Table of
Contents


UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549





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, 2009


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





THE
RIDGEWOOD POWER GROWTH FUND


(Exact Name of
Registrant as Specified in Its Charter)


Delaware
            
            22-3495594(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            
            (I.R.S.
      Employer Identification No.)





1314
      King Street, Wilmington, DE 19801(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. Yes o    No
þ





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. Yes o    No
þ





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.  Yes þ   No
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).  Yes o   No
o





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.  þ





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




Large
      accelerated filer   o
            Accelerated
      filer   o
            Non-accelerated
      filer   o
            Smaller
      reporting company   þ(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). Yes  o  No  þ





There is
no market for the Investor Shares. The number of Investor Shares outstanding at
February 28, 2010 was 658.2067.







Table of Contents




FORM
10-K




TABLE
OFCONTENTS





PART
I


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





Table of Contents




Forward-Looking
Statements




Certain
statements discussed in Item 1. “Business”, Item 3. “Legal Proceedings”, Item 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 the Fund’s plans, objectives and
expectations for future events and include statements about the Fund’s
expectations, beliefs, plans, objectives, intentions, assumptions and other
statements that are not historical facts. These statements are based upon
management’s expectations, opinions and estimates as of the date they are made.
Although management believes that the expectations, opinions and estimates
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 the Fund’s control, which could cause actual
results, performance and achievements to differ materially from the 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:





·
            possible
      contingent liabilities and risks associated with the dissolution and
      liquidation of the Fund, including, without limitation, settlement of the
      Fund’s liabilities and obligations, and the outcome of the matters
      described in Item 3. “Legal Proceedings” of this
  report,


·
            costs
      incurred in connection with the carrying out of the plan of liquidation
      and dissolution of the Fund, and


·
            the
      actual timing of the completion of the liquidation process, including the
      amount and timing of any liquidating
  distributions.





Additional
information concerning the factors that could cause actual results to differ
materially from those in the forward-looking statements is contained in this
Annual Report on Form 10-K.  Any forward-looking statement that the
Fund makes, speaks only as of the date of this report. The Fund undertakes no
obligation to publicly update or revise any forward-looking statements or
cautionary factors, as a result of new information, future events or otherwise,
except as required by law.





PART
I




ITEM
1.  BUSINESS





Overview





The
Ridgewood Power Growth Fund (the “Fund”) is a Delaware trust formed on February
18, 1997 primarily to make investments in projects and businesses in the energy
and infrastructure sectors both in the US and abroad. The Managing Shareholder
of the Fund is Ridgewood Renewable Power LLC, a New Jersey limited liability
company (the “Managing Shareholder” or “RRP”). As the Managing Shareholder, RRP
has direct and exclusive control over the management and operations of the
Fund.




Historically,
the Fund focused primarily on projects fueled by renewable sources of fuel and
on water treatment facilities in remote locations serving hotel resort
developments. These projects allowed 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, 2009, the Fund had one remaining
operating investment, located in Egypt (“Ridgewood Egypt”).




On or
about February 8, 2010, the Managing Shareholder, on behalf of the Fund,
solicited the approval of the Fund’s holders of investor shares of beneficial
interest (“Investor Shares”) for the sale of the Egypt business. As the Egypt
business represented a significant portion of Fund’s assets, the Managing
Shareholders informed the Fund’s shareholders that this sale, if completed,
would cause the Fund to commence its liquidation and dissolution. As part of the
solicitation process, shareholders received a form of the Fund’s Plan of
Liquidation and Dissolution of the Fund (the “Plan of Dissolution”). The
shareholders of both the Fund and an affiliated fund approved the sale and on
March 2, 2010, the Egypt business was sold and the Fund’s Plan of Dissolution
became effective. The Managing Shareholder cannot predict when liquidation of
the Fund will be concluded primarily due to on-going litigation discussed in
Item 3. “Legal Proceedings”.





The Fund
owned hydro-electric projects that were sold in November 2009, as discussed
below.





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.





3
 Table of Contents




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.




RRP
performed, or arranged for the performance of, the operation and maintenance of
the projects invested in by the Fund and continues to perform the management and
administrative services required for Fund operations. Among other services, RRP
administers the accounts, including tax and other financial information, and
handles relations with the shareholders. RRP also provides the Fund with office
space, equipment and facilities and other services necessary for its operation.
Effective upon the approval of the Plan of Dissolution, the Managing Shareholder
has sole authority to dissolve, liquidate and terminate the Fund.




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, which have not been, and are
not expected to be, achieved by the Fund. 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.





Ridgewood
Egypt





In 1999,
the Fund and Ridgewood Electric Power Trust V (“Trust V”) jointly formed and
funded Ridgewood Near East Holdings LLC and its wholly-owned subsidiary, RW
Egyptian Holdings LLC (collectively, “NEH”) to develop electric power and water
purification plants for resort hotels along the Red Sea in Egypt. In 2000, the
Fund made additional investments and acquired majority ownership of NEH, which
controls and owns all contractual rights to the ownership of Ridgewood Egypt for
Infrastructure LLC (Egypt) (“REFI”). In 2001, the Ridgewood/Egypt Fund (“Egypt
Fund”), an affiliate of Trust V and the Fund, made contributions to NEH in
exchange for a noncontrolling interest.





In 2001,
NEH, through REFI, formed a wholly-owned subsidiary and also purchased a 28%
equity interest in Sinai For Environmental Services S.A.E. (“Sinai”), which owns
a 5,750 cubic meters (approximately 1.5 million gallons) per day water
desalinization plant in Egypt. In February 2002, REFI made an additional
investment to increase its ownership to 53% and gain control of Sinai. From 2006
through 2008, REFI acquired additional direct and indirect interests in Sinai,
bringing its total ownership in Sinai to 75.9%. The Fund owns 68.1%, Trust V
owns 14.1% and Egypt Fund owns 17.8% of NEH. The assets of REFI are located in
Egypt.





As of
December 31, 2009, REFI, excluding Sinai, owned 31 projects having a capacity to
make 32,900 cubic meters (approximately 8.5 million gallons) of potable water
per day and electricity generating capacity of approximately 24 megawatts. The
projects generally sell their output under contracts and other arrangements at
prevailing market rates. 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 REFI control costs and increase reliability. The business of
REFI is managed and operated by employees of REFI, with its main office located
in Cairo, Egypt.




A portion
of the assets of Sinai are collateral for a Sinai bank term loan facility. REFI
and its subsidiaries qualify for income tax holidays that began to expire on
December 31, 2008.





On
December 10, 2009, NEH entered into a sale and purchase agreement whereby, NEH
would receive a return of a portion of its investments and simultaneously
dispose of all of its interest in REFI for cash to Mr. Zaki Girges, the general
manager of REFI and El Orouba for Water Desalination S.A.E., an Egyptian joint
stock company (“El Orouba”) owned by Mr. Girges and his family. The transaction
was subject to the approval by a majority of the shares held by shareholders of
the Fund and Egypt Fund, which was obtained on March 2, 2010.  On
March 2, 2010, the funds that own Ridgewood Egypt received gross proceeds, prior
to expenses, of $13 million; the gross proceeds allocated to the Fund totaled
$8.9 million. A summary of the terms and conditions of the transaction is
provided in a Current Report on Form 8-K filed with the United States Securities
and Exchange Commission (“SEC”) on December 21, 2009.




4
 Table of Contents




The
transaction agreements did not give the purchasers any rights to post-closing
claims for indemnification against NEH or any of the affiliated trusts. Under
the transaction agreements, all parties mutually agreed to release each other
from any and all claims they may have against each other. NEH and the Fund did
not make any representation or warranties in the connection with the
transaction.





US
Hydro





From
April 2000 through November 2002, the Fund and Trust V acquired hydro-electric
generating facilities from Synergics, Inc. The Fund owned 70.8% and Trust V
owned 29.2% of US Hydro.





On
November 20, 2009, subsidiaries of US Hydro entered into a purchase and sale
agreement and sold for cash, all of its equity interests in the US Hydro
projects to KEI (USA) Power Management Inc. and certain of its subsidiaries
(“KEI USA”), which are affiliated with Kruger Energy, Inc., a Canada-based
international company. The total gross purchase price of the sale, including a
post-closing adjustment made in 2010 for estimated working capital at the time
of the sale, totaled $5.4 million, of which $3.8 million was allocated to the
Fund. US Hydro retained ownership of a note receivable totaling $1.1 million,
which was assigned to the Fund and Trust V and was collected in full in February
2010, and various minor land parcels with an insignificant estimated fair value.
A summary of the terms and conditions of the sale is provided in a Current
Report on Form 8-K filed with the SEC on November 23, 2009.





The
sellers gave a limited number of representations and warranties to the buyers in
connection with the sale that are considered typical of such transactions.
Should there be a breach of those representations and warranties, the buyers
must first make a claim against an insurance policy purchased by the sellers for
claims arising from any such breach. As of the date of such filing, the Fund is
not aware of any such claims.





Insurance




The Fund
has in place, either directly or through investee companies, insurance typical
for activities such as those conducted by the Fund or its investee companies.
These policies include property and casualty, business interruption, workman’s
compensation and political risk insurance, 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 or its affiliates, and, prior to the sale
of REFI by employees of REFI.





Offices




The
principal office of the Fund is located at 1314 King Street, Wilmington,
Delaware, 19801 and its phone number is 302-888-7444. The Managing Shareholder’s
principal office is located at 14 Philips Parkway, Montvale, New Jersey, 07645
and its phone number is 201-447-9000.





ITEM
1A. RISK FACTORS




Not
required.




ITEM
1B.  UNRESOLVED STAFF COMMENTS




Not
applicable.





ITEM
2.     PROPERTIES




Information
regarding the Fund’s properties is contained in Item 1. “Business”.




ITEM
3.     LEGAL PROCEEDINGS





On
December 30, 2005, an investor in the Fund and several affiliated entities, Paul
Bergeron, on behalf of himself and as Trustee for the Paul Bergeron Trust
(“Bergeron”), filed a Complaint in the Federal District Court in
Massachusetts. The action was brought against, among others, the Managing
Shareholder and persons who are or were officers of the Managing Shareholder
(the “Defendants”). In June 2009, this lawsuit was settled with the Managing
Shareholder making a payment to Bergeron and purchasing its interests in funds
managed by the Defendants. The amount of the settlement allocated to the Fund by
the Managing Shareholder totaled $0.3 million.




5
 Table of Contents




On March
20, 2007, Bergeron commenced a derivative action, in Suffolk County Superior
Court, Commonwealth of Massachusetts. Bergeron joined the Fund and 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 the Fund and affiliated entities was unfair and sought
an injunction prohibiting the distribution to shareholders of such proceeds. The
Superior Court denied the request by the plaintiffs for an injunction. On
February 29, 2008, the plaintiffs filed an amended complaint adding two
additional investors, one in the Fund and one in Trust V, as additional
plaintiffs. Discovery is ongoing and a trial date is currently scheduled
for January 2011. While Bergeron is no longer a party to the derivative action,
the other plaintiffs continue to pursue this matter.





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
with a combined total of approximately $1.2 million. Discovery is ongoing and a
trial date is currently scheduled for May 17, 2010. The costs and expenses
of this litigation, including adverse judgments, if any, are being paid by the
Managing Shareholder and affiliated management companies and not the underlying
investment funds.





ITEM
4.    RESERVED




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
February 28, 2010, there were 1,346 holders of Investor Shares.





Dividends





Fund
distributions for the years ended December 31, 2009 and 2008 were as follows (in
thousands, except per share data):





2009
            
            
            2008Distributions
      to Investors
            
            $
            823
            
            
            $
            658Distributions
      per Investor Share
            
            
            1,250
            
            
            
            1,000





The Fund
did not make any distributions to the Managing Shareholder during 2009 and 2008.
The Fund anticipates making additional distributions to the holders of Investor
Shares if it is determined that the Fund has cash in excess of amounts needed to
satisfy its remaining liabilities and complete the liquidation
process.





ITEM
6.    SELECTED FINANCIAL DATA





Not
required.




6
 Table of Contents




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 the Fund’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. The Fund’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
“Forward-Looking Statements” and elsewhere  in this Annual Report on
Form 10-K.





Overview





The Fund
is a Delaware trust formed on February 18, 1997 primarily to make investments in
projects and businesses in the energy and infrastructure sectors both in the US
and abroad. RRP, a New Jersey limited liability company, is the Managing
Shareholder of the Fund and has direct and exclusive control over the management
and operations of the Fund.




Historically,
the Fund focused primarily on projects fueled by renewable sources of fuel and
on water treatment facilities in remote locations serving hotel resort
developments. These projects allowed 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, 2009, the Fund had one remaining
operating investment, located in Egypt.





The
Fund’s accompanying consolidated financial statements include the accounts of
the Fund and its majority-owned subsidiaries. The Fund owned a 70.8% interest in
US Hydro and the remaining 29.2% noncontrolling interest was owned by Trust V,
which was sold in November 2009. The Fund also owns a 68.1% interest in NEH and
the remaining noncontrolling interests are owned by Trust V (14.1%) and Egypt
Fund (17.8%), which was sold on March 2, 2010.





REFI owns
75.9%, through a combination of direct and indirect ownership, of Sinai. The
interests of Trust V and Egypt Fund, and the interests of the other owners of
Sinai, are presented as noncontrolling interests in the consolidated financial
statements.





On
November 20, 2009, subsidiaries of US Hydro entered into a purchase and sale
agreement and sold for cash, all of its equity interests in US Hydro projects to
KEI USA. The total gross purchase price of the sale, including a post-closing
adjustment made in 2010 for estimated working capital at the time of the sale,
totaled $5.4 million, of which $3.8 million was allocated to the Fund. A summary
of the terms and conditions of the sale is provided in a Current Report on Form
8-K filed with the SEC on November 23, 2009.





On
December 10, 2009, NEH entered into a sale and purchase agreement whereby, NEH
would receive a return of a portion of its investments and simultaneously
dispose of all of its interest in REFI. The transaction was subject to the
approval by a majority of the shares held by shareholders of the Fund and Egypt
Fund, which was obtained on March 2, 2010, and the Fund’s Plan of Dissolution
became effective.  On March 2, 2010, the funds that own Ridgewood
Egypt received gross proceeds, prior to expenses, of $13 million; the gross
proceeds allocated to the Fund totaled $8.9 million. A summary of the terms and
conditions of the transaction is provided in a Current Report on Form 8-K filed
with the SEC on December 21, 2009.





The
Managing Shareholder cannot predict when liquidation of the Fund will be
concluded primarily due to on-going litigation discussed in Item 3. “Legal
Proceedings”.





Critical
Accounting Policies and Estimates





The
following 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 the United States of America (“GAAP”). In preparing these financial
statements, the Fund is required to make certain estimates and assumptions that
affect the reported amounts of the Fund’s assets, liabilities, revenues and
expenses, including the disclosure of contingent assets and
liabilities.  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 consolidated financial
statements. The Fund believes the following critical accounting policies affect
the more significant estimates and assumptions used in the preparation of the
Fund’s consolidated financial statements.




7
 Table of Contents




As a
result of the sale of REFI on March 2, 2010, the Fund anticipates it will
prospectively adopt the liquidation basis of accounting. This basis of
accounting is considered appropriate when, among other things, liquidation of a
fund is probable. Under this basis of accounting, assets are valued at their net
realizable values and liabilities are valued at their estimated settlement
amounts. The conversion from going concern to liquidation basis of accounting
requires management to make significant estimates and assumptions. As a result
of this change in accounting basis, the comparability of financials from period
to period will be significantly impacted.





Revenue
Recognition





Power
generation revenue is 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.
Billings to 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 receivables will not be recovered.




Property,
Plant and Equipment





Property,
plant and equipment, consisting principally of land and water desalinization
facilities, 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 10 years for water desalinization facilities and 50 years
for buildings.





Impairment
of Long-Lived Assets





The Fund
evaluates 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.





Income
Taxes





The
Fund’s Egyptian subsidiary has a ten year income tax holiday which commenced on
January 1, 2001 and began to expire on December 31, 2008. 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.





Foreign
Currency Translation





The
Egyptian pound is the functional currency of the Fund’s Egyptian subsidiary. The
consolidated financial statements of the Fund’s foreign subsidiary are
translated into US dollars. 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 loss.




8
 Table of Contents




Results
of Operations





Results
of operations discussed below exclude the results of US Hydro, which are
presented as discontinued operations in the consolidated statements of
operations for all periods presented.




The Fund
recorded revenues of $13.2 million for the year ended December 31, 2009, which
was comparable to the 2008 period.





Cost of
revenues increased $0.2 million, or 2.6%, from $8.2 million in 2008 to $8.4
million in 2009. This increase was primarily due to an increase in consumables
resulting from higher fuel costs and increased depreciation expense as a result
of capital expansion at NEH.





Gross
profit decreased $0.2 million, or 4.6%, to $4.8 million in 2009 from $5 million
in 2008. This decrease was due to an increase in cost of revenues.





General
and administrative expenses decreased approximately $0.7 million from $4 million
in 2008 to $3.3 million in 2009. The decrease was primarily attributable to a
decrease in professional fees.





The
management fee due to the Managing Shareholder was $1.6 million for both 2009
and 2008.  The management fee to the Managing Shareholder is for
certain management, administrative and advisory services and office space and
other facilities provided to the Fund.





In 2009,
the Fund recorded an impairment of $11.4 million of property, plant and
equipment. This was primarily due to an impairment test performed by NEH and
noted that the carrying amount of property, plant and equipment will likely not
be recoverable. The triggering event for the impairment analyses was the
expectation at the balance sheet date that REFI will be sold. NEH recorded an
impairment charge of $11.1 million since the carrying amount of REFI assets
exceeded the estimated proceeds from the sale of REFI.





Interest
expense increased approximately $0.2 million, from $0.3 million in 2008 to $0.5
million in 2009. The increase in interest expense was primarily attributable to
2009 unpaid management fees which were subsequently paid in the March 2010. 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.





Income
tax expense decreased $0.3 million, from $0.5 million in 2008 to $0.2 million in
2009. This decrease was primarily attributable to the recognition of timing
differences between book and tax basis resulting from acquisition of assets and
depreciation and amortization expense relating to Egypt operations.





In
November 2009, subsidiaries of US Hydro completed the sale and sold for cash,
all of its interest in US Hydro projects to KEI USA.  The operating
results of US Hydro have been classified as discontinued operations for all
periods presented. In 2009, income from discontinued operations of approximately
$0.2 million includes loss from operations of US Hydro of $0.7 million and gain
on disposal of $0.9 million. See Item 1. “Business – US Hydro” for further
discussion of the sale.





The Fund
recorded a noncontrolling interest share in the loss of subsidiary of $3.1
million in 2009 compared to noncontrolling interest in the earnings of
subsidiary of $0.5 million in 2008. This was due to an increase in the loss of
NEH in the 2009 period.





Liquidity
and Capital Resources





At
December 31, 2009, the Fund had cash and cash equivalents of $2.1 million, a
decrease of $1 million from December 31, 2008. The cash flows for 2009 were $1.8
million provided by operating activities, $2 million provided by investing
activities, $2.8 million used in financing activities and a $35,000 negative
effect of foreign exchange on cash and cash equivalents.




In 2009,
the Fund’s operating activities generated cash of $1.8 million compared to $3.5
million in 2008, a decrease of $1.7 million. This decrease was primarily due to
an increase in NEH loss.





In 2009,
investing activities provided cash of approximately $2 million compared to cash
used of $6.8 million in 2008. This increase in cash flow provided by investing
activities of approximately $8.8 million in 2009 is due to net proceeds of
$3.5 million received from sale of US Hydro, $0.3 million collected on
notes receivable and
a decrease in capital expenditures of approximately $5 million in
2009.




9
 Table of Contents




In 2009,
the Fund’s financing activities used cash of $2.8 million, which represents $1.8
million used for loan repayments, $0.2 million used for cash distributions to
noncontrolling interest holders and $0.8 million used for cash distributions to
shareholders. In 2008, the Fund’s financing activities provided cash of $0.2
million, which represents $2 million of loan proceeds received by REFI,
partially offset by $0.7 million used for loan repayments, $0.4 million used for
cash distributions to noncontrolling interest holders and $0.7 million used for
cash distributions to shareholders.





Future
Liquidity and Capital Resource Requirements




The Fund
believes that it has sufficient cash and cash equivalents to provide working
capital for the next 12 months. The Fund intends to distribute excess cash to
its shareholders after liquidating its remaining assets and satisfying its
liabilities.





Off-Balance
Sheet Arrangements





None.




Contractual
Obligations and Commitments





The
following table provides a summary of the Fund’s share of contractual
obligations at December 31, 2009 (in thousands):




Payments
      due by period at December 31, 2009Less
      than
            
            
            1-3
            
            
            3-5
            
            
            More
      thanTotal
            
            
            1
      Year
            
            
            Years
            
            
            Years
            
            
            5
      YearsLong-term
      debt – Sinai 1
            $
            970
            
            
            $
            653
            
            
            $
            317
            
            
            $
            -
            
            
            $
            -Long-term
      debt – REFI 2
            
            360
            
            
            
            360
            
            
            
            -
            
            
            
            -
            
            
            
            -Consulting
      agreement settlement 3
            
            1,029
            
            
            
            112
            
            
            
            259
            
            
            
            172
            
            
            
            486Total
            $
            2,359
            
            
            $
            1,125
            
            
            $
            576
            
            
            $
            172
            
            
            $
            486




1 The
Sinai loan, which is secured by a part of its assets, bears interest at 11.5%
per annum and is denominated in Egyptian pounds. The provision of the loan
restricts Sinai from paying dividends to its shareholders or obtaining credit
from other banks. At December 31, 2009, Sinai was in compliance with the terms
of its loan. Effective with the sale of REFI, neither the Fund nor any of its
affiliates have any obligation for this debt.





2 The
REFI loan has an interest rate of 10% per annum on an unsecured basis. The loan
is to be repaid in US dollars and is payable on a monthly basis over the
successive 17 months. Effective with the sale of REFI, neither the Fund nor any
of its affiliates have any obligation for this debt.





3 In
April 2005, NEH agreed to a settlement with a consultant, whereby NEH was
required to make quarterly payments of $30 for as long as the Egypt projects
remained operational. In the event that the Egypt projects were sold, an amount
equal to the present value of the subsequent ten years of payments would be made
in settlement of the remaining obligation, net of certain adjustments. In
addition, in November 2003, NEH agreed to a settlement with a consultant,
whereby NEH made a single payment of $281 and is required to make monthly
installment payments of $8 until June 2013.





Recent
Accounting Pronouncements





For
information related to recent accounting pronouncements, see Note 2. “Summary of
Significant Accounting Policies”, of the Notes to Consolidated Financial
Statements, beginning on page F-1 of this Form 10-K.





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 of the Fund’s Independent Registered Public Accounting Firm thereon,
are presented beginning on page F-1 of this Form 10-K.





10
 Table of Contents




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




In
accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Fund’s management, with the participation of
the Fund’s Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of the Fund’s disclosure controls and procedures, as defined
in Exchange Act Rule 13a-15(e). Based on this evaluation, the Fund’s Chief
Executive Officer and Chief Financial Officer concluded that the Fund’s
disclosure controls and procedures were effective as of the end of the period
covered by this report to ensure that information required to be disclosed by
the Fund in reports filed pursuant to Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and
forms and that information required to be disclosed by the Fund is accumulated
and communicated to senior management so as to allow timely decisions regarding
required disclosure.




Management’s
Annual Report on Internal Control over Financial Reporting





The
Fund’s management is responsible for establishing and maintaining adequate
internal control over financial reporting for the Fund. 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 GAAP.





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 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, 2009.  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 over Financial
Reporting — Guidance for Smaller Public Companies. Based on this
evaluation, the Fund’s management concluded that as of December 31, 2009, the
Fund’s internal controls over financial reporting were effective.





This
Annual Report on Form 10-K does not include an attestation report of the Fund’s
independent registered public accounting firm regarding internal control over
financial reporting.  Management’s report was not subject to
attestation by the Fund’s independent 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





The
Fund’s Chief Executive Officer and Chief Financial Officer have concluded that
there was no change in the Fund's internal control over financial reporting that
occurred during the fiscal quarter ended December 31, 2009 that has materially
affected, or is reasonably likely to materially affect, the Fund’s internal
control over financial reporting.





ITEM
9B.  OTHER INFORMATION





None.








11
 Table of Contents




PART
III




ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




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




Each of
the executive officers of the Fund also serves as an executive officer of the
Managing Shareholder. The executive officers of the Fund are as
follows:





Name, Age and Position with
      Registrant
            Officer SinceRandall
      D. Holmes,  62President
      and Chief Executive Officer
            2004Robert
      E. Swanson, 63Chairman
            1997Jeffrey
      H. Strasberg, 52Executive
      Vice President and Chief Financial Officer
            2007Daniel
      V. Gulino, 49Senior
      Vice President, General Counsel and Secretary
            2000


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




Randall D. Holmes has served
as President and Chief Executive Officer of the Fund, the Managing Shareholder
and other trusts and limited liability companies since January 2006 and served
as Chief Operating Officer of the Fund, the Managing Shareholder and affiliated
Ridgewood Power trusts and limited liability companies from 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 the Fund, the Managing Shareholder and its affiliates. Mr.
Holmes is a graduate of Texas Tech University and the University of Michigan Law
School. He is a member of the New York State Bar.




Robert E. Swanson has served
as Chairman of the Fund, the Managing Shareholder and affiliated trusts and
limited liability companies 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 the Fund. 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 Chief Executive Officer of
Ridgewood Energy since its inception in 1982. Mr. Swanson is a member of the New
York State and New Jersey State Bars, the Association of the Bar of the City of
New York and the New York State Bar Association. He is a graduate of Amherst
College and Fordham University Law School.





Jeffrey H. Strasberg has
served as Executive Vice President and Chief Financial Officer of the Fund, the
Managing Shareholder and affiliated trusts and limited liability companies since
May 2007. Mr. Strasberg also serves as Senior Vice President and Chief Financial
Officer of Ridgewood Capital and affiliated limited liability companies 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 Capital trusts had interests. Mr. Strasberg is a Certified Public
Accountant and a graduate of the University of Florida.




Daniel V. Gulino has served as
Senior Vice President and General Counsel of the Fund, the Managing Shareholder
and affiliated trusts and limited liability companies 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 affiliated trusts and limited liability companies and has done so
since 2000. Mr. Gulino is a member of the New Jersey State and Pennsylvania
State Bars. He is a graduate of Fairleigh Dickinson University and 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.




12
 Table of Contents





Managing
Shareholder




The
Fund’s Management Agreement with the Managing Shareholder 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 also has been 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 Director Independence”.




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 the Fund’s executive officers and directors,
and persons who own more than 10% of a registered class of the Fund’s equity
securities, to file reports of ownership and changes in ownership with the SEC.
During the past fiscal year, the Managing Shareholder believes that all filings
required to be made by the Fund’s executive officers pursuant to Section 16(a)
of the Exchange Act have been timely filed with the SEC. The Fund has no
directors or 10% shareholders.





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





During
2009 and 2008, the executive officers of the Fund did not receive compensation
directly from the Fund or any of its subsidiaries. They provide managerial
services to the Fund in accordance with the terms of the Fund’s Declaration of
Trust and the Operating Agreement. The Managing Shareholder or affiliated
management companies, determines and pays the compensation of these officers.
Each of the executive officers of the Fund also serves as an executive officer
of the Managing Shareholder and other funds managed by the Managing Shareholder
and its affiliates.




The Fund
does, 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 the Fund. See Item 13. “Certain
Relationships and Related Transactions, and Director Independence” for more
information regarding Managing Shareholder compensation and payments to
affiliated entities.




13
 Table of Contents




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 the Fund’s Investor Shares as of February 28, 2010 (no person owns more than
5%) by:





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


·
            all
      of the executive officers of the Fund as 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 on 658.2067 Investor Shares outstanding at February 28, 2010.
Other than as set forth below, no officer of the Fund owns any shares of the
Fund.





Name of beneficial owner
            Number
              of
      shares(1)
            PercentRidgewood
      Renewable Power LLC (Managing Shareholder)
              Robert
      E. Swanson,  controlling member
            2.25
            *Executive
      officers as a group
            2.25
            *


*           Represents
less than one percent.





(1)
            Does
      not include a management share in the Fund representing 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 the Fund. The management rights of the Managing Shareholder are
      described in further detail in Item 1. “Business – Managing Shareholder”.
      The Managing Shareholder’s beneficial interest in cash distributions of
      the Fund and its allocable share of the Fund’s net profits and net losses
      and other items attributable to the management share are described in
      further detail below in Item 13. “Certain Relationships and Related
      Transactions, and Director
Independence”.





ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE





Under the
terms of the Fund’s Management Agreement, the Fund paid the Managing Shareholder
an annual management fee of $1.6 million for each of the years ended December
31, 2009 and 2008, as compensation for the services the Managing
Shareholder provides to the Fund, which was equal to 2.5% of the total
contributed capital of the Fund. 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.





Under the
Operating Agreement with the Fund, 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, 2009 and 2008, RPM
charged the projects $0.4 million and $0.5 million, respectively, for overhead
items allocated in proportion to the amount invested in projects managed. In
addition, for the years ended December 31, 2009 and 2008, RPM charged the
projects $2.5 million and $2.1 million, respectively, for direct expenses
allocated in proportion to the amount invested in projects managed. These
charges may not be indicative of costs incurred if the projects 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% per
annum 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 the Fund. The Managing Shareholder did not
receive any distributions during 2009 and 2008. The Fund has not yet reached
Payout and is not expected to do so.




14
 Table of Contents




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.





In
accordance with the  Declaration of Trust, upon or prior to the first
distribution by the Fund in liquidation, the Managing Shareholder is required to
contribute to the capital of the Fund an amount equal to any deficit in the tax
basis capital account of the Managing Shareholder calculated just prior to the
date of such distribution. As of December 31, 2008, the last date such
calculation was made, the Managing Shareholder would not have been required to
make any contributions to the Fund.





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND
SERVICES




The
following table presents fees and services rendered by Grant Thornton LLP, the
Fund’s principal independent registered public accounting firm, for the years
ended December 31, 2009 and 2008 (in thousands).




2009
            
            
            2008Audit
      fees
            
            $
            332
            
            
            $
            467Tax
      fees1
            
            
            84
            
            
            
            106Total
            
            $
            416
            
            
            $
            573





1 Tax
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. All of the services
listed in the table above were pre-approved by the Managing
Shareholder.






15
 Table of Contents




PART
IV




ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES




(a)(1)          
Consolidated Financial
Statements




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





(a)(2)          
Consolidated Financial
Statement Schedules





Not applicable.





(a)(3)          
Exhibits





Exhibits
required by Section 601 of Regulation S-K:




Exhibit No.
            Description2.1
            
            Purchase
      and Sale Agreement, dated November 20, 2009, by and between Ridgewood
      Maine Hydro Partners, L.P., subsidiaries of Ridgewood US Hydro Corporation
      and KEI(USA) Power Management Inc. and certain of its subsidiaries
      (incorporated by reference to Exhibit 2.1 to the Current Report on Form
      8-K filed by the Registrant with the SEC on November 23,
    2009)2.2
            
            Agreement
      Regarding Representations and Warranties dated November 20, 2009, by and
      between Ridgewood Renewable Power, LLC, Ridgewood Maine Hydro Partners,
      L.P., subsidiaries of Ridgewood US Hydro Corporation and KEI(USA) Power
      Management Inc. and certain of its subsidiaries (incorporated by reference
      to Exhibit 2.2 to the Current Report on Form 8-K filed by the Registrant
      with the SEC on November 23, 2009)2.3
            
            Sale
      and Purchase Agreement, dated December 10, 2009, by and between Ridgewood
      Near East Holdings LLC, RW Egyptian Holdings LLC, Ridgewood Egypt for
      Infrastructure LLC, Mr. Zaki Girges, El Orouba for Water Desalination
      S.A.E., Water Desal, LLC and EFG-Hermes Private Equity (incorporated by
      reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the
      Registrant with the SEC on December 21, 2009)2.4
            
            Loan
      Agreement, dated December 10, 2009, by and between Ridgewood Egypt for
      Infrastructure LLC, Water Desal, LLC and Mr. Zaki Girges (incorporated by
      reference to Exhibit 2.2 to the Current Report on Form 8-K filed by the
      Registrant with the SEC on December 21, 2009)2.5
            
            Escrow
      Agreement, dated December 10, 2009, by and between Ridgewood Near East
      Holdings LLC, RW Egyptian Holdings LLC, Ridgewood Egypt for Infrastructure
      LLC, Mr. Zaki Girges, El Orouba for Water Desalination S.A.E., Water
      Desal, LLC and HSBC Bank Egypt SAE (incorporated by reference to Exhibit
      2.3 to the Current Report on Form 8-K filed by the Registrant with the SEC
      on December 21, 2009)2.6
            
            Plan
      of Liquidation and Dissolution of The Ridgewood Power Growth Fund
      (incorporated by reference to Annex D to the Registrant’s Definitive Proxy
      Statement filed with the SEC on February 8, 2010, SEC File No.
      000-25935)3   (i)(A)
            
            Certificate
      of Fund of the Registrant (incorporated by reference to Exhibit 3.A 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 Exhibit 3.B 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 filed with
      Delaware Secretary of State dated December 18, 2003 (incorporated by
      reference to Exhibit 3.(i)C to the Registrant’s Annual Report on Form 10-K
      filed with the SEC on August 17, 2007)  16
 Table of Contents
  Exhibit No.
            
            Description3   (ii)(A)
            
            Declaration
      of Trust of the Registrant (incorporated by reference to Exhibit 3.C to
      the Registrant’s Registration Statement on Form 10 filed with the SEC on
      April 30, 1999)3   (ii)(B)
            
            First
      Amendment to the Declaration of Trust (incorporated by reference to
      Exhibit A to the Registrant’s Definitive Schedule 14A 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 Exhibit 3(i)(F) 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 Exhibit 10.F to the Registrant’s
      Registration Statement on Form 10 filed with the SEC on April 30,
      1999)10.2
            #
            The
      CLPE Holdings Management Incentive Plan dated August 6, 2003 (incorporated
      by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form
      10-K filed with the SEC on August 17, 2007)10.3
            #
            Service
      Agreement dated October 1, 2004 between Douglas R. Wilson and CLPE
      Holdings Limited (incorporated by reference to Exhibit 10.13 to the
      Registrant’s Annual Report on Form 10-K filed with the SEC on August 17,
      2007)10.4
            #
            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 Exhibit 10.15 to
      the Registrant’s Annual Report on Form 10-K filed with the SEC on August
      17, 2007)10.5
            #
            Compromise
      Agreement dated February 22, 2007 between Douglas R. Wilson and CLPE
      Holdings Limited (incorporated by reference to Exhibit 10.16 to the
      Registrant’s Annual Report on Form 10-K filed with the SEC on August 17,
      2007)10.6
            #
            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 Exhibit 10.14 to
      the Registrant’s Annual Report 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 Exhibit
      14 to the Registrant’s Annual Report on Form 10-K filed with the SEC on
      March 1, 2006)21
            *
            Subsidiary
      of the Registrant31.1
            *
            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.




17
 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.





THE
      RIDGEWOOD POWER GROWTH FUNDDate:  March
      31, 2010
            By:
            /s/  Randall
      D. HolmesRandall
      D. HolmesPresident
      and Chief 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
            
            President
      and Chief Executive Officer
            
            March
      31, 2010Randall
      D. Holmes
            
            (Principal
      Executive Officer)/s/
      Jeffrey H. Strasberg
            
            Executive
      Vice President and Chief Financial Officer
            
            March
      31, 2010Jeffrey
      H. Strasberg
            
            (Principal
      Financial and Accounting Officer)RIDGEWOOD RENEWABLE POWER
      LLC(Managing
      Shareholder)By:
      /s/ Randall D. Holmes
            
            President
      and Chief Executive Officer of Managing Shareholder
            
            March
      31, 2010Randall
      D. Holmes







18
 Table of Contents




THE
RIDGEWOOD POWER GROWTH FUND





INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS








PageReport of Independent Registered Public Accounting Firm
            F-2Consolidated Balance Sheets at December 31, 2009 and 2008
            F-3Consolidated Statements of Operations and Comprehensive
      Loss for the years ended December 31, 2009 and
    2008
            F-4Consolidated Statements of Changes in Equity (Deficit) for the
      years ended December 31, 2009 and 2008
            F-5Consolidated Statements of Cash Flows for the years ended
      December 31, 2009 and 2008
            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
 The
Ridgewood Power Growth Fund
 
 
 We have
audited the accompanying consolidated balance sheets of The Ridgewood Power
Growth Fund (a Delaware trust) and subsidiaries as of December 31, 2009 and
2008, and the related consolidated statements of operations and comprehensive
loss, changes in shareholders’ equity (deficit), and cash flows for the years
then ended. These consolidated financial statements are the responsibility of
the Fund'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. The Fund is
not required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audits 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 the Fund’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 financial statements referred to above present fairly, in all
material respects, the financial position of The Ridgewood Power Growth Fund and
subsidiaries as of December 31, 2009 and 2008, and the results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 
 /s/ GRANT
THORNTON LLP
 Edison,
New Jersey
 March 31,
2010




F-2
 Table of Contents




THE
      RIDGEWOOD POWER GROWTH FUNDCONSOLIDATED
      BALANCE SHEETS(in
      thousands, except share data)December
      31,2009
              
              
              2008ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              2,126
              
              
              $
              1,120Accounts
      receivable, net of allowance
              
              
              1,802
              
              
              
              1,425Due
      from affiliates
              
              
              295
              
              
              
              15Inventory
              
              
              1,237
              
              
              
              1,242Note
      receivable
              
              
              725
              
              
              
              1,161Assets
      related to discontinued operations
              
              
              -
              
              
              
              5,230Prepaid
      expenses and other current assets
              
              
              980
              
              
              
              502Total
      current assets
              
              
              7,165
              
              
              
              10,695Property,
      plant and equipment, net
              
              
              9,931
              
              
              
              21,976Other
      assets
              
              
              -
              
              
              
              133Total
      assets
              
              $
              17,096
              
              
              $
              32,804LIABILITIES
      AND EQUITY (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
              
              $
              834
              
              
              $
              1,037Liabilities
      related to discontinued operations
              
              
              -
              
              
              
              1,174Long-term
      debt - current portion
              
              
              1,013
              
              
              
              1,803Due
      to affiliates
              
              
              1,644
              
              
              
              1,748Total
      current liabilities
              
              
              3,491
              
              
              
              5,762Long-term
      debt - noncurrent portion
              
              
              317
              
              
              
              1,284Other
      liabilities
              
              
              1,134
              
              
              
              1,264Deferred
      tax liability
              
              
              1,023
              
              
              
              858Total
      liabilities
              
              
              5,965
              
              
              
              9,168Commitments
      and contingenciesEquity:Investor
      Shareholders’ equity (658.2067 Investor Shares issuedand
      outstanding)
              
              
              7,843
              
              
              
              17,078Managing
      Shareholder's accumulated deficit(1
      management share issued and outstanding)
              
              
              (491
              )
              
              
              (396
              )Total
      Growth Fund shareholders’ equity
              
              
              7,352
              
              
              
              16,682Noncontrolling
      interest in subsidiary
              
              
              3,779
              
              
              
              6,954Total
      equity
              
              
              11,131
              
              
              
              23,636Total
      liabilities and equity
              
              $
              17,096
              
              
              $
              32,804


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




F-3
 Table of Contents
  THE
      RIDGEWOOD POWER GROWTH FUNDCONSOLIDATED
      STATEMENTS OFOPERATIONS AND COMPREHENSIVE
      LOSS(in
      thousands, except per share data)Years
      Ended December 31,2009
                
                
                2008Revenues
                
                $
                13,178
                
                
                $
                13,200Cost
      of revenues
                
                
                8,416
                
                
                
                8,206Gross
      profit
                
                
                4,762
                
                
                
                4,994Operating
      expenses:General
      and administrative expenses
                
                
                3,269
                
                
                
                4,032Management
      fee to Managing Shareholder
                
                
                1,645
                
                
                
                1,645Impairment
      of property, plant and equipment
                
                
                11,366
                
                
                
                -Total
      operating expenses
                
                
                16,280
                
                
                
                5,677Loss
      from operations
                
                
                (11,518
                )
                
                
                (683
                )Other
      income (expense):Interest
      income
                
                
                70
                
                
                
                29Interest
      expense
                
                
                (468
                )
                
                
                (325
                )Other
      expense, net
                
                
                (29
                )
                
                
                (160
                )Total
      other expense, net
                
                
                (427
                )
                
                
                (456
                )Loss
      from continuing operations before income tax
                
                
                (11,945
                )
                
                
                (1,139
                )Income
      tax expense
                
                
                (150
                )
                
                
                (469
                )Loss
      from continuing operations
                
                
                (12,095
                )
                
                
                (1,608
                )Income
      (loss) from discontinued operations including related gain on
      disposal
                  (see
      Note 3), net of income tax
                
                
                264
                
                
                
                (37
                )Net
      loss
                
                
                (11,831
                )
                
                
                (1,645
                )Net
      loss (earnings) attributable to noncontrolling interest
                
                
                3,099
                
                
                
                (515
                )Net
      loss attributable to Growth Fund
                
                
                (8,732
                )
                
                
                (2,160
                )Foreign
      currency translation adjustment
                
                
                225
                
                
                
                (128
                )Comprehensive
      loss
                
                $
                (8,507
                )
                
                $
                (2,288
                )Amount
      attributable to Growth Fund shareholders - Net loss:Continuing
      operations
                
                $
                (9,195
                )
                
                $
                (2,133
                )Discontinued
      operations
                
                
                463
                
                
                
                (27
                )$
                (8,732
                )
                
                $
                (2,160
                )Managing
      Shareholder - Net loss:Continuing
      operations
                
                $
                (92
                )
                
                $
                (21
                )Discontinued
      operations
                
                
                (5
                )
                
                
                -Investor
      Shareholders - Net (loss) income:Continuing
      operations
                
                
                (9,103
                )
                
                
                (2,112
                )Discontinued
      operations
                
                
                468
                
                
                
                (27
                )Net
      (loss) income per Investor Share:Continuing
      operations
                
                
                (13,830
                )
                
                
                (3,208
                )Discontinued
      operations
                
                
                711
                
                
                
                (41
                )





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




F-4
 Table of Contents





THE
      RIDGEWOOD POWER GROWTH FUNDCONSOLIDATED
      STATEMENTS OF CHANGESIN EQUITY (DEFICIT)YEARS
      ENDED DECEMBER 31, 2009 AND 2008(in
      thousands)Growth
      Fund Shareholders' Equity (Deficit)Investor
              
              
              Managing
              
              
              Noncontrolling
              
              
              TotalShareholders'
      Equity
              
              
              Shareholder
      Deficit
              
              
              Interest
              
              
              EquityBalance
      at December 31, 2007
              
              $
              20,002
              
              
              $
              (374
              )
              
              $
              6,902
              
              
              $
              26,530Net
      (loss) income
              
              
              (2,139
              )
              
              
              (21
              )
              
              
              515
              
              
              
              (1,645
              )Foreign
      currency translation adjustment
              
              
              (127
              )
              
              
              (1
              )
              
              
              (74
              )
              
              
              (202
              )Cash
      distributions
              
              
              (658
              )
              
              
              -
              
              
              
              (389
              )
              
              
              (1,047
              )Balance
      at December 31, 2008
              
              
              17,078
              
              
              
              (396
              )
              
              
              6,954
              
              
              
              23,636Net
      loss
              
              
              (8,635
              )
              
              
              (97
              )
              
              
              (3,099
              )
              
              
              (11,831
              )Foreign
      currency translation adjustment
              
              
              223
              
              
              
              2
              
              
              
              105
              
              
              
              330Disposal
      of noncontrolling interest
              
              
              -
              
              
              
              -
              
              
              
              (1,130
              )
              
              
              (1,130
              )Capital
      contribution
              
              
              -
              
              
              
              -
              
              
              
              1,152
              
              
              
              1,152Cash
      distributions
              
              
              (823
              )
              
              
              -
              
              
              
              (203
              )
              
              
              (1,026
              )Balance
      at December 31, 2009
              
              $
              7,843
              
              
              $
              (491
              )
              
              $
              3,779
              
              
              $
              11,131







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 31,2009
                
                
                2008Cash
      flows from operating activities:Net
      loss
                
                $
                (8,732
                )
                
                $
                (2,160
                )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Depreciation
      and amortization
                
                
                2,849
                
                
                
                2,769Provision
      for bad debts
                
                
                217
                
                
                
                94Impairment
      of property, plant and equipment
                
                
                11,366
                
                
                
                -Deferred
      income taxes, net
                
                
                150
                
                
                
                (328
                )Noncontrolling
      interest in the (loss) earnings of subsidiary
                
                
                (3,099
                )
                
                
                515Gain
      on disposal of discountinued operations
                
                
                (944
                )
                
                
                -Loss
      from discontinued operations, net of income tax
                
                
                680
                
                
                
                -Changes
      in operating assets and liabilities:Account
      receivable
                
                
                (569
                )
                
                
                (429
                )Inventory
                
                
                23
                
                
                
                (287
                )Assets
      related to discontinued operations
                
                
                -
                
                
                
                1,536Prepaid
      expenses and other current assets
                
                
                (468
                )
                
                
                8Other
      assets
                
                
                133
                
                
                
                (151
                )Accounts
      payable and accrued expenses
                
                
                (212
                )
                
                
                212Liabilities
      related to discontinued operations
                
                
                -
                
                
                
                519Due
      to/from affiliates, net
                
                
                554
                
                
                
                1,269Other
      liabilities
                
                
                (131
                )
                
                
                (109
                )Total
      adjustments
                
                
                10,549
                
                
                
                5,618Net
      cash provided by operating activities
                
                
                1,817
                
                
                
                3,458Cash
      flows from investing activities:Capital
      expenditures
                
                
                (1,886
                )
                
                
                (6,833
                )Collections
      from notes receivable
                
                
                436
                
                
                
                130Net
      proceeds from disposal of discontinued operations
                
                
                3,476
                
                
                
                -Investment
      in subsidiary
                
                
                -
                
                
                
                (137
                )Net
      cash provided by (used in) investing activities
                
                
                2,026
                
                
                
                (6,840
                )Cash
      flows from financing activities:Proceeds
      from loan
                
                
                -
                
                
                
                2,000Repayments
      under loan
                
                
                (1,776
                )
                
                
                (708
                )Cash
      distributions to noncontrolling interest
                
                
                (203
                )
                
                
                (389
                )Cash
      distributions to shareholders
                
                
                (823
                )
                
                
                (658
                )Net
      cash (used in) provided by financing activities
                
                
                (2,802
                )
                
                
                245Effect
      of exchange rate on cash and cash equivalents
                
                
                (35
                )
                
                
                103Net
      increase (decrease) in cash and cash equivalents
                
                
                1,006
                
                
                
                (3,034
                )Cash
      and cash equivalents, beginning of period
                
                
                1,120
                
                
                
                4,154Cash
      and cash equivalents, end of period
                
                $
                2,126
                
                
                $
                1,120Supplemental
      disclosure of cash flow information:Interest
      paid
                
                $
                17
                
                
                $
                208Income
      tax paid
                
                
                -
                
                
                
                49


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





F-6
 Table of Contents




THE
RIDGEWOODPOWER 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 a Delaware trust formed on February
18, 1997. The Fund began offering shares in February 1998 and concluded its
offering in April 2000. The objective of the Fund is to provide benefits to its
shareholders through a combination of distributions of operating cash flow and
capital appreciation. The Managing Shareholder of the Fund is Ridgewood
Renewable Power LLC, a New Jersey limited liability company (the “Managing
Shareholder” or “RRP”).  Historically, the Fund focused primarily on
independent power generation facilities, water desalinization plants and other
infrastructure projects both in the US and abroad.





The
Fund’s accompanying consolidated financial statements include the accounts of
the Fund and its majority-owned subsidiaries, Ridgewood US Hydro Corporation
(“US Hydro”) and Ridgewood Near East Holdings LLC (“NEH”). The Fund previously
owned a 70.8% interest in US Hydro, which was sold in November 2009. The Fund
owns a 68.1% interest in NEH and the remaining noncontrolling interests are
owned by Ridgewood Electric Power Trust V (“Trust V”) (14.1%) and
Ridgewood/Egypt Fund (“Egypt Fund”) (17.8%).





At
December 31, 2009 and 2008, NEH’s wholly-owned subsidiary, Ridgewood Egypt for
Infrastructure LLC (Egypt) (“REFI”), owned 75.9%, through a combination of
direct and indirect ownership, of Sinai For Environmental Services S.A.E.
(“Sinai”).





The
interests of Trust V and Egypt Fund, and the interests of the other owners of
Sinai, are presented as noncontrolling interests in the consolidated financial
statements.





On
November 20, 2009, subsidiaries of US Hydro entered into a purchase and sale
agreement and sold for cash, all of its equity interests in US Hydro projects to
KEI (USA) Power Management Inc. and certain of its subsidiaries (“KEI USA”),
which are affiliated with Kruger Energy, Inc., a Canada-based international
company. The total gross purchase price of the sale, including a post-closing
adjustment made in 2010 for estimated working capital at the time of the sale,
totaled $5,409, of which $3,830 was allocated to the Fund. The Fund has
reflected the results of US Hydro operations as discontinued operations in the
accompanying consolidated statements of operations for all periods presented.
The assets and liabilities related to US Hydro were reflected as assets and
liabilities of discontinued operations on the consolidated balance sheet at
December 31, 2008 (see Note 3).





On
December 10, 2009, NEH entered into a sale and purchase agreement whereby, NEH
would receive a return of a portion of its investments and simultaneously
dispose of all of its interest in REFI for cash to Mr. Zaki Girges, the general
manager of REFI and El Orouba for Water Desalination S.A.E., an Egyptian joint
stock company owned by Mr. Girges and his family. The total gross proceeds of
the transaction, prior to expenses, totaled $13,000, of which $8,853 was
allocated to the Fund. The transaction was subject to the approval by a majority
of the shares held by shareholders of the Fund and Egypt Fund, which was
obtained on March 2, 2010, as discussed in Note 13 and the proceeds were
received on March 2, 2010.





The
Managing Shareholder performed, or arranged for the performance of, the
operation and maintenance of the projects invested in by the Fund and continues
to perform the management and administrative services required for Fund
operations. Among other services, the Managing Shareholder administers the
accounts, including tax and other financial information, and handles relations
with the shareholders. The Managing Shareholder also provides the Fund with
office space, equipment and facilities and other services necessary for its
operation. Upon the closing of the sale of REFI, the Fund’s Plan of Liquidation
and Dissolution (the “Plan of Dissolution”) became effective. Under the Plan of
Dissolution, the Managing Shareholder has sole authority to dissolve, liquidate
and terminate the Fund.





The Fund
has evaluated subsequent events and transactions through the date of the
issuance of its financial statements, and has made disclosure of a material
subsequent event in Note 13.





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. Noncontrolling interests of majority-owned
subsidiaries are calculated based upon the respective noncontrolling interest
ownership percentages. All material intercompany transactions have been
eliminated in consolidation.





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


b)           Use
of Estimates





The
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) requires
the Fund to make estimates and assumptions that affect the reported amounts of
the Fund’s assets, liabilities, revenues and expenses including the disclosure
of contingent assets and liabilities. The Fund evaluates these estimates and
assumptions on an ongoing basis. The Fund evaluates its estimates of assets,
including accounts receivable, notes receivable, inventory,
other current assets, recoverable value of property, plant and equipment and
recordable liabilities for litigation and other contingencies. The Fund bases
its estimates and assumptions 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 circumstances or conditions.





c)           Revenue
Recognition





Power
generation revenue is 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.
Billings to customers for power generation generally occurs during the
month following delivery. Final billings did not vary significantly from
estimates.




d)           Cash
and Cash Equivalents





The Fund
considers all highly liquid investments with maturities, when purchased, of
three months or less to be cash and cash equivalents. At December 31, 2009 and
2008, the Fund had cash deposits held in foreign banks, which do not provide
insurance of $1,958 and $1,061, respectively. At December 31, 2009 and 2008, the
remaining cash balances were held in US banks and did not exceed federal insured
limits.





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 receivables 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 principally of land, building, and water
desalinization facilities 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:




Buildings
            50
      yearsWater
      desalinization facilities
            5-10
      yearsOffice
      equipment
            5
      years


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


h)           Impairment
of Long-Lived Assets





The Fund
evaluates 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 year ended December 31, 2009, the potential sale of REFI,
which was subject to shareholder approval was a triggering event. Based on the
impairment analyses performed at that time, NEH recorded an impairment charge of
$11,366. For the year ended December 31, 2008, though the classification of US
Hydro as assets held for sale was a triggering event, no impairment in the
recorded value of US Hydro was deemed necessary.





i)           Income
Taxes





The
Fund’s Egyptian subsidiary has a ten year income tax holiday which commenced on
January 1, 2001 and began to expire on December 31, 2008. 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.





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 foreign subsidiary are
translated into US dollars. 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 loss.





k)           Comprehensive
Loss





The
Fund’s comprehensive loss consists of net loss and foreign currency translation
adjustments.





l)           Fair
Value of Financial Instruments





At
December 31, 2009 and 2008, the carrying value of the Fund’s cash and cash
equivalents, accounts receivable, notes receivable, inventory, other assets, and
accounts payable and accrued expenses approximates their fair value due to their
short-term nature. 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.





m)         
Reclassifications





Certain
items in previously issued consolidated financial statements have been
reclassified for comparative purposes. This had no effect on net
loss.




n)         
Recent Accounting Pronouncements




Accounting
for Uncertainty in Income Taxes
 
 In June
2006, the Financial Accounting Standards Board (“FASB”) issued accounting
guidance for uncertainty in income taxes.This guidance clarifies the
accounting for uncertainty in income taxes recognized in an enterprise’s
financial statements 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. This guidance also
discusses derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. In December 2008, the FASB
deferred the effective date of accounting for uncertainty in income taxes for
certain nonpublic enterprises to fiscal years beginning after December 15,
2008. The Fund concluded that it was eligible for this deferral and therefore,
the Fund adopted the guidance effective January 1, 2009, with no material impact
on its consolidated financial statements. The Fund evaluates uncertain tax
positions, if any, using accounting for contingencies. If applicable, a
loss contingency is recognized when, in the opinion of management, it is
probable that a tax liability has been incurred as of the date of the
financial statements and the amount of the loss can be reasonably estimated.
The Fund's Federal and state tax returns from 2006 and subsequent
years are subject to examinations by the tax authorities.Based on the
Fund’s evaluation, there are no significant uncertain tax positions requiring
recognition in the Fund’s consolidated financial statements.
 
 Noncontrolling
Interests in Consolidated Financial Statements
 
 In
December 2007, the FASB issued guidance regarding noncontrolling
interests in consolidated financial statements, which requires that ownership
interests in subsidiaries held by parties other than the parent, and the amount
of consolidated net income attributable to noncontrolling interests, be clearly
identified, labeled, and presented in the consolidated financial
statements within equity, but separate from the parent’s equity. It also
requires that 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. This guidance became effective for the Fund beginning
January 1, 2009. Except for the presentation and disclosure requirements,
which are applied retrospectively for all periods presented subsequent to the
adoption, the adoption of this guidance had no material impact on its
consolidated financial statements.


F-9
 Table of Contents
  THE
RIDGEWOODPOWER GROWTH FUND
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (dollar amounts in thousands, except
per share data)
 Subsequent
Events
 
 In May
2009, the FASB issued guidance regarding subsequent events which establishes
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued. It requires the disclosure of the date through which an
entity has evaluated subsequent events and the basis for that date. The Fund
adopted this guidance effective June 30, 2009, with no material impact on its
consolidated financial statements. In February 2010, the FASB amended its
previous guidance regarding subsequent events by removing the requirement for a
registrant to disclose a date through which subsequent events have been
evaluated.
 FASB
Accounting Standards
Codification





In June 2009, the
FASB announced the FASB Accounting Standards Codification (the “Codification”)
as the single source of authoritative non-governmental GAAP superseding
existing codification from the FASB, American Institute of Certified Public
Accountants, Emerging Issues Task Force, and related accounting literature.
Effective September 30, 2009, the Codification superseded all existing non-SEC
accounting and reporting standards and all other non-grandfathered non-SEC
accounting literature not included in the Codification became
non-authoritative.  The Fund adopted the Codification with no
material impact on its consolidated financial statements.





3.           DISCONTINUED
OPERATIONS





On
November 20, 2009, subsidiaries of US Hydro entered into a purchase and sale
agreement and sold for cash, all of its equity interests in US Hydro projects to
KEI USA. Financial information relating to US Hydro, including the gain
recognized from the sale of US Hydro, is as follows:





December
      31,2009
              
              
              2008Revenues
      from operations of discontinued business
              
              $
              2,707
              
              
              $
              3,806Cost
      of revenues
              
              
              657
              
              
              
              2,677Other
      expenses, net
              
              
              1,670
              
              
              
              1,846Income
      tax expense (benefit)
              
              
              1,060
              
              
              
              (680
              )Total
      expenses, net
              
              
              3,387
              
              
              
              3,843Loss  from
      discontinued operations, net of income tax
              
              
              (680
              )
              
              
              (37
              )Gain
      on disposal
              
              
              944
              
              
              
              -264
              
              
              
              (37
              )Net
      loss attributable to noncontrolling interest
              
              
              199
              
              
              
              10Income
      (loss) from discontinued operations attributable to Growth
      Fund
              
              $
              463
              
              
              $
              (27
              )




The gain
on disposal represents proceeds, less transaction costs and the net asset value
of US Hydro. The Managing Shareholder waived its right to receive its 1% of the
distributions from this transaction. As a result, the gain from the sale and
related cash distributions are allocated solely to the holders of investor
shares of beneficial interest (“Investor Shares”).





On
December 22, 2008, US Hydro met the criteria of being classified as assets held
for sale. At December 31, 2008, the assets of US Hydro and the related
liabilities are reflected as discontinued operations on the consolidated balance
sheet. Major components of assets and liabilities of discontinued operations are
as follows:





December
      31,ASSETS
            
            2008Cash
            
            $
            122Accounts
      receivable
            
            
            262Prepaid
      and other current assets
            
            
            275Deferred
      tax asset
            
            
            858Property,
      plant and equipment, net
            
            
            1125Intangibles,
      net
            
            
            2,325Goodwill
            
            
            227Other
      assets
            
            
            36Total
      assets
            
            $
            5,230LIABILITIESAccounts
      payable and accrued expenses
            
            $
            374Due
      to affiliates
            
            
            152Deferred
      rent
            
            
            648Total
      liabilities
            
            $
            1,174


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


Other
than the purchase price adjustment relating to net working capital, and the
assumption by the sellers of liabilities that the Managing Shareholder considers
to be minor, there are no payment obligations on the part of the sellers or the
buyers after the closing. The
sellers gave a limited number of representations and warranties to the buyers in
connection with the sale that are considered typical of such transactions.
Should there be a breach of those representations and warranties, the buyers
must first make a claim against an insurance policy purchased by the sellers for
claims arising from any such breach. As of March 31, 2010, the Fund is not aware
of any such claims.





4.           ACCOUNTS
RECEIVABLE





Accounts
receivable at December 31, 2009 and 2008 is as follows:




2009
            
            
            2008Accounts
      receivable
            
            $
            2,115
            
            
            $
            1,706Less:
      allowance for doubtful accounts
            
            
            (313
            )
            
            
            (281
            )$
            1,802
            
            
            $
            1,425





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, 2009 and 2008:





2009
            
            
            
            2008Balance
      at beginning of year
            
            $
            281
            
            
            $
            219Additions
      charged to bad debt provision (1)
            
            
            217
            
            
            
            94Deductions,
      net of recoveries (2)
            
            
            (185
            )
            
            
            (32
            )Balance,
      end of year
            
            $
            313
            
            
            $
            281





(1)
            Bad
      debt provision relates to estimated losses due to collectability issues,
      which is included in general and administrative expenses in the
      consolidated statements of operations.(2)
            Deductions,
      net of recoveries, primarily relate to receivable write-offs, but also
      include recoveries of previously written off
  receivables.




5.           PROPERTY,
PLANT AND EQUIPMENT





At
December 31, 2009 and 2008, property, plant and equipment at cost and
accumulated depreciation are as follows:





2009
            
            
            2008Water
      desalinization facilities
            
            $
            28,700
            
            
            $
            37,810Office
      equipment
            
            
            585
            
            
            
            55629,285
            
            
            
            38,366Less:
      accumulated depreciation
            
            
            (19,354
            )
            
            
            (16,390
            )$
            9,931
            
            
            $
            21,976





For the
years ended December 31, 2009 and 2008, depreciation expense was $2,849 and
$2,769, respectively, which is included in cost of revenues in the consolidated
statements of operations.





6. IMPAIRMENT
OF LONG-LIVED ASSETS





The Fund
recorded an impairment charge of $11,366 for the year ended December 31, 2009,
which was primarily due to impairment test performed by NEH for property, plant
and equipment and noted that its carrying amount will likely not be recoverable.
The triggering event for the impairment analyses was the expectation at the
balance sheet date that it was more likely than not that REFI will be sold. NEH
recorded an impairment charge of $11,186 since the carrying amount of REFI
assets exceeded the estimated proceeds from the sale of REFI. REFI recorded an
additional impairment charge of approximately $180 in 2009 relating to certain
idle facilities.


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


7.           ACCUMULATED
OTHER COMPREHENSIVE LOSS





The
Fund’s other comprehensive loss, which is reported in the accompanying
consolidated statements of operations, consists of net loss and foreign currency
translation adjustments.





As of
December 31, 2009 and 2008, the cumulative foreign currency translation loss was
$7,664 and $7,889, respectively.





8.           LONG-TERM
DEBT





The
following is a summary of long-term debt at December 31, 2009 and
2008:





2009
            
            
            2008Total
      long-term debt
            
            $
            1,330
            
            
            $
            3,087-
      Sinai
            
            
            970
            
            
            
            1,436-
      REFI
            
            
            360
            
            
            
            1,651Current
      maturity
            
            $
            1,013
            
            
            $
            1,803-
      Sinai
            
            
            653
            
            
            
            480-
      REFI
            
            
            360
            
            
            
            1,323Long-term
      portion
            
            $
            317
            
            
            $
            1,284-
      Sinai
            
            
            317
            
            
            
            956-
      REFI
            
            
            -
            
            
            
            328





The Sinai
loan, which is secured by a part of its assets, bears interest at 11.5% per
annum and is denominated in Egyptian pounds. The provision of the loan restricts
Sinai from paying dividends to its shareholders or obtaining credit from other
banks. At December 31, 2009, Sinai was in compliance with the terms of its loan.
Effective with the sale of REFI, neither the Fund nor any of its affiliates have
any obligation for this debt.





The REFI
loan has an interest rate of 10% per annum on an unsecured basis. The loan is to
be repaid in US dollars and is payable on a monthly basis over the successive 17
months. Effective with the sale of REFI, neither the Fund nor any of its
affiliates have any obligation for this debt.





Scheduled
principal repayments of the Fund’s long-term debt at December 31, 2009 are as
follows:





2010
            
            $
            1,0132011
            
            
            317Total
            
            $
            1,330





9.           COMMITMENTS
AND CONTINGENCIES





In
accordance with Egyptian company law, the Egypt projects 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. These transfers to the legal reserve did not stop until
2007, when the legal reserve had reached 100% of the issued
capital.





On
December 30, 2005, an investor in the Fund and several affiliated entities, Paul
Bergeron, on behalf of himself and as Trustee for the Paul Bergeron Trust
(“Bergeron”), filed a Complaint in the Federal District Court in
Massachusetts. The action was brought against, among others, the Managing
Shareholder and persons who are or were officers of the Managing Shareholder
(the “Defendants”). In June 2009, this lawsuit was settled with the Managing
Shareholder making a payment to Bergeron and purchasing its interests in funds
managed by the Defendants. The amount of the settlement allocated to the Fund by
the Managing Shareholder totaled $260.


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


On March
20, 2007, Bergeron commenced a derivative action, in Suffolk County Superior
Court, Commonwealth of Massachusetts. Bergeron joined the Fund and 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 the Fund and affiliated entities was unfair and sought
an injunction prohibiting the distribution to shareholders of such proceeds. The
Superior Court denied the request by the plaintiffs for an injunction. On
February 29, 2008, the plaintiffs filed an amended complaint adding two
additional investors, one in the Fund and one in Trust V, as additional
plaintiffs. Discovery is ongoing and a trial date is currently scheduled
for January 2011. While Bergeron is no longer a party to the derivative action,
the other plaintiffs continue to pursue this matter.





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
with a combined total of approximately $1,200. Discovery is ongoing and a trial
date is currently scheduled for May 17, 2010. The costs and expenses of
this litigation, including adverse judgments, if any, are being paid by the
Managing Shareholder and affiliated management companies and not the underlying
investment funds.





The Fund
may become subject to legal proceedings involving ordinary and routine claims
related to its business. The ultimate legal and financial liability with
respect to all 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 in this Note 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 its financial condition or results
of operations.





10.           OTHER
LIABILITIES





The
Fund’s Egypt projects have an arrangement with a consultant that provides
marketing, construction and management services in Egypt. 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. Effective with the sale of REFI, this
arrangement has been terminated and the consultant waived any bonus and
termination payments from NEH to which he otherwise would be entitled to in
connection with the sale.





NEH had
additional consulting arrangements with two individuals for services related to
its investment in Egypt. 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, NEH agreed 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 $265 and $325 at December 31, 2009
and 2008, respectively, to reflect this obligation which is
included in other liabilities in the consolidated balance
sheets.





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 the Egypt projects remain
operational. In the event that the Egypt projects 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, net of certaim adjustments. NEH had a
liability of $764 and $805 at December 31, 2009 and 2008, respectively, to
reflect this obligation, which is
included in other liabilities in the consolidated balance
sheets.





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


11.           INCOME
TAXES





The
components of loss from continuing operations before provision for income taxes
and noncontrolling interest for the years ended December 31, 2009 and 2008 are
as follows:





2009
            
            
            2008United
      States
            
            $
            (2,894
            )
            
            $
            (3,133
            )Foreign
            
            
            (9,051
            )
            
            
            1,994$
            (11,945
            )
            
            $
            (1,139
            )





The
foreign component includes operations of NEH which is subject to an Egyptian tax
holiday which commenced on January 1, 2001 and began to expire on December 31,
2008.





The
provision for income taxes on continuing operations for the years ended December
31, 2009 and 2008 consists of:





2009
            
            
            
            2008Current:Foreign
            
            $
            -
            
            
            $
            5DeferredForeign
            
            
            150
            
            
            
            464Income
      tax expense
            
            $
            150
            
            
            $
            469




The
Fund’s effective tax rate differs from the statutory federal income tax rate for
the years ended December 31, 2009 and 2008 as follows:





2009
            
            
            2008US
      federal income taxes at the statutory rate
            
            
            0%
            
            
            
            0%(Loss)
      income subject to tax at the subsidiarylevel
      (at statutory rate)
            
            
            -1%
            
            
            
            -41%Effective
      tax rate
            
            
            -1%
            
            
            
            -41%





The Fund
has recorded income tax expense (benefit) for US Hydro operations of $1,060 and
($680) for the years ended December 31, 2009 and 2008, respectively, which is
included in discontinued operations in the consolidated statements of
operations.




Deferred
income taxes reflect the effects of temporary differences between the carrying
amount of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The components of the Fund’s deferred
income tax liabilities relates to Egypt operations and includes
depreciation and amortization of $1,023 and $858 at December 31, 2009 and 2008,
respectively. The net deferred tax asset of US Hydro operations is included as
discontinued operations in the consolidated balance sheets.




12.           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. The Fund paid the Managing Shareholder an annual
management fee of $1,645 for each of the years ended December 31, 2009 and
2008, as compensation for the services the Managing Shareholder provides to the
Fund, which was equal to 2.5% of the total contributed capital of the Fund. 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.




Under the
Operating Agreement with the Fund, 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, 2009 and
2008, RPM charged the projects $409 and $480, respectively, for overhead items
allocated in proportion to the amount invested in projects managed. In addition,
for the years ended December 31, 2009 and 2008, RPM charged the projects $2,522
and $2,105, respectively, for direct expenses allocated in proportion to the
amount invested in projects managed.  These charges may not be
indicative of costs incurred if the projects were not operated by
RPM.


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





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% per
annum 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 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 the Fund. The Managing Shareholder
did not receive any distributions during 2009 and 2008. The Fund has not yet
reached Payout and is not expected to do so.





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.





RRP owns
2.25 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.





In
accordance with the  Declaration of Trust, upon or prior to the first
distribution by the Fund in liquidation, the Managing Shareholder is required to
contribute to the capital of the Fund an amount equal to any deficit in the tax
basis capital account of the Managing Shareholder calculated just prior to the
date of such distribution. As of December 31, 2008, the last date such
calculation was made, the Managing Shareholder would not have been required to
make any contributions to the Fund.





The Fund
records short-term payables to and receivables from certain of its affiliates in
the ordinary course of business. The amounts payable to and receivable from its
affiliates, other than amounts relating to management fees, do not bear
interest. At December 31, 2009 and 2008, the Fund had outstanding receivables
and payables as follows:





Due
      From
              
              
              Due
      To2009
              
              
              2008
              
              
              2009
              
              
              2008Ridgewood
      Power Management LLC
              
              $
              -
              
              
              $
              -
              
              
              $
              11
              
              
              $
              36Ridgewood
      Renewable Power LLC
              
              
              -
              
              
              
              -
              
              
              
              1,633
              
              
              
              1,072Trust
      V
              
              
              150
              
              
              
              -
              
              
              
              -
              
              
              
              189Egypt
      Fund
              
              
              130
              
              
              
              -
              
              
              
              -
              
              
              
              451Other
      affiliates
              
              
              15
              
              
              
              15
              
              
              
              -
              
              
              
              -$
              295
              
              
              $
              15
              
              
              $
              1,644
              
              
              $
              1,748


13.           SUBSEQUENT
EVENT





On or
about February 8, 2010, the Managing Shareholder, on behalf of the Fund and the
Egypt Fund, solicited the approval of the Investor Shares for the sale of the
Egypt business. As the Egypt business represented a significant portion of
Fund’s assets, the Managing Shareholders informed the Fund’s shareholders that
this sale, if completed, would cause the Fund to commence its liquidation and
dissolution. As part of the solicitation process, shareholders received a form
of the Fund’s Plan of Dissolution. The shareholders of both the Fund and the
Egypt Fund approved the transaction and on March 2, 2010, the funds that own NEH
received gross proceeds, prior to expenses, of $13,000; the gross proceeds
allocated to the Fund totaled $8,853. The transaction agreements did not give
the purchasers any rights to post-closing claims for indemnification against the
NEH or any of the affiliated trusts. Under the transaction agreements, all
parties mutually agreed to release each other from any and all claims they may
have against each other. NEH and the Fund did not make any representation or
warranties in the connection with the transaction.