the Fund’s overall effective tax rate.




j)    Foreign
Currency Translation





The Egyptian Pound is the functional
currency of the Fund’s Egyptian subsidiary. The consolidated financial
statements of the Fund’s non-United States subsidiary are translated intoUnited Statesdollars. Assets and liabilities are
translated into US dollars using the current exchange rate in effect at the
balance sheet date, while revenues and expenses are translated using the average
exchange rate during the applicable reporting period. The cumulative foreign
currency translation adjustment is a component of other comprehensive income
(loss) included in shareholders’ equity.





k)    Fair Value of
Financial Instruments





At December 31, 2007 and 2006, the
carrying value of the Fund’s cash and cash equivalents, accounts
receivable, notes receivable, and accounts payable and accrued expenses
approximates their fair value. The fair value of the long-term debt, calculated
using current rates for loans with similar maturities, does not differ
materially from its carrying value.





l)     Significant
Customers





During 2007 and 2006, the Fund’s largest
customeraccounted for 10.4% and
22.1%of total revenues,
respectively.





m)    Recent
Accounting Pronouncements





FIN 48





In June
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48,Accounting for
Uncertainty in Income Taxes (“FIN 48”), an interpretation of SFAS No.
109, Accounting for Income
Taxes(“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial statements in accordance
with SFAS 109 and prescribes a recognition threshold and measurement attribute
for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. On February 1, 2008, the FASB
issued FASB Staff Position FIN 48-2,Effective Date of
FASB Interpretation No. 48 for Certain Nonpublic Enterprises,which deferred the effective date
of FIN 48 for non-public companies to fiscal yearsbeginning after December 15, 2007. TheFundhas concluded that it is eligible for
this deferral and therefore, FIN 48 will become effective for theFundbeginning January 1, 2008. TheFundis currently evaluating the impact of
adopting FIN 48 on its consolidated financial statements.





SFAS 157





In September 2006, the FASB issued SFAS
No. 157,Fair Value
Measurements(“SFAS 157”), to define fair value, establish a
framework for measuring fair value in accordance with generally accepted
accounting principles and expand disclosures about fair value measurements. SFAS
157 requires quantitative disclosures using a tabular format in all periods
(interim and annual) and qualitative disclosures about the valuation techniques
used to measure fair value in all annual periods. SFAS 157 will become effective for theFundbeginning January 1, 2008.In
February 2008, FASB issued Staff Position 157-2, Effective Date of FASB Statement
No. 157, which delays the effective date of SFAS 157 for
nonfinancial assets and nonfinancial liabilities for the Fund until January 1,
2009, except for items that are recognized or disclosed at fair value in the
financial statements on a recurring basis.TheFundis currently evaluating the impact of
adopting SFAS 157 on its consolidated financial
statements.


F-9
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)


SFAS
159





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”), which expands
opportunities to use fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. SFAS 159 will become effective for the Fund beginning January 1,
2008. The Fund is currently evaluating the impact of adopting SFAS 159 on its
consolidated financial statements.





SFAS
160





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements — an amendment of ARB No. 51
(“SFAS 160”).  SFAS 160 requires that ownership interests in
subsidiaries held by parties other than the parent, and the amount of
consolidated net income, be clearly identified, labeled, and presented in the
consolidated financial statements within equity, but separate from the parent’s
equity. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. SFAS 160 will become effective for the Fund beginning
January 1, 2009. The Fund is currently evaluating the impact of adopting
SFAS 160 on its consolidated financial statements.





3.    ACCOUNTS
RECEIVABLE





Accounts receivable at December 31, 2007
and 2006 is as follows:




2007
            
            
            2006Accounts
      receivable
            
            $
            1,551
            
            
            $
            1,364Less: allowance for doubtful
      accounts
            
            
            (219)
            
            
            
            (127)$
            1,332
            
            
            $
            1,237





The Fund records an allowance to account
for potentially uncollectible accounts receivable. The allowance is determined
based on management’s knowledge of the business, specific customers, review of
aged accounts and a specific identification of accounts where collection is at
risk. The following details the activity in the Fund’s allowance for doubtful
accounts for the years ended December 31, 2007 and
2006:





2007
            
            
            
            2006Balance at beginning
      of  year
            
            $
            127
            
            
            $
            337Additions charged to bad debt
      provision(1)
            
            
            107
            
            
            
            22Deductions, net of recoveries(2)
            
            
            (15)
            
            
            
            (232)Balance, end of
      year
            
            $
            219
            
            
            $
            127




(1)
            Bad
      debt provision relates to estimated losses due to collectability issues,
      which is included in general and administrative

              expenses in the consolidated
      statement of operations.(2)
            Deductions, net
      of recoveries, primarily relate to receivable write-offs, but also include
      recoveries of previously written off
  receivables.




F-10
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




4.    NOTES
RECEIVABLE





Notes receivable at December 31, 2007
and 2006 is as follows:




2007
            
            
            2006Blackstone
            
            $
            1,291
            
            
            $
            1,415Other
            
            
            146
            
            
            
            95Total notes
      receivable
            
            
            1,437
            
            
            
            1,510Less: current
      portion
            
            
            234
            
            
            
            146Notes receivable– long-term
      portion
            
            $
            1,203
            
            
            $
            1,364





In the fourth quarter
of 2004, the US Hydro’s Blackstone Project (“Blackstone”) and New England Power
(“NEP”) agreed to terminate their 1989 power purchase agreement. As per the
terms of the Termination and Release Agreement, Blackstone now has the right to
sell its production of electricity to any party it chooses. In addition,
beginning January 2005, NEP began paying Blackstone $16 permonth and will continue
to do so through February 2010. NEP has also agreed to make a lump-sum payment
of $1,000 to Blackstone onFebruary 15, 2010.
These payments are being made to compensate Blackstone for the cancellation of
the fifteen years remaining on the original agreement.The Fund recorded
interest income on notes receivableof $68and $74
forthe
years ended December 31, 2007 and 2006, respectively, which is included in the
consolidated statements of operations.





5.    PROPERTY,
PLANT AND EQUIPMENT





At December 31, 2007 and 2006, property,
plant and equipment at cost and accumulated depreciation is as
follows:





2007
            
            
            2006Land
            
            $
            186
            
            
            $
            186HEGF
            
            
            1,139
            
            
            
            1,110Water desalinization
      facilities
            
            
            30,938
            
            
            
            28,516Office
      equipment
            
            
            535
            
            
            
            51832,798
            
            
            
            30,330Less: accumulated
      depreciation
            
            
            (13,961)
            
            
            
            (11,141)$
            18,837
            
            
            $
            19,189





For the years ended December 31, 2007
and 2006, depreciation expensewas $2,426 and $2,337, respectively, which is
included in cost of revenues.





6. GOODWILL AND
INTANGIBLES




At December 31, 2007 and 2006, the gross
and net carrying amounts of intangible assets is as follows:





2007
            
            
            2006Electric power sales
      contracts
            
            $
            10,754
            
            
            $
            10,754Water
rights
            
            
            321
            
            
            
            32111,075
            
            
            
            11,075Less: accumulated
      amortization
            
            
            (7,626)
            
            
            
            (6,449)Intangibles,
      net
            
            $
            3,449
            
            
            $
            4,626Goodwill
            
            $
            227
            
            
            $
            227




Electric
power sales contractsarebeing
amortized over their duration on a straight-line basis. As of December 31, 2007,
the weighted average remaining life of electric power sales contracts was 5years with the shortest remaining duration being 1 year and the longest
remaining duration being 17years. As
of December 31, 2007, the weighted average remaining life of water rights was 27
years.For the years ended December 31, 2007 and 2006, amortization
expense was$1,177and $1,272,respectively,
which is included in cost of
revenues.


F-11
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




The Fund expects to record amortization
expense during the next five years as follows:




Year
      Ended December 31,2008
            
            $
            1,1242009
            
            
            9622010
            
            
            9622011
            
            
            232012
            
            
            23





7.   ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)





The Fund’s other comprehensive income
(loss), which is reported in the accompanying consolidated statement of
operations consists of the net income (loss), foreign currency translation
adjustments and unrealized gains on marketable
securities.





As
of December 31, 2007 and 2006, thecumulative
foreign currency translation loss was $7,761and
$7,685,
respectively. As of December 31, 2007 and 2006, cumulative unrealized loss
onmarketable
securities was$0
and$1,
respectively.





8.   INVESTMENTS





United KingdomLandfill Gas
Projects





In May 1999, RUK was formed as aNew Jerseylimited liability company and was
re-domiciled toDelawarein December 2002. RUK’s operations,
through its subsidiary, CLPE Holdings Limited (“CLP”), included extracting
methane-containing gas from landfill sites inEngland,ScotlandandWales, the use of that gas as fuel for
generating electricity and the sale of that electricity.





On January 23, 2007, RUK
entered into a sale agreement (the “Sale Agreement”) along with Arbutus Energy
Ltd. (Jersey)(“Arbutus”), and Ridgewood ROC 2003 LLC
(“ROC I”), Ridgewood ROC II 2003 LLC (“ROC II”), Ridgewood ROC III 2003 LLC (“ROC III”),
Ridgewood ROC IV 2004 LLC (“ROC IV”), and together with ROC I, ROC II and ROC
III, (the “Ridgewood ROCs”), each of which is a wholly-owned subsidiary of a
corresponding Ridgewood Renewable PowerBank Fund (the “PowerBank Funds”), as
sellers (collectively, the “Sellers”), with MEIF LG Energy Limited (the
“Buyer”), as the purchaser.





On February 22, 2007,
RUK completed the sale (the “Sale”)to the Buyerof all of theissued and outstandingshares ofCLP (the
“Shares”).Under the Sale
Agreement,theBuyer acquired (i) 100% of the issued
and outstandingShares from RUK and Arbutus and (ii)
substantiallyall of the assets (the “Assets”) of the PowerBank Funds. The
Assets and the Shares constitute all the landfill gas business,located in theUnited Kingdom,of the Fund, Trust V and the PowerBank
Funds.




The gain
on disposal represents proceeds, less transaction costs and the net asset value
of CLP, plus the reversal of previously recorded foreign currency translation
adjustments. The Managing Shareholder waived its right to receive its 1% of the
distributions from these transactions. As a result, the gain from the Sale and
related cash distributions are allocated solely to Investor
Shares.





The Sellers gave a number of warranties
and indemnities to the Buyer in connection with theSalethat it considered typical of such
transactions. Should there be a breach of the warranties or should an indemnity event occur, the Buyer could make claims against the
Sellers including the Fund. Management of the Fund does not believe there is a
material likelihood that such a claim will arise or that, should such a claim
arise, the Fund would incur a material liability. This belief is based, in part,
on the Sellers’ having purchased warranty and indemnity insurance to minimize
such risk.There are no
current plans to reserve or provide an escrow for the contingent liabilities
presented by these warranties and indemnities.As ofMarch 26, 2008, the Fund is not aware of anysuchclaims.





F-12
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




Summarized balance sheet data for RUK at
December 31, 2007 and 2006 is as follows:





2007
            
            
            2006Current
      assets
            
            $
            921
            
            
            $
            25,631Noncurrent
      assets
            
            
            -
            
            
            
            74,893Total
      assets
            
            $
            921
            
            
            $
            100,524Current
      liabilities
            
            $
            7
            
            
            $
            30,373Noncurrent
      liabilities
            
            
            -
            
            
            
            71,220Members’ equity
      (deficit)
            
            
            914
            
            
            
            (1,069)Liabilities and members’
      equity
            
            $
            921
            
            
            $
            100,524Fund share of RUK
      equity
            
            $
            277
            
            
            $
            -





Summarized statements of operations data
for RUK for the years ended December 31, 2007 and 2006 is as
follows:





2007
            
            
            2006Revenues
            
            $
            -
            
            
            $
            44,751Cost of
      revenues
            
            
            -
            
            
            
            (36,872)Other income
      (expense)
            
            
            119
            
            
            
            (9,162)Total income
      (expense)
            
            
            119
            
            
            
            (46,034)Gain on disposition of
      CLP
            
            
            54,979
            
            
            
            -Net income
      (loss)
            
            $
            55,098
            
            
            $
            (1,283)Fund share of  income
      (loss) in RUK
            
            $
            16,423
            
            
            $
            (65)





9.  LONG-TERM
DEBT





Following is a summary of long-term debt
at December 31, 2007 and 2006:





2007
            
            
            2006Total long-term
      debt
            
            $
            1,836
            
            
            $
            2,629-
      Sinai
            
            
            1,836
            
            
            
            2,061-
      REFI
            
            
            -
            
            
            
            136-USHydro
            
            
            -
            
            
            
            432




F-13
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




2007
            
            
            2006Current
      maturity
            
            $
            387
            
            
            $
            855-
      Sinai
            
            
            387
            
            
            
            287-
      REFI
            
            
            -
            
            
            
            136-USHydro
            
            
            -
            
            
            
            4322007
            
            
            2006Long-term
      portion
            
            $
            1,449
            
            
            $
            1,774-
      Sinai
            
            
            1,449
            
            
            
            1,774-
      REFI
            
            
            -
            
            
            
            --USHydro
            
            
            -
            
            
            
            -





The Sinai Environmental Services S.A.E.
(“Sinai”, a consolidated subsidiary of NEH) loan, which is secured by a part of
its assets, bears interest at 11.0% per annum and is non-recourse to the Fund. A
provision of the loan restricts Sinai from paying dividends to its shareholders
or obtaining credit from other lenders. The loan was in default prior to the
acquisition of Sinai by NEH and remained in default through the second quarter
of 2005. In the second quarter of 2005, the lender and Sinai entered into a
revised agreement that included in its terms a modified payment schedule. The
revised terms provide for increasing monthly payments over six years starting at
172,000 Egyptian pounds and increasing to 357,000 Egyptian pounds (or
approximately $29 to $61 at loan inception exchange rates), including interest,
and having a final maturity date of May 1, 2011. As part of the 2005 settlement,
the lender agreed to suspend, from the time of the settlement, the obligation of
Sinai to repay 1 million Egyptian pounds (approximately $176 at the then
settlement exchange rate) of the amount outstanding. If Sinai makes all the
scheduled payments in accordance with the modified payment schedule, the
suspension will become permanent and the 1 million Egyptian pounds forgiven. In
case Sinai fails to make all scheduled payments on time, the suspension will be
revoked and the total of the then remaining principal payments required will be
increased by 1 million Egyptian pounds. As of the filing date, Sinai has been in
compliance with the revised agreement since the inception of the
agreement.





During the third quarter of 2002,
Ridgewood Egypt For Infrastructure, LLC (Egypt) (“REFI”) executed a term loan
agreement with its principal bank which is secured by certain plant assets of
REFI. The bank provided a loan of 12,500,000 Egyptian pounds (approximately
$2,688) that is being repaid in quarterly principal installments of 781,000
Egyptian pounds (approximately $168) starting June 2003. In March 2007, REFI
paid the remaining outstanding balance.





Five of US Hydro’s hydro-electric power
plants were financed by a term loan containing rights for the borrower to re-set
interest rates from time-to-time. This credit facility was collateralized by
five hydro-electric plants and notes receivable owned by US Hydro.  In
September 2007, US Hydro paid the remaining outstanding
balance.





Scheduled principal repayments of the
Fund’s long-term debt at December 31, 2007 are as follows:





2008
            
            $
            3872009
            
            
            4842010
            
            
            6502011
            
            
            315Total
            
            $
            1,836





10.  COMMITMENTS AND
CONTINGENCIES





The US Hydro facility atUnionFallshas leased the site under a
non-cancelable long-term lease which terminates in 2024. Rent expense on astraight-line basis at this
site was $295 for each of the years ended December 31, 2007 and 2006. The
facility of US Hydro at theBoxCanyondam inSiskiyou County,Californiais owned subject to a ground lease
which US Hydrohas
accounted foras an
operating lease. The lease terminates on December 31, 2010, at which time US
Hydro is obligated to transfer the facility at the site to the Siskiyou County
Flood Control and Water Conservation District. The lease payment forBoxCanyonwas $500 for each of the
yearsended December 31,
2007 and 2006.


F-14
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




Minimum lease payments at December 31,
2007 are as follows:





2008
            
            $
            7102009
            
            
            7202010
            
            
            7322011
            
            
            2442012
            
            
            255Thereafter
            
            
            4,266Total
            
            $
            6,927





The Fund has certain other leases that
require payments based upon a percentage of the annual gross revenue of the
respective hydro-electric plant less any taxes or other fees paid to the
lessors. There are no minimum rents required and these commitments are not
included in the amounts presented above. Rent expense for these hydro-electric
plants for the years ended December 31, 2007 and2006, was $8and $11,respectively.





In accordance with Egyptian company law,
theEgyptprojects are required to record 5% of
annual net profits to a statutory reserve which will cease when the reserve
reaches 50% of issued capital. The statutory reserve is not eligible for
distribution to members. The statutory reserve amountedto $381and$223 at December 31, 2007 and 2006,
respectively.





On August
16, 2006, the Managing Shareholder and affiliates of the Fund filed lawsuits
against the former independent registered public accounting firm for the Fund,
Perelson Weiner, LLP (“Perelson Weiner”), in New Jersey Superior Court. 
The suits alleged professional malpractice and breach of contract in connection
with audit and accounting services performed by Perelson Weiner. On October 20,
2006, Perelson Weiner filed a counterclaim against the Fund and its affiliates
alleging breach of contract due to unpaid invoices, totaling $1,188. Discovery
is ongoing and no trial date has been set. The costs and expenses of the
litigation are being paid for by the Managing Shareholder and affiliated
management companies and not the underlying investment funds, including the
Fund.





On December 30,2005, an investor in the Fund and entities
affiliated with the Fund, Paul Bergeron, on behalf of himself and asTrustee for the Paul BergeronFund(the “Plaintiff”), filed a Complaint in
Suffolk Superior Court, Commonwealth of Massachusetts,Paul
Bergeron v. Ridgewood Electric PowerTrustV,et
al., Suffolk Superior Court, Docket No.
07-1205 BLS1(“Bergeron
I”).The action was brought
against, among others, the Managing Shareholder and persons who are or were
officers of the Managing Shareholder alleging violations of the Massachusetts
Securities Act, as well as breach of fiduciary duty, fraud, breach of contract,
negligent misrepresentation and unjust enrichment, all related to a set of
alleged facts and allegations regarding the sale of securities of funds
(including the Fund) managed by the Managing Shareholder or affiliates of the
Managing Shareholder which were sold in private offerings and the operation of
those funds subsequent to the sale. The Plaintiff is seeking damages of
$900 plus interest and other damages to be determined at
trial.




On January 27,2006, the Plaintiff, on its own initiative,
filed an Amended Complaint and Jury Demand in Massachusetts Superior Court,
adding a non-diverse
broker-dealer to the action.On February 22,2006, the case was removed by the defendants
to United States District Court for the District of Massachusetts on the basis
of diversity jurisdiction, but the defendants alleged that the only non-diverse
party had been fraudulently
joined by the Plaintiff.On February 27,2006, a motion to dismiss was filed by the
defendants in the District
Court.On April 12,2006, the District Court affirmed its
jurisdiction over the case, and dismissed the non-diverse
party.On January 10,2007, the District Court dismissed
Plaintiff’s unjust enrichment case, but denied the motion of the defendants to
dismiss as to the remaining
claims.Presently,
attorneys for the parties are involved in discovery, with a magistrate judge
having decided motions to compel brought by the parties during thesummer of2007.A new scheduling order is in the process
of being developed by the parties for approvalby the District
Court. No trial date
has been set.





OnMarch
20, 2007,
the Plaintiff commenced a derivative action, in Suffolk Superior Court,CommonwealthofMassachusetts.Paul
Bergeron v. Ridgewood Electric Power Trust V,et
al.,SuffolkSuperior
Court, Docket No. 07-1205BLS1
(“Bergeron II”).  The Plaintiff joined theFundand
affiliated entities, including the Managing Shareholder and a person who is an
officer of the Managing Shareholder, alleging that the allocation of the
proceeds from the sale of certain assets of theFundand
affiliated entities to an unaffiliated entity was unfair and sought an
injunction prohibiting the distribution to shareholders of such
proceeds.  The Superior Court denied the request by the Plaintiff for
an injunction.  The case was then removed by the defendants to the
same District Court as Bergeron I, but the District Court remanded the case to
Massachusetts Superior Court onJuly
5, 2007,
where it is presently pending.  On February 29, 2008, the Plaintiff
filed an amended complaint in Bergeron II adding two additional investors, one
in Trust V and one intheFund,
as additional plaintiffs.  OnMarch
12, 2008,
the defendants’ Motion to Dismiss Bergeron as a plaintiff in the Bergeron II
matter due to potential conflicts he has with the Bergeron I matter was denied
by the Superior Court. Discovery is
ongoing and notrial
date has been set.


F-15
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)




All defendants in Bergeron I and
Bergeron II deny the allegations and intend to defend both actions
vigorously.





RUK gave a number of warranties and
indemnities to the purchaser of CLP. Should there be a breach of the warranties
or should an indemnifiable event occur, the buyer could make claims against RUK.
RUK purchased warranty and indemnity insurance to minimize such risk. As of
March 26, 2008, the Fund is unaware of any such claims.





The Fund
is subject to legal proceedings involving ordinary and routine claims related to
its business. The ultimate legal and financial liability with respect to
such matters cannot be estimated with certainty and requires the use of
estimates in recording liabilities for potential litigation settlements.
Estimates for losses from litigation are disclosed if considered reasonably
possible and accrued if considered probable after consultation with outside
counsel. If estimates of potential losses increase or the related facts and
circumstances change in the future, the Fund may be required to record
additional litigation expense.  While it is not possible to predict
the outcome of the litigation discussed above with certainty and some lawsuits,
claims or proceedings may be disposed of unfavorably to the Fund, based on its
evaluation of matters which are pending or asserted, the Fund’s management
believes the disposition of such matters will not have a material adverse effect
on the Fund’s business or consolidated financial statements.





11.  OTHER
LIABILITIES





The Fund’sEgyptprojects have an arrangement with a
consultant that provides marketing, construction and management services inEgypt. The consultant receives, in total, a
development fee of 3% of the capital cost of the completed projects, an annual
management fee of the greater of 0.3% of the capital cost of completed projects
and $180, plus reimbursement of out-of-pocket costs incurred in performing its
duties under the agreement. The consultant may also receive incentive payments
based on the performance of REFI. The agreement has a term of one year and is
automatically renewed annually. The agreement may be terminated by either party
upon written notice.





NEH had additional consulting
arrangements with two individuals for services related to its investment inEgypt. In both cases, NEH has reached
agreements with the individuals settling the obligations of the parties with
respect to the consulting agreements by agreeing to terminate the arrangements
in exchange for a series of payments. No future services are to be provided by
the individuals involved.





In the case of the first settlement, on
November 21, 2003, NEHagreed to make a single payment to the
party of $281, and to make monthly installment payments of $8, until June 1,
2013. NEH had a liability of $379at December 31, 2007 to reflect this
obligation.





In the case of the second settlement, on
April 7, 2005, NEH agreed with the party to make quarterly payments of $30 for
so long as theEgyptprojects remain operational. In the
event that theEgyptprojects are sold, an amount equal to
the present value of the subsequent ten-years of payments would be made in
settlement of the remaining obligation. NEH had a liability of $842at December31, 2007 to reflect this
obligation.





Schedule offuture discounted principal payments
related to the settlements as of December 31, 2007 are as
follows:




2008
            
            $
            922009
            
            
            1012010
            
            
            1122011
            
            
            1232012
            
            
            137Thereafter
            
            
            656Total
            
            $
            1,221




F-16
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)





12.  INCOME
TAXES





The components of income (loss) before
provision for incometaxes
for the years ended December 31, 2007 and 2006 are as
follows:





2007
            
            
            2006United
    States
            
            $
            (3,519
            )
            
            $
            (1,226
            )Foreign
            
            
            17,360
            
            
            
            146$
            13,841
            
            
            $
            (1,080
            )





The foreign component includes income of
$937 and $211 from NEH for the years ended December 31, 2007 and 2006,
respectively, that is
subject to an Egyptian tax holiday that expires on December 31, 2010. It also
includes foreign income (loss)of$16,423 and ($65), as of December 31,
2007 and 2006, respectively, from RUK which is reported net of tax effect
consistent with the equity method of accounting.





The provision for income taxes for the
years ended December 31, 2007 and 2006 consists of:





2007
            
            
            2006CurrentState
            
            $
            7
            
            
            $
            152DeferredFederal
            
            
            (72
            )
            
            
            (159
            )State
            
            
            (852
            )
            
            
            (70
            )Foreign
            
            
            394
            
            
            
            -Income tax
      benefit
            
            $
            (523
            )
            
            $
            (77
            )





Deferred income taxes reflect the tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes.The Fund
recorded income tax expense for NEH operations resulting from book to tax
differences that are scheduled to exist at the expiration of the tax holiday.
The components of the Fund’s
deferred income tax assets and liabilities at December 31, 2007 and 2006 are as
follows:





2007
            
            
            2006Deferred tax
      assetNOL carryforward
      –  noncurrent
            
            $
            2,134
            
            
            $
            1,578Less: valuation
      allowance
            
            
            (481)
            
            
            
            (406)Total deferred tax
      asset
            
            
            1,653
            
            
            
            1,172Deferred tax
      liabilitiesAmortization and depreciation –
      noncurrent
            
            
            (1,992)
            
            
            
            (2,029)Net deferred tax
      liabilities
            
            $
            (339)
            
            
            $
            (857)




The Fund’s effective tax rate differs
from the statutory federal income tax rate for the years ended December 31, 2007
and 2006 as follows:





2007
            
            
            2006US federal income taxes at the
      statutory rate
            
            
            0%
            
            
            
            0%Loss (income) subject to tax at
      the subsidiarylevel
      (at statutory rate)
            
            
            -3%
            
            
            
            18%State taxes
            
            
            -1%
            
            
            
            -5%Effective tax
      rate
            
            
            -4%
            
            
            
            13%




F-17
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)


At
December 31, 2007, US Hydro had a Federal net operating loss
(NOL) carryforward of $4,861,
whichwill be expiring in 2023through 2026.USHydro
believes it is more likely than not that it will realize the benefit of its net
operating losses. Accordingly, a valuation allowance has not been recorded
against the related deferred tax asset. The ability to realize the benefit of
the net operating losses may be limited should US Hydro or the Fund undergo an
ownership change within the meaning of IRC Section
382.





In addition, at December 31, 2007, US
Hydrohad a state NOL
carryforward of $10,413, which willbe expiring in 2023 through 2026.USHydro does not believe it is more
likely than not that it will realize the benefit of this NOL carryforward as it
does not project there will be future taxable income in the entity and
jurisdiction to which this NOL was generated. Accordingly, US Hydro has recorded
a valuation allowance against the full amount of the related deferred tax
asset.





13.  TRANSACTIONS WITH MANAGING
SHAREHOLDER AND AFFILIATES





The Fund operates pursuant to the terms
of a management agreement (“Management Agreement”). Under the terms of the
Management Agreement, the Managing Shareholder provides certain management,
administrative and advisory services and office space to the Fund. In return,
the Fund is obligated to pay the Managing Shareholder an annual management fee
equal to 2.5% of the total contributed capital of the Fund, which equals $1,645
as of December 31, 2007 and 2006, as compensation for such services. The
management fee is to be paid in monthly installments and, to the extent that the
Fund does not pay the management fee on a timely basis, the Fund accrues
interest at an annual rate of 10% on the unpaid balance.




For the
year ended December 31, 2007, the Fund made management fee payments to the
Managing Shareholder of $823. For the year ended December 31, 2006, the
Managing Shareholder waived its right to receive its management fee. During 2007
and 2006, the Managing Shareholder forgave $823 and $1,645 of unpaid accrued
management fees, respectively. In
the fourth quarter of 2007, the Managing Shareholder waived its right to
reimbursement of $934, relating to professional service fees of the Fund. Any
waivers, or forgiveness, by the Managing Shareholder are recorded by the Fund as
a deemed capital contribution.The shareholders of the Fund other than
the Managing Shareholder were allocated 99% of each contribution and the
Managing Shareholder was allocated 1% so that the amount of the
contribution allocated offsets the allocation of the recorded
expense.




In 2007
and 2006, the Fund accrued interest expense of $11 and $92, respectively on
accrued but unpaid management fees. The interest accrued has been waived by the
Managing Shareholder and recorded as a deemed capital contribution in the period
waived.





Under
the Management Agreement with the Managing Shareholder, Ridgewood Power
Management (“RPM”) provides management, purchasing, engineering, planning and
administrative services to the projects operated by the Fund. RPM charges the
projects at its cost for these services and for the allocable amount of certain
overhead items. Allocations of costs are on the basis of identifiable direct
costs or in proportion to amounts invested in projects managed by RPM. For the
years ended December 31, 2007 and 2006, RPM charged the US Hydro projects$689
and $624, respectively, for overhead items allocated in proportion to the amount
invested in projects managed. In addition, for the years ended December 31, 2007
and 2006, RPM charged the projects$4,813and $3,827, respectively, for direct expenses incurred.  These
charges may not be indicative of costs incurred if the Fund were not operated by
RPM.





Under
the Declaration of Trust, the Managing Shareholder is entitled to receive,
concurrently with the shareholders of the Fund other than the Managing
Shareholder, 1% of all distributions from operations made by the Fund in a year
until the shareholders have received distributions in that year equal to 12% of
their equity contribution. Thereafter, the Managing Shareholder is entitled to
receive 25% of the distributions for the remainder of the year. The Managing
Shareholders is entitled to receive 1% of the proceedsfrom
dispositions of Fund property until the shareholders other than the Managing
Shareholder, have received cumulative distributionsequal
to their original investment (“Payout”). After Payout, the Managing Shareholder
is entitled to receive 25% of all remaining distributions of the Fund. For the
years ended December 31, 2007 and 2006, distributions to the Managing
Shareholder were$3and
$17, respectively. The Fund has not yet reached
Payout.





Income is allocated to the Managing
Shareholder until theprofits so allocated equal
distributionsto the
Managing Shareholder. Thereafter, income is allocated among the shareholders
other than the Managing Shareholder in proportion to their ownership of Investor
Shares. If the Fund has net losses for a fiscal period, the losses are allocated
99% to the shareholders other than the Managing Shareholder and 1% to the
Managing Shareholder, subject to certain limitations as set forth in the
Declaration of Trust. Amounts allocated to shareholders other than the Managing
Shareholder are apportioned among them in proportion to their capital
contributions.





Under the terms of the Declaration of
Trust, if the Adjusted Capital Account (as defined in the Declaration of Trust)
of a shareholder other than the Managing Shareholder would become negative using
General Allocations (as defined in the Declaration of Trust), losses and
expenses will be allocated to the Managing Shareholder. Should the Managing
Shareholder’s Adjusted Capital Account become negative and items of income or
gain occur, then such items of income or gain will be allocated entirely to the
Managing Shareholder until such time as the Managing Shareholder’s Adjusted
Capital Account becomes positive. This mechanism does not change the allocation
of cash, as discussed above.


F-18
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)





RRP owns one Investor Share of the Fund.
The Fund granted the Managing Shareholder a single Management Share representing
the Managing Shareholder’s management rights and rights to distributions of cash
flow.





On June 26, 2003, the Managing
Shareholder, entered into a Revolving Credit and Security Agreement with
Wachovia Bank, National Association. The agreement, as amended, allows the
Managing Shareholder to obtain loans and letters of credit of up to $6,000 for
the benefit of the funds and funds that it manages. As part of the agreement,
the Fund agreed to limitations on its ability to incur indebtedness, and liens
and to provide guarantees. In 2007, the Managing Shareholder and Wachovia Bank
agreed to extend the Managing Shareholder’s line of credit, through May 31,
2008.




The Fund records short-term payables to
and receivables from other affiliates in the ordinary course of business. The
amounts payable to and receivable from the other affiliates do not bearinterest.At December 31, 2007 and 2006,
the Fund had outstandingreceivables andpayables as
follows:





Due from
              
              
              Due to2007
              
              
              2006
              
              
              2007
              
              
              2006RPM
              
              $
              -
              
              
              $
              -
              
              
              $
              406
              
              
              $
              245RRP
              
              
              100
              
              
              
              107
              
              
              
              -
              
              
              
              -Trust V
              
              
              295
              
              
              
              211
              
              
              
              -
              
              
              
              -Egypt Fund
              
              
              -
              
              
              
              -
              
              
              
              98
              
              
              
              127RUK
              
              
              -
              
              
              
              -
              
              
              
              196
              
              
              
              312Other
      Affiliates
              
              
              -
              
              
              
              12
              
              
              
              -
              
              
              
              -Total
              
              $
              395
              
              
              $
              330
              
              
              $
              700
              
              
              $
              684




14.  FINANCIAL INFORMATION BY
BUSINESS SEGMENT AND LOCATION





In 2007 and 2006, revenues were recorded
from customers of US Hydro andEgyptprojects. The financial statements of
RUK are not consolidated with those of the Fund and, accordingly, its revenues
are not considered to be operating revenues. For the years ended December 31,
2007 and 2006, financial information by geographic location was as
follows:





2007
            
            
            2006US
            
            
            Egypt
            
            
            US
            
            
            EgyptTotal
assets
            
            $
            9,777
            
            
            $
            22,342
            
            
            $
            9,810
            
            
            $
            21,103Revenues
            
            
            3,467
            
            
            
            10,270
            
            
            
            5,357
            
            
            
            8,161




The Fund has two customers which
accountedfor 68.8% and
75.5% of US sourced revenue in 2007 and 2006, respectively. The Fund has two
customers which accounted for 14.2%and 16.5% ofEgyptsourced revenue in 2007 and 2006,
respectively.





The Fund manages and evaluates its
operations in two reportable business segments: power generation and water
desalinization. These segments have been classified separately by the
similarities in economic characteristics and customer base. Common services
shared by the business segments are allocated on the basis of identifiable
direct costs, time records or in proportion to amount invested in projects
managed by RPM.


F-19
 Table of Contents
 THERIDGEWOOD
POWER GROWTH
FUND
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 (dollar amounts in
thousands, except per share data)


The financial data for business segments
for the years ended December 31, 2007, and 2006 are as follows:
(unaudited):





Power2007
              
              
              2006Revenues
              
              $
              3,467
              
              
              $
              5,357Depreciation and
      amortization
              
              
              1,219
              
              
              
              1,302Gross
profit
              
              
              761
              
              
              
              2,629Interest
    income
              
              
              68
              
              
              
              74Interest
      expense
              
              
              20
              
              
              
              43Income tax
      benefit
              
              
              (918
              )
              
              
              (77
              )Total
assets
              
              
              6,994
              
              
              
              8,373Capital
      expenditures
              
              
              28
              
              
              
              28Goodwill
              
              
              227
              
              
              
              227Water2007
              
              
              2006Revenues
              
              $
              10,270
              
              
              $
              8,161Depreciation and
      amortization
              
              
              2,384
              
              
              
              2,307Gross
profit
              
              
              3,946
              
              
              
              1,889Interest
    income
              
              
              21
              
              
              
              10Interest
      expense
              
              
              285
              
              
              
              209Income tax
      expense
              
              
              395
              
              
              
              -Total
assets
              
              
              22,342
              
              
              
              21,103Capital
      expenditures
              
              
              1,540
              
              
              
              680Corporate2007
              
              
              2006Interest
    income
              
              $
              86
              
              
              $
              12Interest
      expense
              
              
              11
              
              
              
              93Equity in income (loss) from
      RUK
              
              
              16,423
              
              
              
              (65
              )Total
assets
              
              
              2,783
              
              
              
              1,437Consolidated2007
              
              
              2006Revenues
              
              $
              13,737
              
              
              $
              13,518Depreciation and
      amortization
              
              
              3,603
              
              
              
              3,609Gross
profit
              
              
              4,707
              
              
              
              4,518Interest
    income
              
              
              175
              
              
              
              96Interest
      expense
              
              
              316
              
              
              
              345Income tax
      benefit
              
              
              (523
              )
              
              
              (77
              )Total
assets
              
              
              32,119
              
              
              
              30,913Capital
      expenditures
              
              
              1,568
              
              
              
              708Goodwill
              
              
              227
              
              
              
              227Equity in income (loss) from
      RUK
              
              
              16,423
              
              
              
              (65
              )









F-20