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, 2004

[ ]   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              (IRS Employer Identification
    Incorporation or Organization)                         Number)

                     1314 King Street, Wilmington, DE 19801
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          (Address of Principal Executive Offices, including Zip Code)

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

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

                                      None
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           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                     Investor Shares of Beneficial Interest
        -----------------------------------------------------------------
                                (Title of Class)

      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[ ]  No[X]

      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. [ ]

      Indicate by check mark  whether  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes[ ] No[X]

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act. Yes[ ]  No[X]

      There is no market for the  Investor  Shares.  As of  February  28,  2006,
number of shares outstanding was 658.1067.

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<PAGE>

                                    FORM 10-K

                                TABLE OF CONTENTS

                                     PART I

Item 1.    Business ..........................................................
Item 2.    Properties ........................................................
Item 3.    Legal Proceedings .................................................
Item 4.    Submission of Matters to a Vote of Security Holders ...............

                                     PART II

Item 5.    Market for Registrant's Common Equity, Related Shareholder Matters
              and Issuer Purchases of Equity Securities ......................
Item 6.    Selected Financial Data ...........................................
Item 7.    Management's Discussion and Analysis of Financial Condition and
              Results of Operation ...........................................
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk ........
Item 8.    Financial Statements and Supplementary Data .......................
Item 9.    Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure ...........................................
Item 9A.   Controls and Procedures ...........................................
Item 9B.   Other Information .................................................

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant ................
Item 11.   Executive Compensation ............................................
Item 12.   Security Ownership of Certain Beneficial Owners and Management
              and Related Shareholder Matters ................................
Item 13.   Certain Relationships and Related Transactions ....................
Item 14.   Principal Accountant Fees and Services ............................

                                     PART IV

Item 15.  Exhibits and Financial Statement Schedules .........................

SIGNATURES ...................................................................


                                        2

<PAGE>

                                     PART I

Item 1.  Business.

Cautionary Statement Regarding Forward-looking Statements

      This Annual  Report on Form 10-K of The  Ridgewood  Power Growth Fund (the
"Fund") includes "forward-looking  statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of
the  Securities  Exchange Act of 1934,  as amended,  and the Private  Securities
Litigation Reform Act of 1995, and the "safe harbor" provisions  thereof.  These
forward-looking  statements are usually accompanied by the words  "anticipates,"
"believes," "plan," "seek," "expects," "intends," "estimates," "projects," "will
likely result," "will continue," "future" and similar terms and expressions. The
forward-looking  statements  in this  Annual  Report  on Form 10-K  reflect  our
current views with respect to future events and financial  performance.  To make
these statements, we have had to make assumptions as to the future. We have also
had to make estimates in some cases about events that have already occurred, and
to rely on data  that may be found to be  inaccurate  at a later  time.  Because
these  forward-looking  statements  are  based  on  assumptions,  estimates  and
changeable  data,  and  because  any attempt to predict the future is subject to
other errors, future results may be materially different from those discussed or
anticipated  in this report.  Some of the events that could cause actual results
to differ  materially  from  historical  results  or those  anticipated  include
changes in  political  and  economic  conditions,  federal  or state  regulatory
structures,  government  taxation,  spending and budgetary policies,  government
mandates, demand for electricity and thermal energy, the ability of customers to
pay for energy  received,  supplies and prices of fuels,  operational  status of
generating plants,  mechanical breakdowns,  volatility in the price for electric
energy,  natural  gas,  or  renewable  energy,  availability  of  labor  and the
willingness of electric utilities to perform existing power purchase  agreements
in good faith,  and such other risks and  uncertainties  as are discussed in the
Fund's Registration  Statement on Form 10 filed with the Securities and Exchange
Commission on April 30, 1999.

      You  should  not  rely  on  these   forward-looking   statements   without
considering all of the things that could make them inaccurate.  The Fund's other
filings with the Securities and Exchange  Commission and its offering  materials
discuss  many (but not all) of the risks and  uncertainties  that  might  affect
these forward-looking statements.

      We  undertake  no  obligation  to publicly  revise  these  forward-looking
statements to reflect events or  circumstances  that may arise after today.  All
subsequent  written or oral  forward-looking  statements  attributable  to us or
persons  acting on our behalf are expressly  qualified in their entirety by this
section.

-  General Development of Business.

      The Fund was  organized  as a Delaware  business  trust in January 1998 to
participate in the development,  construction and operation of independent power
generating facilities and similar capital projects ("Independent Power Projects"
or "Projects").  The Fund was also authorized to invest in capital projects that
at the time of such investment were expected to earn cash flows similar to those
of Independent Power Projects.

      The Fund sold whole and  fractional  shares of beneficial  interest in the
Fund  ("Investor   Shares")  pursuant  to  a  private  placement  offering  (the
"Offering"),  which terminated in April 2000. Net of offering fees,  commissions
and expenses,  the Offering provided approximately $54.6 million for investments
in the development and acquisition of Projects.  As of February 28, 2006,  there
were 1,330 record holders of Investor Shares (the "Investors").

      The Fund has two  managing  shareholders:  Ridgewood  Renewable  Power LLC
("Ridgewood  Power")  and  Ridgewood  Power VI LLC  ("Power  VI").  Power VI has
assigned and delegated all of its rights and responsibilities to Ridgewood Power
and is  essentially an entity that conducts only nominal  activities.  Ridgewood
Power and Power VI are collectively  referred to as the "Managing  Shareholder".
Both Ridgewood  Power and Power VI are  controlled by Robert E. Swanson,  who is
the manager,  chairman,  and,  together with his family trusts,  owns all of the
membership  interests of each  entity.  The officers of Power VI are the same as
those of Ridgewood Power.  Ridgewood Power takes all actions necessary to manage
the Fund, without any participation by Power VI.

      In general, the Amended Declaration of Trust ("Declaration")  provides the
Managing  Shareholder with complete  control of the day-to-day  operation of the
Fund. The Managing  Shareholder  has appointed a slate of officers to enable the
Fund to carry out its affairs in a manner similar to a conventional corporation.
The Fund does not have a board of directors nor an audit committee or nominating
committee  as  contemplated  by the  Sarbanes-Oxley  Act of 2002.  Instead,  the
Managing  Shareholder  effectively  performs  the  functions  that the  board of
directors or the audit or nominating committee would otherwise perform.

                                        3

<PAGE>

      Christiana Bank & Trust Company ("Christiana"),  a Delaware trust company,
is the  corporate  trustee  of the  Fund.  The  corporate  trustee  acts  on the
instructions  of  the  Managing  Shareholder  and  is  not  authorized  to  take
independent discretionary action on behalf of the Fund.

      Ridgewood  Power also serves as the Managing  Shareholder of the following
Delaware business trusts (the "Other Power Trusts"):

            o     Ridgewood Electric Power Trust I ("Power I");

            o     Ridgewood Electric Power Trust II ("Power II");

            o     Ridgewood Electric Power Trust III ("Power III");

            o     Ridgewood Electric Power Trust IV ("Power IV");

            o     Ridgewood Electric Power Trust V ("Power V");

            o     Ridgewood/Egypt Fund ("Egypt Fund"); and

            o     Ridgewood Power B Fund/Providence Expansion ("B Fund")

      In addition,  Ridgewood  Power also serves as the manager of the following
Delaware limited liability companies ("Ridgewood LLCs"):

            o     Ridgewood Renewable PowerBank LLC; ("PowerBank I")

            o     Ridgewood Renewable PowerBank II LLC; ("PowerBank II")

            o     Ridgewood Renewable PowerBank III LLC;  ("PowerBank III"); and

            o     Ridgewood Renewable PowerBank IV LLC. ("PowerBank IV")

   Financial Information about Industry Segments.

      The  Fund  has  been  organized  to  operate  in  two  industry  segments:
independent water  desalinization  and power generation and related  facilities.
See  Item  8.  Financial   Statements  and  Supplementary   Data  for  financial
information about industry segments.

   Narrative Description of Business.

(1) General Description.

      The  Fund  was  formed  to  participate  principally  in the  development,
construction  and operation of Projects that  generate  electricity  for sale to
utilities  and other users.  The Fund was also  authorized  to invest in capital
projects that, at the time of such  investment  were expected to earn cash flows
similar to those of Independent Power Projects.

(2) The Fund's Investments.

      (i) United Kingdom Landfill Gas Projects

The Fund and Power V own 30% and 70% of  Ridgewood  UK,  LLC  ("Ridgewood  UK"),
respectively,  which in turn owns a  majority  interest  of CLPE  Holdings,  LTD
("CLPE").  As of December 31, 2004,  CLPE owned  twenty eight  landfill  methane
gas-fired electric  generating  projects in the United Kingdom with an installed
capacity of  approximately  42.2  megawatts  ("MW").  Seventeen  of the projects
representing  approximately  26.5 MW sell electricity under 15 year contracts to
the Non Fossil  Purchasing  Agency  ("NFPA"),  a  non-profit  organization  that
purchases  electricity  generated by renewable  sources on behalf of all British
utilities. The remaining eleven projects representing  approximately 15.7 MW are
subject to a  PowerBank  Program  lease  (described  below) and sell this output
under one year,  market-based  contracts.  As of December 31,  2005,  CLPE owned
thirty one landfill methane gas-fired electric generating projects in the United
Kingdom with an installed capacity of approximately 48.7 MW.

      CLPE's  NFPA  Projects  have been  financed,  in part,  by bank  financing
provided by the Bank of Scotland. NFPA began in 1990 as a program supported by a
small  broad-based  tax  on  electricity  consumption  that  required  companies
supplying  end-use  customers to use the power  supplied  under NFPA  contracts,
including power produced at generating  facilities  using wind,  water and waste
materials,  including  landfill gas. The NFPA Projects enjoy a guaranteed  price
and market under the NFPA contracts for their output.

                                        4

<PAGE>

      In addition to its developed and operational projects,  CLPE had, in 2002,
a portfolio of  undeveloped  landfill  methane power projects that would qualify
under the United Kingdom's  Renewable  Obligation  ("RO") incentive program (the
"RO  Program").  The RO Program was adopted and  implemented  as a successor  to
Non-Fossil Fuel Obligation  ("NFFO") which had become outmoded by changes in the
regulatory  structure of the U.K.'s electricity  supply industry.  Existing NFPA
contracts  remain in full  force and  effect.  Similar  to  renewable  portfolio
standards  ("RPS")  legislation  in the United States,  the RO Program  requires
electricity  suppliers serving electricity users in the U.K. to obtain renewable
obligation  certificates  (each a "ROC") to demonstrate  that a portion of their
electricity supply portfolio was generated by registered producers.  Electricity
suppliers  are  required  to supply an  increasing  portion  of their  delivered
electricity  from  qualified  renewable  sources or face  penalties.  While this
portfolio of undeveloped  sites was  potentially  very profitable as a result of
the RO  Program,  CLPE,  despite  significant  efforts,  was  unable  to  obtain
traditional debt financing necessary to develop these projects.

      As a result, the Managing Shareholder organized the Ridgewood LLCs to fund
the "PowerBank  Program" by raising the funds needed to finance the  development
of CLPE's portfolio of undeveloped sites and such new development  opportunities
as CLPE could obtain (the "RO  Projects").  Since December 2002,  four PowerBank
Programs have been issued.  Pursuant to certain Development  Services Agreements
(the "Development Agreements") and Operations, Repair and Maintenance Agreements
("OR&M Agreements") between Ridgewood UK and each of the PowerBank Programs, the
PowerBank  Programs purchase the facility site needed to develop and operate the
subject RO Projects and then, in return for a fixed and variable  lease payment,
said  sites will be leased  back to  Ridgewood  UK subject to a 10 year  minimum
lease  pursuant  to  sale-lease  back  agreements.  Pursuant to the terms of the
applicable Development Agreement,  the PowerBank Programs retain CLPE to develop
each RO Project on a fixed  price per MW, on a turnkey  basis.  The  Development
Agreements,  however,  do not generally contain completion or timing obligations
for the  development of the subject RO Projects.  Accordingly,  while CLPE bears
the risk that the cost of developing such RO Projects may exceed the agreed upon
price, the subject PowerBank  Programs run the risk that the development of such
RO Projects is  substantially  delayed or is not  completed.  In addition,  CLPE
operates and  maintains  each of these RO Projects.  In return for its services,
CLPE has the  opportunity  to  obtain a share in the  development  profit if the
construction and development of the RO Project is less than the fixed price, and
it also receives  continuing  payments under the OR&M  Agreements.  In addition,
after certain required payments, including the fixed and variable lease payments
to  PowerBank  Programs  and royalty  payments to the  landfill  operator,  CLPE
receives a certain  portion of the energy and ROC  revenue  generated  by the RO
Project.  This amount is variable and depends on the price of energy and ROCs in
the U.K.  In  addition  to these  revenues,  incremental  profits  from these RO
Projects, once developed, resulting from a combined power plus ROC price greater
than 7.0 pence per  kilowatt  hour  ("kWh")is  divided  between  the  applicable
PowerBank  Programs and Ridgewood UK's investors  (i.e.,  the Fund and Power V),
with  two-thirds of the incremental  profit going to the PowerBank  Programs and
one-third of the incremental  profit going to Ridgewood UK as  compensation  for
its participation in and facilitation of the PowerBank  Programs.  This payment,
should it be made,  is  specifically  allocated  to  Ridgewood  UK, not to CLPE.
Ridgewood UK will  receive its  distribution  in the form of a cash  allocation.
Sixteen of the RO Projects  developed by CLPE pursuant to the PowerBank Programs
were developed and operating as of December 31, 2005.

      (ii)  Egyptian Projects

      In 1999,  the Fund and  Power V  jointly  organized  Ridgewood  Near  East
Holdings, LLC, a New Jersey limited liability company ("Ridgewood Near East") as
a holding company for their Egyptian investments. In 2001, the Egypt Fund became
a member of  Ridgewood  Near East.  The Fund,  Power V, and Egypt Fund  ("member
Funds"),  as of December 31, 2005, have contributed  approximately $39.1 million
in aggregate to  Ridgewood  Near East.  Each fund which is a member of Ridgewood
Near East owns equity in proportion to the capital the fund has contributed, net
of distributions and allocated profits and losses. Ridgewood Near East, in turn,
owns all of Ridgewood Egypt For Infrastructure  Projects LLC ("REFI"),  which is
the entity through which the Egyptian  investments  are made. REFI has developed
projects to supply  electricity and potable water to the tourist industry on the
Red Sea in Egypt (the "Egyptian Projects").  As of December 31, 2005, REFI had 1
electric generation plant, 8 water desalinization  plants ("water plants") and 8
combination electric generation/water plants.

      REFI's  larger  water  plants have  underground  pipelines  that allow the
plants to sell their water to a number of customers. Many of REFI's water plants
also have the  capability  to sell their  water to trucks for  delivery to other
customers.  Only two of REFI's  water  plants are limited to selling  water to a
single customer.

      REFI's projects generally sell their electricity and drinking water output
at prevailing market rates. There is no formal regulatory authority that reviews
those prices or which has  authority  to set them.  REFI's  operating  expenses,
which are charged against the Egyptian Projects' cash flow, include  development
and administrative, operation and maintenance activities for all of its Egyptian
Projects.  To the  extent  possible,  REFI's  electricity  sales  provide  for a
pass-through cost as the price of diesel fuel changes.

                                        5

<PAGE>

      On December  30,  2001,  the Fund,  through  REFI,  purchased a 28% equity
interest  in Sinai  Environmental  Services  S.A.E.  ("Sinai").  As a result  of
further investments,  Ridgewood Near East increased the equity interest in Sinai
to 53% in 2002 and obtained control of all aspects of its operations.  Ridgewood
Near East is currently  entitled to an additional  equity  interest in Sinai, in
return for providing Sinai with certain machinery and equipment.  At the time of
the initial acquisition of Sinai, it had an outstanding loan from H.S.B.C. Bank,
S.A.E.  (formerly  Egyptian British Bank) ("HSBC").  In December 2003, a dispute
arose  between Sinai and HSBC in connection  with the  outstanding  loan. In the
second quarter of 2005,  HSBC and Sinai settled their dispute by agreeing on the
extension and revised  payment  schedule.  Sinai has remained in full compliance
with the terms of the loan as modified by the parties' settlement.

      (iii) ZAP

      The Fund invested  $2,050,000 in Ridgewood ZAP, LLC  ("Ridgewood  ZAP") in
March  1999  as a  wholly  owned  holding  company  for its  investments  in ZAP
(formerly  ZAPWorld.COM,  Inc.  and ZAP  Power  Systems,  Inc.).  As part of the
$2,050,000  share  purchase,  the Fund  also  received  a  warrant  to  purchase
additional  shares of ZAP's common stock at a price  between $3.50 and $4.50 per
share.  In June 1999,  the Fund  exercised  the  warrant and  purchased  571,249
additional shares for approximately $2,000,000, or $3.50 per share. ZAP designs,
assembles,   manufactures   and   distributes   electric   vehicles,   including
automobiles,  bicycle  power kits,  electric  bicycles and  tricycles,  electric
scooters,  and other  electric  transportation  vehicles.  ZAP's common stock is
quoted on the OTC  Bulletin  Board under the symbol  "ZP".  In the early part of
2001,  the Fund  agreed to sell to ZAP,  and  certain of its  shareholders,  the
Fund's interest in ZAP in return for a $1,500,000  interest  bearing  promissory
note (the "Ridgewood ZAP Note").

      On March 1, 2002, ZAP filed a voluntary petition for reorganization  under
Chapter 11 of the U. S.  Bankruptcy  Code with the US Bankruptcy  Court in Santa
Rosa,  California.  On or  about  July 1,  2003,  the  Second  Amended  Plan for
Reorganization  became  effective and the Ridgewood ZAP Note was converted  into
994,500  shares of common stock in ZAP, as  reorganized  (the  "Reorganized  ZAP
Shares").  When  Reorganized ZAP Shares were issued to Ridgewood ZAP, as well as
all  other  unsecured  creditors  who  opted  for  an  equity  interest  in  the
reorganized  ZAP (as  opposed to taking less than $.10 on the dollar for amounts
owed by ZAP at the time of the bankruptcy  filing),  the  Reorganized ZAP Shares
were subject to a  restriction  on sales or transfers  which was scheduled to be
incrementally  removed beginning the third quarter of 2003, on approximately 12%
of the  Reorganized  ZAP  Shares  per  quarter.  As part of the  reorganization,
Ridgewood  ZAP also  received  a  warrant  granting  it the  right  to  purchase
994,500 ZAP shares at a price of $1.07 per share.

      Upon the  lifting  of the  transfer  restrictions  on the first set of the
Reorganized  ZAP Shares in  September  2003,  Ridgewood  ZAP sold  approximately
118,000  of those  shares to a private  individual  for $1.00 per  share,  which
represented  a 10%  discount  off the then  current  public  market price of ZAP
shares. Thereafter,  during the second and third quarters of 2004, Ridgewood ZAP
distributed  approximately  772,500 shares of the  Reorganized ZAP Shares with a
market value (as defined) of approximately  $2,080,000 to the Fund's  investors.
The transfer  restrictions on approximately  104,000 Reorganized ZAP Shares were
removed in 2005.  As of the date of this report,  Ridgewood  ZAP intends to sell
these shares.

      In May 2004,  Ridgewood  ZAP  exercised  its rights  under the  warrant to
purchase  994,500  shares at $1.07 per share.  As an  incentive  to exercise the
warrant it  received  in the  reorganization,  Ridgewood  ZAP  received a second
warrant.  Ridgewood ZAP exercised the second warrant in December 2004,  with the
purchase of 538,462 shares at a $3.25 per share.  Ridgewood ZAP has been engaged
in a program of sales of shares it purchased  from the exercise of the warrants.
It is expected  that the sale of the  remaining  Reorganized  ZAP Shares will be
completed in the first quarter of 2006.

      In 1999, Mr. Swanson purchased a franchise to distribute ZAP's products in
the eastern portion of Long Island, New York. See Item 13. Certain Relationships
and Related Transactions for additional information.

      (iv)  Ridgewood US Hydro Corporation

      On November  22,  2002,  the Fund and Power V acquired  Ridgewood US Hydro
Corporation  (formerly Synergics,  Inc.), which at the time owned a portfolio of
seven existing hydroelectric generating plants located in California,  Virginia,
Rhode Island and New York (the "US Hydro Projects"). Except for one project (the
Blackstone Project),  as of December 31, 2005, all of the US Hydro Projects sold
their  electric  output to local  utilities  pursuant  to power  contracts.  The
Blackstone  project, in Rhode Island, is currently selling its output to the New
England  Independent  System Operator (the "NE-ISO").  The US Hydro Projects are
managed by Ridgewood Power Management  ("RPM") with each US Hydro Project having
a local RPM employee assigned to manage its day-to-day operations.

      At the time of the acquisition of Ridgewood US Hydro by the Fund and Power
V, a note receivable from the US Hydro Project at New Lahontan ("New  Lahontan")
was subject to Bank of America debt.  New Lahontan was owned and

                                        6

<PAGE>

operated by the Truckee-Carson  Irrigation  District ("TCID"),  which also owned
the adjacent Old Lahontan  Hydroelectric Power Plant ("Old Lahontan").  The Fund
and Power V owned essentially a contractual right to payments from TCID based on
New Lahontan's KWh production.  Initially the Managing Shareholder believed that
New Lahontan would be able to operate at high capacity factors and deliver power
pursuant to a high-priced  standard offer contract.  After experiencing  several
months of  operations  at New  Lahontan,  it became  clear  that Old  Lahontan's
operation  at full  capacity  prevented  New  Lahontan  from  operating  at high
capacity.  In addition,  New Lahontan and Old Lahontan  only operate if water is
released from the Lahontan Reservoir. Such releases,  however, require the water
to be diverted from the Truckee River,  which adversely affects Pyramid Lake and
the  interests of those who own and use the lake.  Lawsuits  have been filed and
litigated  between TCID and the Pyramid Lake Indian Tribes over  diversions from
the Truckee  River.  As a result,  in order to protect the  divergent  interests
associated  with,  and reduce or minimize the water used from the Truckee River,
TCID  releases  water  pursuant to certain  operating  criteria  and  procedures
adopted and enforced by the US  Department  of Interior,  Bureau of  Reclamation
(the  "Bureau");  the Bureau has been  reducing  the amount of water that can be
released by TCID.  Based on the number of parties and complicated  nature of the
relationships between those parties, the Managing Shareholder ultimately decided
to negotiate a sale of its note receivable in New Lahontan to TCID. On March 31,
2004,  the US Hydro  Projects  sold its  interest  in New  Lahontan  to TCID for
$4,000,000,  which was used to  partially  pay down the  outstanding  $5,650,000
balance of the Bank of America debt.

      In the fourth quarter of 2004, the US Hydro Projects',  Blackstone and New
England Power ("NEP")  mutually  agreed to terminate  their 1989 power  purchase
agreement. As per the terms of the Termination and Release Agreement, Blackstone
now has the right to sell its  production of electricity to any party it chooses
(as of December 31, 2005, the NE-ISO).  In addition,  beginning January 2005 NEP
will pay  Blackstone  $16,000  per month  through  February  2010 and a lump sum
payment of  $1,000,000  on February 15, 2010 to  compensate  Blackstone  for the
cancellation of the fifteen years remaining on the original agreement.

      (v)   Investments  No  Longer  Owned/Operating/Written-Off:  Mediterranean
            Fiber Optic Project

      In September 1999, the Fund and Power V organized  Ridgewood  MedFiber LLC
and each of them  contributed  $1.5 million to the joint venture on equal terms.
Ridgewood  MedFiber  then  invested  the $3 million in a 25% equity  interest in
Global Fiber Group, a developer  seeking to construct a 3,600  kilometer  (2,200
mile) underwater fiber optic cable through Spain,  Southern France and Italy via
the Mediterranean Sea. In February 2000 the original management,  which had been
unable to obtain additional equity financing for the Project, agreed to withdraw
from the venture.  Ridgewood  MedFiber was unable to find other equity investors
for the venture and the venture  ceased  activity in the second quarter of 2000.
Accordingly,  the Fund wrote off its entire  investment in the Project effective
March 31, 2000.

(3) Project Management and Operation.

      (i) The United Kingdom Projects

The  electricity  markets in the United Kingdom were fully  deregulated  several
years before deregulation began in the US. Accordingly, the Fund has invested in
a niche area,  landfill  gas power  plants  which enjoy a  guaranteed  price and
market  for the  output  of those  projects  owned in the UK by the Fund  (i.e.,
non-PowerBank  Projects),  and are not subject to price  fluctuations  for their
fuel. The major business risks and considerations are to keep operating costs to
a minimum  through good design,  preventative  maintenance and attention to fuel
quality/availability, governmental policy changes and exchange rate fluctuations
affecting the pound-denominated revenues from these Projects.

      (ii) The Egyptian Projects

      Generally, the Projects in Egypt are located at or near resort hotel sites
on the Red Sea, which are distant from other  electric and water  sources.  REFI
developed  these Projects  using local  engineering  personnel and  contractors.
Environmental,  construction,  legal, and labor  requirements in Egypt are often
unclear and can change  unpredictably at any time and without warning.  REFI may
find it difficult to enforce contracts and other legal obligations against local
suppliers or customers. There are no backup facilities to provide electricity or
water  if  the   Projects   fail  or  are  unusable  for  any  period  of  time.
Specifications  for Projects have changed suddenly and unpredictably and in some
cases it has been  necessary  for REFI to construct  additional  infrastructure.
Cultural, language and political differences between Egypt and the US may impair
communication  with  personnel,  cause errors and possibly  cause hostile action
against the Projects by employees,  residents or  governmental  agencies.  There
have been  occasional  terrorist  incidents in Egypt  directed  against  Western
tourists and tourist facilities.  In addition, the War in Iraq and other turmoil
in the Middle East,  although  somewhat  removed from Egypt, can have a negative
effect on tourism.  Further such incidents might deter tourism and make the host
hotel  resorts  unprofitable  or might even be  directed  against  the  Egyptian
Projects or their personnel.

                                       7

<PAGE>

      The Egyptian  Projects use diesel engines powered by light fuel oil, which
is  delivered by tanker  truck.  Supply  interruptions,  oil spills or fires are
possible.  Although  the  Egyptian  Projects  are  exposed  to world  oil  price
variations,  this risk is mitigated to certain  extent as the Egyptian  Projects
adjust their prices to  substantially  transfer the risk tied to fuel oil prices
to  their  customers.  This  risk is also  somewhat  mitigated  by the  Egyptian
government which controls the price of fuel and tries to limit price movements.

      The customers of most of the Egyptian  Projects are single  hotels.  It is
possible that adverse events in the tourist  industry,  such as labor  disputes,
airline   problems,   shortages  of  personnel,   changes  in  customer   taste,
environmental  problems,  overbuilding and  international  political or cultural
developments  could depress  tourist trade to the point that the hotels would be
unable to pay for water or power.  Other risks include  currency  conversion and
repatriation risks, exchange rate fluctuations, taxation disputes, international
hostilities,  arbitrary  governmental action,  religious tensions,  anti-foreign
sentiments and legal changes.

      (iii) The US Hydro Projects

      The US Hydro Projects are qualifying  facilities ("QFs") as defined in the
Public  Utilities  Regulatory  Policies Act of 1978,  as amended  ("PURPA")  and
operate under power contracts with their local distribution utilities. Under the
power  contracts,  the local utilities are obligated to purchase the contractual
output of these Projects at formula  prices.  No separate  payments are made for
capacity  and all  payments  under  the  power  contracts  are made  for  energy
supplied.  The US Hydro  Projects  are  licensed or  operated as  "run-of-river"
facilities, which means that the amount of water passing through the turbines is
directly dependent upon the fluctuating flow of the river or stream.  (Output of
the US Hydro Projects is dependent upon rainfall and snowfall in the areas above
the dams.)  The US Hydro  Projects  have no  meaningful  ability to store  water
during high flows for use at low flow periods,  and therefore,  produce electric
energy  and sell it as  generated  at the  fixed  rates  provided  in the  power
contracts.  The US Hydro Projects are not subject to fuel price changes.  Output
is  generally  lowest in the summer and highest in the spring and fall.  RPM has
assigned 3 full time employees to the US Hydro Projects.

      (iv)  Renewable Power Generated by the US Hydro Projects and UK Projects

      The US Hydro Projects and the UK Projects owned by the Fund are "renewable
power" projects. "Renewable power" (often called "green power") is a catchphrase
that includes  projects  (such as solar,  wind,  small  hydroelectric,  biomass,
geothermal  and  landfill-gas)  that do not use fossil  fuels or nuclear  fuels.
Renewable  power plants  typically  have high capital costs and often have total
costs that are well above current total costs for new gas-turbine production.

      Because of the desire of governmental bodies to encourage use of renewable
power as an alternative to fossil/nuclear  plants, a number of incentive regimes
have been established to make renewable power more  competitive.  As a result of
RPS  programs  in the US,  and the NFFO and RO  Program  in the UK,  the  Fund's
Projects have generally been selling their electric  output and the renewable or
"green" credits associated with such electric power, in most cases, at a premium
over current wholesale electric rates.

      (v)   General Considerations

      The major  costs of  operating  a Project  are fuel,  taxes,  maintenance,
operating  labor  and debt  service  (if  applicable).  The  ability  to  reduce
operating  interruptions and to have a Project's  capacity available at times of
peak demand is critical to the profitability of a Project. Accordingly,  skilled
management is a major factor in the Fund's business.

      In order to operate, most Projects require a variety of permits, including
zoning and environmental  permits.  Inability to obtain such permits will likely
mean that a new  Project  will not be able to commence  operations,  and even if
obtained, such permits must usually be kept in force in order for the Project to
continue its operations once commenced.

      Compliance  with  environmental  laws is  also a  material  factor  in the
independent power industry. The Fund believes that capital expenditures for, and
other costs of,  complying  with  environmental  protection  have not materially
disadvantaged its activities relative to other competitors and will not do so in
the future.  Although  the  capital  costs and other  expenses of  environmental
protection may constitute a significant  portion of the costs of a Project,  the
Fund believes that those costs imposed by current laws and regulations have been
and will continue to be largely  incorporated into the prices of its investments
and it  has  accordingly  adjusted  its  investment  program  so as to  minimize
material  adverse  effects.  If future  environmental  standards  require that a
Project spend increased amounts for compliance,  any such increased  expenditure
could  have an  adverse  effect on the Fund to the extent it is a holder of such
Project's equity securities.

      Customers that accounted for more than 10% of the consolidated  revenue to
the Fund in each of the last three fiscal years are:

                                        8

<PAGE>

                                                            Calendar Year
                                                            -------------
                                                      2004      2003      2002
                                                      ----      ----      ----
             US Hydro Customers
                            Dominion                  14.4%     16.9%       --
                            PacifiCorp                22.4%     27.9%       --

             Ridgewood Near East Customers
                            Meridien Makadi Bay         --        --      20.6%
                            Pyramisa Sharm              --        --      10.1%

(4)   Competition.

      The independent  power industry is considered to be mature and there are a
large number of participants in the  independent  power industry.  Several large
corporations specialize in developing,  building and operating independent power
plants. Equipment  manufacturers,  including many of the largest corporations in
the world,  provide  equipment and planning services and provide capital through
finance  affiliates.  Many regulated  utilities have organized  subsidiaries  or
affiliates  to  participate  in   unregulated   activities   such  as  planning,
development,  construction  and operating  services or owning  exempt  wholesale
generators or up to 50% of independent power plants. In addition, there are many
smaller competitive firms whose businesses are conducted primarily on a regional
or  local  basis.  Many of these  companies  focus on  limited  segments  of the
cogeneration  and independent  power industry and do not provide a wide range of
products  and  services.  There is  significant  competition  among  non-utility
producers,  subsidiaries of utilities and utilities themselves in developing and
operating  energy-producing projects and in marketing the power produced by such
projects.  Since energy is an undifferentiated  commodity,  competition is based
almost exclusively on price and ability to deliver.  Given that the Projects may
have higher cost structures than large nuclear or fossil-fueled facilities, they
would  need  to  compete  on an  alternative  basis,  such  as  their  favorable
environmental profile.

      The Fund is unable to accurately  estimate the number of  competitors  but
believes that there are many competitors at all levels and in all sectors of the
industry.  Many of those  competitors,  especially  affiliates  of utilities and
equipment manufacturers, are far better capitalized than the Fund.

      The Projects owned by the Fund's UK  operations,  which are not subject to
the  PowerBank   arrangements,   operate  under  long-term  contracts  with  the
Non-Fossil Fuels  Purchasing  Agency,  a  quasi-governmental  agency and are not
subject to competition.  Currently,  the Egyptian Projects are located in remote
coastal  areas that are not linked to the national  electric  power  network and
thus are not subject to substantial  competition for providing electricity.  The
water plants do not face substantial  competition  except from trucked-in water.
This also means that there is no substantial backup for the Egyptian Projects if
they  cannot  operate for any reason.  It is possible  that in future  years the
national  network may extend to some or all of the Egyptian  Projects,  in which
case there might be competition.

(5) Regulatory Matters.

   United States Regulation.

      Projects are subject to energy and  environmental  laws and regulations at
the federal,  state and local levels in connection with development,  ownership,
operation, geographical location, zoning and land use of a Project and emissions
and other substances produced by a Project.  These energy and environmental laws
and regulations  generally require that a variety of permits and other approvals
be  obtained  before  the  commencement  of  construction  or  operation  of  an
energy-producing  facility and that the facility then operate in compliance with
such permits and approvals.

      (i) Energy Regulation.

      (A) PURPA.  The enactment of Public Utilities  Regulatory  Policies Act of
1978, as amended ("PURPA") and the adoption of regulations thereunder by Federal
Energy Regulatory Commission ("FERC") provided incentives for the development of
cogeneration  facilities and small power production  facilities  meeting certain
criteria.  QFs under  PURPA are  generally  exempt  from the  provisions  of the
Federal Power Act, as amended (the "FPA"),  and,  except under  certain  limited
circumstances,  from state laws regarding rate or financial regulation. In order
to be a QF, a cogeneration  facility must (a) produce not only  electricity  but
also a certain  quantity  of heat  energy  (such as  steam)  which is used for a
purpose  other  than  power  generation,  (b)  meet  certain  energy  efficiency
standards  when  natural  gas or oil is  used  as a fuel  source  and (c) not be

                                        9

<PAGE>

controlled  or owned more than 50% by an electric  utility or  electric  utility
holding  company.  Other types of Independent  Power  Projects,  known as "small
power production  facilities",  can be QFs if they meet certain regulations such
as capacity, primary energy source, and utility ownership.

      The exemptions  from extensive  federal and state  regulation  afforded by
PURPA to QFs are  important to the Fund and its  competitors.  The Fund believes
that each of its US Hydro  Projects  is a QF. If a Project  loses its QF status,
the utility can reclaim payments it made for the Project's non-qualifying output
to the  extent  those  payments  are in excess of current  avoided  costs or the
Project's power contract can be terminated by the electric utility.

      (B) The 1992 Energy Act. The Comprehensive  Energy Policy Act of 1992 (the
"1992  Energy  Act")  empowered  FERC  to  require  electric  utilities  to make
available  their  transmission  facilities to, and wheel power for,  Independent
Power Projects under certain conditions.  The 1992 Energy Act is not expected to
materially and adversely  affect the Fund's business plan,  though it may result
in increased competition in the sale of electricity.

      (C) Energy  Policy Act of 2005.  The enactment of the Energy Policy Act of
2005 on August 8, 2005, has essentially  repealed  substantial portions of PURPA
and the Public Utility Holding Company Act ("PUHCA"). Notwithstanding its impact
on PURPA and PUHCA,  the Energy Policy Act of 2005 is not expected to materially
and adversely affect the Fund's business plan.

      (D) The FPA. The FPA grants FERC exclusive  rate-making  jurisdiction over
wholesale  sales of  electricity in interstate  commerce.  The FPA provides FERC
with ongoing as well as initial jurisdiction,  enabling FERC to revoke or modify
previously approved rates. Such rates may be based on a cost-of-service approach
or determined through competitive bidding or negotiation.  While QFs under PURPA
are exempt from the rate-making and certain other provisions of FPA, non-QFs are
subject to FPA and FERC rate-making jurisdiction.

      (E) State  Regulation.  State regulation is pervasive in the area of power
plant permitting and licensing. In addition, states may assert jurisdiction over
the citing and construction of Independent Power Projects.

      (ii) Environmental Regulation.

      The construction  and operation of Independent  Power Projects are subject
to extensive  federal,  state and local laws and regulations  adopted to protect
human  health  and the  environment,  and to  regulate  land  use.  The laws and
regulations  applicable to the Fund and Projects in which it invests,  primarily
involve the  discharge of emissions  into the water and air, and the disposal of
waste, but can also include wetlands  preservation and noise  regulation.  These
laws and  regulations  in many cases  require a lengthy and  complex  process of
renewing licenses, permits and approvals from federal, state and local agencies.
Obtaining  necessary approvals regarding the discharge of emissions into the air
is  critical  to the  development  of a Project  and can be  time-consuming  and
difficult.  Each Project  requires  technology and facilities  which comply with
federal,  state and local  requirements,  which  sometimes  result in  extensive
negotiations  with regulatory  agencies.  Meeting evolving  requirements of each
jurisdiction with authority over a Project may require  extensive  modifications
to existing Projects.

      The Fund's  Projects  must  comply  with many  federal  and state laws and
regulations  governing  wastewater and storm water discharges from the Projects.
These are  generally  enforced  by states  under  permits  for point  sources of
discharges and by storm water  permits.  Under the Clean Water Act, such permits
must be renewed  every five years and permit  limits can be reduced at that time
or under  re-opener  clauses at any time.  The  Projects  have not had  material
difficulty in complying with their permits or obtaining renewals.

      The  Managing   Shareholder  believes  that  environmental  and  land  use
regulations  may become more stringent in the future.  The Fund and the Managing
Shareholder  have  developed  expertise and  experience  in obtaining  necessary
licenses,  permits  and  approvals,  but still  expect  to rely  upon  qualified
environmental  consultants  and  counsel to assist in  evaluating  the status of
Projects regarding such matters.

      (iii) Potential Legislation and Regulation.

      All  federal,  state and local  laws and  regulations,  including  but not
limited to PURPA, the 1992 Energy Act, the FPA and the Energy Policy Act of 2005
are  subject to  amendment  or repeal.  Future  legislation  and  regulation  is
uncertain, and could have material effects on the Fund.

      Financial  Information  about Foreign and Domestic  Operations  and Export
Sales.

                                       10

<PAGE>

      In 2004,  2003 and 2002,  revenues  were  recorded  from  customers of the
Ridgewood US Hydro Projects and Egypt Projects.  The financial statements of the
UK  Projects  and  ZAP  are  not  consolidated  with  those  of  the  Fund  and,
accordingly,  their revenues are not considered to be operating revenues.  As of
and for the years ended  December 31, 2004,  2003 and 2002 revenue and property,
plant and  equipment  from sources  inside and outside the United States were as
follows:

<TABLE>
<CAPTION>
                                   2004                        2003                       2002
                        -------------------------   -------------------------   ------------------------
                            US           Egypt           US          Egypt          US          Egypt
                        -----------   -----------   -----------   -----------   ----------   -----------
<S>                     <C>           <C>           <C>           <C>           <C>          <C>
Revenue                 $ 5,096,362   $ 5,488,617   $ 5,844,921   $ 4,399,763   $  371,345   $ 5,459,011
Property, plant
  and equiptment, net     1,691,859    18,985,309     1,734,015    20,867,386    1,777,647    31,214,014
</TABLE>

  Employees.

      The Fund has no employees. The executive officers of the Fund described in
Item 10. Directors and Executive  Officers of the Registrant,  are not employees
of the Fund but as  officers  of the  Managing  Shareholder  have the duties and
powers applicable to similar officers of a Delaware  corporation in carrying out
the Fund's business.

Item 2. Properties.

      Pursuant to the  Management  Agreement  between the Fund and the  Managing
Shareholder  (described at Item 10(c)),  Ridgewood  Power provides the Fund with
office space at the Managing  Shareholder's  principal  offices at The Ridgewood
Commons,  947 Linwood  Avenue,  Ridgewood,  New Jersey 07450.  The Fund also has
office space at 1314 King Street, Wilmington, Delaware 19801.

      The following table shows the material  properties  (relating to Projects)
owned or leased by the Fund's subsidiaries as of December 31, 2005.

<TABLE>
<CAPTION>
                            Ownership           Ground Lease   Approximate           Project
Projects   Location         Interests in Land   Expiration     Acreage of Land       Description
--------------------------------------------------------------------------------------------------------
<S>        <C>              <C>                 <C>            <C>                   <C>
Egyptian   17 sites in      Leased by               n/a        Less than 10,         Electric generation
           Egypt*           REFI**                             collectively          and/or water
                                                                                     desalinization

US Hydro   7 sites in the   Sites owned or          n/a        Less than 15,         Hydro-electric
           US***            leased on case by                  collectively          facilities
                            case basis.****
</TABLE>

* All Egyptian sites are located on or near the Red Sea.

** Joint venture owned by Fund, Power V, and Egypt Fund.

*** Six US Hydro sites are located on the Eastern Seaboard and one in California

**** Joint venture equally owned by Fund and Power V.

<TABLE>
<CAPTION>
                                                                             Engine Generator
                              No. of Projects           Locations            Sets (MW Capacity)
<S>                                 <C>         <C>                          <C>
United Kingdom Projects(a)          31          22 in England and Scotland   50 (48.7MW)
</TABLE>

(a)   Including  Projects  owned by the UK  operations  of the  Fund  and  those
      operated under the terms of the PowerBank arrangements.

Item 3. Legal Proceedings.

        None

Item 4. Submission of Matters to a Vote of Security Holders.

        None.

                                       11

<PAGE>

PART II

Item 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
Issuer Purchases of Equity Securities.

   Market Information

      The Fund sold 658.1067 Investor Shares of beneficial  interest in the Fund
in its private placement offering, which concluded in April 2000. As of the date
of this Annual Report on Form 10-K, there has been no established public trading
market for the  Investor  Shares.  As of the date of this Annual  Report on Form
10-K, all such Investor Shares have been issued and are  outstanding.  There are
no outstanding options or warrants to purchase, or securities  convertible into,
Investor Shares.

      Investor   Shares  are   restricted  as  to   transferability   under  the
Declaration.  In addition, under federal laws regulating securities the Investor
Shares  have  restrictions  on   transferability   when  persons  in  a  control
relationship  with the Fund  hold the  Investor  Shares.  Investors  wishing  to
transfer   Investor  Shares  must  also  consider  the  applicability  of  state
securities laws. The offer and sale of the Investor Shares have not been and are
not  expected  to be  registered  under  the  Securities  Act or under any other
similar law of any state  (except for certain  registrations  that do not permit
free resale) in reliance upon what the Fund  believes to be exemptions  from the
registration  requirements  contained therein.  Because the Investor Shares have
not been  registered,  they are  "restricted  securities" as defined in Rule 144
under the 1933 Act.

   Holders

      As of  February  28,  2006,  there were 1,330  record  holders of Investor
Shares.

   Dividends

      The Fund made  distributions  as follows for the years ended  December 31,
2004 and 2003:

                                               Year ended
                                              December 31,
                                            2004          2003
                                        -----------   -----------
Total distributions to Investors        $ 3,395,366   $ 1,316,418
Distributions per Investor Share              5,159         2,000
Distributions to Managing Shareholder        13,297        13,297

      The Fund's decision whether to make future  distributions to Investors and
their timing will depend on, among other  things,  the net cash flow of the Fund
and  retention of  reasonable  reserves as  determined  by the Fund to cover its
anticipated  expenses.  See Item 7.  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operation.

      Occasionally,  distributions may include funds derived from the release of
cash  from  operating  or  debt  services  reserves.  Further,  the  Declaration
authorizes  distributions to be made from cash flows rather than income, or from
cash  reserves  in  some  instances.  Amounts  of  distributions  in  excess  of
accounting income may be considered to be capital in nature. Investors should be
aware that the Fund is organized to return net cash flow rather than  accounting
income to Investors.

Item 6. Selected Financial Data.

      The  following  data is taken  from  the  financial  statements  presented
elsewhere in this Annual Report on Form 10-K. See Item 8.  Financial  Statements
and Supplementary Data.

<TABLE>
<CAPTION>
                                               As of and for the Years Ended December 31,
                                ------------------------------------------------------------------------
                                    2004           2003           2002           2001           2000
                                ------------   ------------   ------------   ------------   ------------
<S>                             <C>            <C>            <C>            <C>            <C>
Revenue (I)                     $ 10,584,979   $ 10,244,684   $  5,830,356   $  4,237,676   $  2,180,231
Net income (loss)(II)                645,138     (3,790,043)    (3,331,373)    (3,037,411)    (1,909,206)
Net assets
   (shareholders'
   equity) (III)                  25,251,013     27,713,091     36,315,970     39,313,776     46,091,190
Investments in
   property, plant
   and equipment (net
   of depreciation) (IV)          20,677,168     22,601,401     32,991,661     25,961,010     21,321,104
Total assets  (I) (V)             49,304,484     57,871,936     67,117,202     48,835,302     53,174,689
Long term debt (less current
  portion) (VI)                    3,558,451      4,722,403      8,002,169             --             --
</TABLE>

                                       12

<PAGE>

      (I)   Increase  in  revenue in 2003,  investment  in  property,  plant and
            equipment and total assets in 2002 due to acquisition of US Hydro in
            November  2002,  as  discussed  in  Note 3 to the  Fund's  Notes  to
            Consolidated Financial Statements.

      (II)  Increase in net income in 2004 due to gain on sale and  distribution
            of ZAP  securities  and also due to decrease in  write-down of Power
            Sales  Contracts.  Increase in net loss in 2001 due to  write-off of
            investment in ZAP  securities,  as discussed in Note 3 to the Fund's
            Notes to Consolidated Financial Statements.

      (III) Decrease in  shareholders'  equity in 2003 due to unrealized loss on
            foreign currency related to Egypt investment.

      (IV)  Decrease in investment in property,  plant and equipment in 2003 due
            to  write-down of Power Sales  Contracts,  as discussed in Note 2 to
            the Fund's Notes to Consolidated Financial Statements.

      (V)   Decrease in total assets from 2004 to 2003 primarily due to decrease
            in notes  receivable  resulting from payment of notes  receivable by
            TCID,  deferred income tax, and electric power sales contract due to
            write-down of assets in power generation projects.

      (VI)  Increase in long-term debt in 2002 due to  introduction of term loan
            for  Ridgewood  Near East and US Hydro.  Decrease  in 2003 is due to
            decrease in Egypt pound currency denominated obligation.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Introduction

      The following  discussion and analysis should be read in conjunction  with
the Fund's financial  statements and the notes thereto presented below. See Item
8.  Financial   Statements  and  Supplementary  Data.  Dollar  amounts  in  this
discussion are generally rounded to the nearest $1,000.

      In 2002,  the Fund  completed  its  acquisition  of the Ridgewood US Hydro
Projects and as a result, the Fund has consolidated the financial  statements of
the US Hydro Projects effective November 23, 2002.

      Through  December 31, 1999,  the Fund used the equity method of accounting
for its  investment  in the Egypt  Projects.  Beginning in the first  quarter of
2000, the Fund made additional  investments and acquired  majority  ownership of
certain Egypt  Projects.  As a result,  effective  January 1, 2000, the Fund has
consolidated  the financial  statements of certain Egypt Projects.  In the first
quarter of 2002, the balance of the Egypt Projects were consolidated as a result
of acquisition.

Outlook

      The adoption of the Renewable  Portfolio  Standards ("RPS") legislation in
various  states is  indicative of the  significant  activity and movement in the
industry, as well as at state and federal government,  to increase the amount of
renewable  power that is supplied to utilities  that serve end-use  customers in
such states.  For example,  in  Massachusetts,  legislation and regulations have
been passed  requiring such retail electric  suppliers to have in their electric
portfolio  one  (1%)  from  "new  renewable  power"  for  2003.  This  renewable
generation  percentage  requirement  increases  each year  until  the  renewable
generation amount equals four (4%) percent. New Jersey,  Nevada,  California and
Connecticut have passed similar RPS legislation.

      Notwithstanding  the  development  of a  renewable  energy  market in many
states,  the general  trends in the electric  power  industry have  continued to
reflect an attitude  of caution and  restraint.  Throughout  the United  States,
memories of the California energy crises, Enron Corp.'s bankruptcy,  proceedings
before  the FERC  regarding  certain  questionable  practices  of  other  energy
producers and  marketers,  as well as the US and world economy and the Iraq War,
have  led many to call  for a more  regulated  electric  industry,  with  strict
reporting   requirements  and  cost  of  service   regulation.   However,   many
legislators, regulators and market participants have not disavowed deregulation.

      The Projects owned by the Funds' UK  operations,  which are not subject to
the  PowerBank   arrangements,   operate  under  long-term  contracts  with  the
Non-Fossil Fuels Purchasing Agency, a  quasi-governmental  agency.  They enjoy a
guaranteed  price and  market  for their  output  and are not  subject  to price
fluctuations  for their  fuel.  The UK Projects  are  relatively  unaffected  by
developments  in the United  Kingdom  electricity  markets,  which  included the
introduction in 2001 of

                                       13

<PAGE>

the New Electricity Trading Arrangements ("NETA"). NETA replaced the electricity
pool with a competitive wholesale energy market. While NETA has not impacted the
income  stream  for the UK  Projects,  the  attendant  disruption  has  caused a
realignment  and  consolidation  within the UK utility  industry.  The  industry
regulator,  Office  of  Gas &  Electricity  Markets  ("OFGEM"),  monitors  these
developments on a continuous basis.

      The Egyptian  Projects are  developed at remote  resort hotel sites on the
Red Sea, which are distant from other  electric and water sources.  As a result,
REFI is  relatively  unaffected  by  trends  in the  Egyptian  water  and  power
industry,  which is concentrated  along the Nile River and Mediterranean  Coast.
Prices for power and water delivered to the Egyptian  Projects hotels in certain
instances are based on contracted rates. Some arrangements are short-term and in
other cases,  hotels may attempt to renegotiate the terms of their arrangements.
The market price for water not under contract varies  depending on many factors,
including fuel cost,  availability of other sources of supply  (primarily  other
desalination  plants or the Nile River),  demand (which is heavily  dependant on
temperature)  and   availability  of   transportation   (primarily   trucks  and
pipelines).

      In  connection  with the  acquisition  of US Hydro,  the Fund and Power V,
through  a  joint  venture,  purchased  a note  receivable  from  US  Hydro  for
approximately $17 million. At the time, the joint venture intended to acquire US
Hydro's nine  hydroelectric  plants by forgiving the then  outstanding  debt and
$0.8  million  of  accrued  interest,  paying an  additional  $1  million to the
shareholders  of US Hydro,  and paying up to an  additional  $1.7  million of US
Hydro tax related but  contingent  tax  liabilities  that might be incurred as a
result of a tax  strategy.  The then  president  of US Hydro  agreed to vote the
stock of US Hydro  beneficially  owned by him  (approximately  69% of the voting
stock) in favor of a merger or other  corporate  reorganization  as specified by
the Fund and  Power V that  materially  complied  with the  provisions  outlined
above.  After  further  negotiations,  however,  on November 22,  2002,  through
another  joint  venture  owned in the same  proportion as the joint venture that
acquired  the  debt of US  Hydro,  the  Fund and  Power V  acquired  100% of the
outstanding stock of US Hydro through structured tax reorganization.  As part of
the tax structured reorganization,  the former shareholders of US Hydro received
100% of the  outstanding  shares of a  subsidiary  of US Hydro in  exchange  for
selling  the stock of US Hydro to the Trust  and the  Growth  Fund for a nominal
amount.

      Additional trends affecting the independent  power industry  generally are
described in Item 1. Business.

Significant Accounting Policies

      The Fund's plant and equipment is recorded at cost and is depreciated over
its estimated  useful life.  The estimated  useful lives of the Fund's plant and
equipment  range from 3 to 20 years.  A  significant  decrease in the  estimated
useful life of a material  amount of plant and  equipment  could have a material
adverse  impact  on the  Fund's  operating  results  in the  period in which the
estimate is revised and in subsequent periods. The Fund evaluates the impairment
of its  long-lived  assets based on projections  of  undiscounted  cash flows at
least  annually or when  events or changes in  circumstances  indicate  that the
carrying amounts of such assets may not be recoverable. Estimates of future cash
flows used to test the recoverability of specific long-lived assets are based on
expected  cash flows from the use and  eventual  disposition  of the  assets.  A
significant reduction in estimated future cash flows may have a material adverse
impact on the Fund's operating results and financial condition.

      Power  generation  and water revenue is recorded in the month of delivery,
based on the  estimated  volumes sold to customers  at rates  stipulated  in the
power  sales  contract  and  for  water  output  at  prevailing   market  rates.
Adjustments  are made to  reflect  actual  volumes  delivered  when  the  actual
information  subsequently  becomes  available.  Billings to customers  for power
generation generally occurs during the month following delivery.  Final billings
do not vary significantly from estimates.

      Accounts  receivable are carried at original invoice amount less allowance
made for  uncollectibility of these receivables.  Allowance for uncollectibility
of accounts  receivable is established when there is objective evidence that the
Fund will not be able to collect all amounts due according to the original terms
of receivables.  The amount of allowance is the difference  between the carrying
amount and the recoverable amount, being the expected cash flows. When material,
expected  cash flows are  discounted  at the market rate of interest for similar
borrowers.

Results of Operations

The year ended December 31, 2004 compared to the year ended December 31, 2003

      Revenues  increased by  $340,000,  or 3.3%,  to  $10,585,000  in 2004,  as
compared to $10,245,000 in 2003.  Revenues from the Egyptian Projects  increased
by approximately  $1,089,000  primarily due to increase in water  desalinization
operations  resulting  from pickup in tourism in 2004, as compared to a drop-off
in 2003 as a result of the war in Iraq. The US Hydro Projects' revenues declined
$749,000  in  2004  due  to  lower  output   resulting  from   lower  levels  of
precipitation.

      Cost of revenues for 2004 was  $8,002,000,  as compared to $7,142,000  for
2003, an increase of $860,000,  or 12%. The cost of revenues for Egypt  Projects
increased by approximately $900,000 primarily due to increase in fuel and direct

                                       14

<PAGE>

materials resulting from increase in 2004 operations. The US Hydro projects cost
of revenues for 2004 was comparable to 2003.

      Gross Profit  decreased by $519,000 or 16.7%,  to $2,583,000 in 2004, from
$3,102,000  in  2003.  The  decrease  is  mainly  attributable  to the US  Hydro
Projects,  which  experienced  lower revenues in 2004, as noted above;  US Hydro
provided a gross  profit of  $2,129,000  as compared to  $2,686,000  in 2003,  a
decrease of  $557,000.  Gross  Profit  from the  Egyptian  water  desalinization
operations  was  $1,265,000,  an increase of $378,000  compared to 2003, in line
with revenue growth.  Gross Profit from the Egyptian power operations  decreased
$340,000 from 2003, a result of experiencing higher costs on lower revenues,  as
discussed above.

      General  and  administrative  expenses  increased  $257,000  or  7.8%,  to
$3,045,000  in 2004 from  $3,302,000  in 2003.  The increase is primarily due to
higher  administrative  costs at the Egypt  Projects,  which  included  $870,000
write-off of funds advanced to develop a new venture in Dubai  partially  offset
by reversal of provision for local Egyptian sales and stamp taxes.

      The management fee of $823,000 was comparable to 2003.

      In 2004, the Fund recorded a gain of assets in power  generation  projects
in the amount of $565,000 compared to a write-down of power generation  projects
of  $2,495,000  in 2003.  The 2004 gain  includes an  impairment  write-down  of
$1,077,000  to  an  electric  power  sales  contract  in  2004,  reflecting  the
termination  of a US Hydro unit's power  purchase  agreement  with a New England
utility. This is partially offset by a gain of $1,642,000,  which represents the
present value of future payments due from the utility as a compensation  for the
lost  revenues  on the  terminated  contract.  In  2003,  the  Fund  recorded  a
write-down of $527,000 for certain assets acquired in the Sinai  acquisition and
an impairment of power sales  contract for  $1,902,000 due to decrease in future
cash flow of certain  US Hydro  Projects  resulting  from the sale of the Fund's
interest in the  Lahontan  notes and the  exercise of certain  rights of the off
take party on various power agreements and the  restructuring of power agreement
at the Blackstone Project.

      In 2004,  the Fund  recorded  a  goodwill  impairment  charge of  $661,000
compared  to  $556,000  in  2003.  Goodwill,  resulting  from the  deferred  tax
liability  associated  with the  acquisition  of US Hydro,  was not supported by
discounted  future  cash flow of the  underlying  projects  to the extent of the
impairment.

      Provision  for bad  debts  decreased  $494,000  to  $42,000  in 2004  from
$536,000 in 2003. The provision  recorded for bad debts is  attributable  to the
Egyptian operations.

      The Fund's loss from operations  decreased by $3,187,000,  from $4,610,000
in 2003 to $1,423,000 in 2004. The decrease  primarily  reflects the decrease in
the  write-down of power sales  contracts (see above),  partially  offset by the
increase in cost of revenues.

      Interest income was $20,000 in 2004, a reduction of $38,000 from the prior
year, reflecting the sale of the US Hydro note receivable in early 2004.

      Interest expense  decreased  $171,000 to $690,000 in 2004 from $861,000 in
2003.  The decrease is primarily  due to the paydown of debt assumed in the U.S.
Hydro  acquisition  and of the  outstanding  borrowings  under the  credit  line
executed by the Egypt projects in the third quarter of 2002.

      In 2004,  the Fund recorded an equity loss of $552,000 from its investment
in the UK Projects, compared to an equity loss of $627,000 in 2003. The decrease
in equity loss is a result of the UK Projects  experiencing  increased  revenues
driven by increased capacity.

      The Fund  recorded a gain on the sale of equipment of $6,000 in 2004 and a
loss of $499,000 in 2003,  as a result of the sale of certain  equipment  by the
Egyptian operations.

      In 2004,  the  Fund  recorded  a gain on  distributions  and  sales of ZAP
securities for $2,419,000.  This is due to a gain of $340,000 resulting from the
sale of ZAP shares  and a gain of  $2,079,000  resulting  from  distribution  of
772,500 ZAP shares to the Fund's investor shareholders.

      In  2004,  the  Fund  recorded  a net  gain on sale  of US  Hydro  note of
$175,000.  The  gain  represents  $200,000  on the  sale  of the  Lahontan  note
receivable  held by the U.S. Hydro Projects,  partially  offset by legal fees of
$25,000  incurred  on the sale of the note.  The notes  receivable  were paid by
TCID,  the  proceeds of which were applied  directly  towards a reduction of the
term loan of $3,800,000.

                                       15

<PAGE>

      Other income decreased by $182,000 from other income of $93,000 in 2003 to
other expense of $90,000 in 2004.  Other expenses in 2004,  represents  Egyptian
foreign  exchange  loss  resulting  from  purchase  of  equipment  from  various
international  third parties  compared to gain on foreign exchange of $93,000 in
2003.

      In 2004,  the Fund recorded an income tax benefit of $628,000 on behalf of
the US Hydro  Projects  compared to $1,054,000 in 2003. The decrease in the 2004
income  tax  benefit  is  primarily  attributable  to the  net  decrease  in the
temporary  difference  in the book to tax  basis of the US Hydro  Projects.  The
Fund's Egyptian  subsidiaries have a ten year income tax holiday that expires in
2010.  Accordingly,  no provision has been made for Egyptian income taxes in the
years presented.

      Minority interest in the loss of subsidiary decreased by $1,332,000,  from
$1,484,000  in 2003 to $152,000 in 2004.  The decrease is  primarily  due to the
decrease in the  impairment of  intangibles  and the increase in the gain on the
sale of investment in ZAP securities.  In addition,  the decrease is also due to
the Fund's  obligation  to fund the Sinai losses as the  minority  shareholder's
share of accumulated losses exceeded the minority shareholder's equity in Sinai.
Accordingly,  the minority shareholder's equity has been reduced to zero and the
reporting of Sinai's losses is fully absorbed by the Fund.

      The Fund's net income increased by $4,435,000 from a loss of $3,790,000 in
2003 to income of $645,000 in 2004.  The increase in net income is primarily due
to  decrease  in  loss  from  operations  of  $3,187,000,  increase  in  gain of
$2,301,000 on sale and  distribution  of ZAP securities (see above) and decrease
in loss from sale of property,  plant and equipment of $505,000 partially offset
by decrease in minority interest in loss of subsidiary of $1,332,000.

The year ended December 31, 2003 compared to the year ended December 31, 2002

      Revenues  increased by  $4,415,000,  or 76%, to  $10,245,000  in 2003,  as
compared to  $5,830,000  in 2002.  The  acquisition  of the  Ridgewood  US Hydro
Projects in the fourth  quarter of 2002  provided  the current year results with
additional  revenues of  $5,473,000.  Revenues  from the Egyptian  operations in
local currency were comparable to 2002. Due to the decrease in the exchange rate
of the Egyptian pound in 2003, revenues from the Egyptian  operations  decreased
$1,059,000.

      Cost of revenues  increased by $1,739,000,  or 32%, to $7,142,000 in 2003,
from  $5,403,000 in 2002.  This is primarily due to the increase in depreciation
and amortization expense related to US Hydro Projects acquired in November 2002.
In addition,  as a result of review of impairment  and change in  circumstances,
certain US Hydro Projects lives have been adjusted.

      Gross Profit  increased by $2,675,000 to $3,102,000 in 2003, from $427,000
in 2002.  The  increase is due to the  consolidation  of the  Ridgewood US Hydro
Projects for the full year in 2003. The Ridgewood US Hydro  Projects  provided a
gross profit of $2,686,000 in 2003, an increase of $2,526,000. Gross Profit from
the Egyptian  operations  was $416,000,  an increase of  approximately  $149,000
compared to 2002.  The increase in gross profit from the Egyptian  operations is
primarily attributed to the improved efficiency of the Sinai operations.

      General  and  administrative  expenses  increased  $1,272,000  or 63%,  to
$3,302,000 in 2003 from $2,030,000 in 2002. The increase is primarily due to the
consolidation  of the Ridgewood US Hydro  Projects in November 2002 and also due
to the  settlement  of a breach  of  contract  claim  resulting  in a charge  of
$551,000, which represents the present value of the future discounted payments.

      The management fee of $823,000 in 2003 was comparable to 2002.

      Write-down of power  generation  projects  increased by  $2,197,000,  from
$298,000  in 2002 to  $2,495,000  in 2003.  The  increase  is  primarily  due to
write-down of $527,000 for certain assets acquired in the Sinai  acquisition and
also due to the  impairment of power sales contract of $1,902,000 as a result of
a decrease in future cash flow of certain US Hydro  Projects  resulting from the
exercise of certain rights of the off take party on various power agreements and
the  restructuring  of power agreement at the Blackstone  Project.  In 2002, the
Fund  recorded a  write-down  of $298,000  for certain of its on-site  plants in
Egypt that were shut down or sold.

      In 2003,  the Fund  recorded  a  goodwill  impairment  charge of  $556,000
compared to $0 in 2002.  Goodwill,  resulting  from the deferred  tax  liability
associated  with the  acquisition  of US Hydro,  was not supported by discounted
future cash flow of the underlying projects to the extent of the impairment.

      Provision  for bad  debts  increased  $398,000  to  $536,000  in 2003 from
$138,000 in 2002. The provision  recorded for bad debts is  attributable  to the
Egyptian operations.

      The Fund's  loss from  operations  increased  by  $1,749,000,  or 61%,  to
$4,610,000 in 2003 from  $2,861,000  in 2002.  The increase in loss reflects the
increase in the write-down of power generation projects,  impairment of goodwill
and general and  administrative  expenses,  partially  offset by the increase in
gross profit.

                                       16

<PAGE>

      Interest  income of  $58,000  in 2003 was  comparable  to the prior  year.
Interest expense  decreased  $127,000 to $861,000 in 2003 from $988,000 in 2002.
The decrease is the result of the lower outstanding debt balances.

      In 2003,  the Fund recorded an equity loss of $627,000 from its investment
in the UK Projects, compared to an equity loss of $845,000 in 2002. The decrease
in equity loss is due to the increase in revenue  resulting from the increase in
the UK Projects operating  capacity,  in addition to the decrease in maintenance
costs.

      The Fund  recorded a loss on sale of  equipment  of  $499,000 in 2003 as a
result of the sale of certain equipment by the Egyptian operations.

      Other income decreased  $59,000,  or 39%, from $152,000 in 2002 to $93,000
in 2003 due to a decrease in Egyptian  foreign  exchange  gains  resulting  from
purchase of equipment from various international parties.

      The increase on gain on sale of investment in ZAP securities  reflects the
118,000  shares sold at $1.00 per share and the full  proceeds was recorded as a
gain. The Fund had written-off the investment in ZAP securities in 2001.

      In 2003,  the Fund  incurred an income tax benefit of $1,054,000 on behalf
of the Ridgewood US Hydro Projects  compared to income tax expense of $13,000 in
2002. The increase in the 2003 income tax benefit is primarily  attributable  to
the decrease in deferred tax liabilities relating to the US Hydro Projects.  The
Fund's Egyptian  subsidiaries have a ten year income tax holiday that expires in
2010.  Accordingly,  no provision has been made for Egyptian income taxes in the
years presented.

      Minority interest in the loss of subsidiary  increased by $283,000 or 24%,
from $1,201,000 in 2002 to $1,484,000 in 2003. The increase is due to the Fund's
impairment of goodwill and long-lived  assets,  partially offset by the increase
in income tax  benefit.  In  addition,  the  increase  is also due to the Fund's
obligation  to fund the Sinai  losses  as the  minority  shareholder's  share of
accumulated losses exceeded the minority  shareholder's equity in Sinai in 2003.
Accordingly,  the minority  shareholder's equity in Sinai is reduced to zero and
the reporting of Sinai's losses is fully absorbed by the Fund.

      The Fund's net loss increased $459,000 or 14% from a loss of $3,331,000 in
2002 to $3,790,000 in 2003,  primarily  reflecting the increase in the loss from
operations offset by increase in income tax benefit.

Interim Periods

      The net income  increased in second  quarter of 2004 primarily due to gain
on ZAP securities of $1,574,000.

      In third  quarter of 2004,  gross profit  decreased  primarily  due to the
decrease  in revenue by  $594,000  compared  to the second  quarter of 2004.  In
addition,  the net  income  decreased  in the third  quarter  of 2004  primarily
attributable  to the decrease in gain on ZAP securities  from  $1,574,000 in the
second quarter of 2004 to $706,000 in the third quarter of 2004.

In the fourth  quarter of 2004, the Fund recorded an expense of $870,000 for the
write-down  of advances to develop a new venture in Dubai.  The  write-down  was
recorded upon management's  decision that the Fund would discontinue its efforts
to develop operations in Dubai. In addition,  during the fourth quarter of 2004,
the Fund also  recorded an  impairment  of goodwill of $661,000 as the  goodwill
resulting from the deferred tax liability  associated with the acquisition of US
Hydro,  was not  supported  by  discounted  future  cash flow of the  underlying
projects to the extent of  impairment.  This is partially  offset by increase in
gain on  distribution  and sale of ZAP securities of $139,000  during the fourth
quarter of 2004 and a net gain of $564,713, reflecting an impairment to electric
power sales  contracts of  $1,077,296 to  write-down  the carrying  value of the
pre-existing  power purchase  agreement to zero less $1,642,009 to recognize the
present value of payments to be received beginning 2005.

      Increase  in  loss  from  operations  in the  fourth  quarter  of  2003 is
primarily  due to the  write-down of $527,000 as a result of an appraisal of the
equipment acquired in the Sinai acquisition.  During the fourth quarter of 2003,
the Fund also  recorded an  impairment  of goodwill of $556,000 as the  goodwill
resulting from the deferred tax liability  associated with the acquisition of US
Hydro,  was not  supported  by  discounted  future  cash flow of the  underlying
projects to the extent of impairment.  In addition, the Fund recorded impairment
of long-lived  assets of $1,902,000 due to decrease in future  undiscounted cash
flow for certain US Hydro Projects resulting from the exercise of certain rights
of the off take party on various power agreements and the restructuring of power
agreement at the Blackstone Project.

      As a result of the change in the estimated life of certain  electric power
sales  contracts,  the Fund  recorded an  additional  $630,000  of  amortization
expense  in the  fourth  quarter  of 2003.  The Fund also  recorded  a  $288,000
provision  for bad debt

                                       17

<PAGE>

from its Egyptian  operations in the fourth quarter of 2003.  This was partially
offset by an  increase in income tax  benefit of  $1,146,000  due to decrease in
deferred tax liability of certain US Hydro Projects.

Liquidity and Capital Resources

      At December 31, 2004, the Fund had cash and cash  equivalents of $769,000,
a decrease of $33,000 as compared to December 31,  2003.  The cash flows for the
year 2004 were $2,439,000 provided by operating activities,  $2,995,000 provided
by investing activities, $5,472,000 used in financing activities and $6,000 gain
to the effect of the exchange rate on cash and cash equivalents.

      In 2004 the  Fund's  operating  activities  generated  cash of  $2,439,000
compared to $2132,000 in 2003, a increase of $307,000  primarily due to increase
in revenue.

      In 2004,  investing  activities provided $2,994,000 compared to $1,285,000
in 2003, an increase of $1,709,000.  The increase is primarily due to $3,975,000
proceeds from the sale of the US Hydro note  receivable and $1,404,000  proceeds
from sale of ZAP securities.  This is partially offset by additional  investment
of $2,814,000 in ZAP securities and $870,000 of advances to Ridgewood Dubai.

      In 2004,  the Fund used  $5,472,000  of cash in  financing  activities,  a
result of $4,892,000  (including $4,000,000 of proceeds received from sale of US
Hydro  note)  used  toward  bank  loan   repayments  and   $1,330,000   used  in
distributions  to  shareholders.  In 2003,  the Fund used  $3,308,000 of cash in
financing  activities,  primarily  the result of  $1,978,000  used to repay bank
loans and $1,330,000 used in distributions to shareholders.

      The Fund expects that its cash flows from operations and cash on hand will
be sufficient to fund its  obligations  and any declared  distributions  through
January 31, 2007. The Fund has  historically  financed its operations  from cash
generated  from  its  subsidiaries'  operations.  Obligations  of the  Fund  are
generally  limited to payment of debt to third parties and management fee to the
Managing Shareholder as well as payments for certain administrative,  accounting
and legal  services  to third  parties.  Accordingly,  the Fund has not found it
necessary to retain a material amount of working capital.

      On June 26, 2003,  the Managing  Shareholder  of the Fund,  entered into a
$5,000,000  Revolving Credit and Security Agreement with Wachovia Bank, National
Association.  The agreement allows the Managing  Shareholder to obtain loans and
letters of credit for the  benefit of the trusts and funds that it  manages.  As
part of the  agreement,  the Fund agreed to  limitations on its ability to incur
indebtedness,  liens and provide guarantees.  On February 20, 2004, the Managing
Shareholder  and Wachovia  Bank amended the agreement  increasing  the amount to
$6,000,000.  During 2005,  Wachovia  Bank agreed to further  extend the Managing
Shareholder's Line of credit through September 30, 2006.

      The following schedule represents the Fund's total contractual obligations
as of December 31, 2004:

<TABLE>
<CAPTION>
                                    2005         2006        2007       2008         2009     Thereafter     Total
                                  ---------   ---------   ---------   ---------   ---------   ----------   ---------
<S>                               <C>         <C>         <C>         <C>         <C>         <C>          <C>
Contractual Obligations:
Long-term debt
     Sinai                        $ 195,824   $ 233,741   $ 234,306   $ 324,300   $ 424,630   $  839,633   2,252,433
     REFI                           509,613     509,613     127,403           -           -            -   1,146,629
     US Hydro                       472,451     432,413     432,413           -           -            -   1,337,277
Minimum lease payment               685,000     695,000     700,000     710,000     720,500    5,495,977   9,006,477
Consulting agreement settlement      40,422      44,655      49,331      54,497      60,203      264,861     513,969
</TABLE>

      During the third quarter of 2002, REFI executed a term loan agreement with
its  principal  bank.  The bank provided a loan of  12,500,000  Egyptian  pounds
(approximately  US  $2,022,000),  which will mature on March 31, 2007.  The loan
will  be  repaid  in  quarterly   installments   of  781,250   Egyptian   pounds
(approximately  US $126,000)  starting June 2003.  Outstanding  borrowings  bear
interest at the bank's  medium  term loan rate plus 0.5% (12.5% at December  31,
2004 and 2003).

      Sinai has outstanding  loans and interest  payable of 13,812,146  Egyptian
pounds  (approximately  US  $2,252,433).  The loan bears  interest  at 11.0% per
annum.  The provision of the loan restricts  Sinai from paying  dividends to its
shareholders  or  obtaining  credit  from other  banks.  As the loan has been in
default since 1999,  Sinai Company entered into a new agreement in April 2005 in
order to resolve all issues,  cure the default,  and reschedule the  installment
payments of the debt.  At December 31, 2005,  Sinai was in  compliance  with the
terms of the modified loan.

                                       18

<PAGE>

      Five of the US Hydro Project's hydro-electric power plants are financed by
a term loan.  The Fund has a choice of variable or fixed  interest  rates on the
term loan.  Variable  rates are LIBOR  (2.38% and 1.16% at December 31, 2004 and
2003,  respectively)  plus 1 3/4%, or the Lenders Corporate Base Rate plus 1/2%.
At the Fund's  option,  a fixed  interest  rate can be selected,  payable on any
portion of the debt in excess of $1,000,000,  for any period of time from two to
seven years.  Such fixed rate shall be based on the US Treasury note rate at the
date of  election  plus 2 3/4%.  The  variable  rate of 4.13% and 2.91% were the
effective interest rates at December 31, 2004 and 2003,  respectively.  Although
the Fund is current in its interest and principal payments, it is technically in
default  under the  covenants of the term loan as a result of not  providing its
lender a copy of its current audited financial  statements.  As per the terms of
the term loan agreement,  the default does not allow the lender to accelerate or
call the loan.

      This credit facility is  collateralized by five  hydroelectric  plants and
the notes receivable owned by the US Hydro Projects. As additional  compensation
to the lender,  the Fund is required to pay to the lender an  additional  amount
equal to 10% of the cash flow, as defined,  of the financed projects plus 10% of
any net  proceeds,  as  defined,  from  the  sale or  refinancing  of any of the
financed projects.  No additional  interest payments were required for the years
ended December 31, 2004 and 2003.

      Scheduled  principal  repayments of the Fund's  long-term debt, as revised
for the Sinai loan modification, are as follows:

                      Sinai         REFI         US Hydro       Total
            2005   $   195,824   $   509,613   $   472,451   $ 1,177,888
            2006       233,741       509,613       432,413     1,175,766
            2007       234,306       127,403       432,413       794,121
            2008       324,300             -             -       324,300
            2009       424,630             -             -       424,630
      Thereafter       839,633             -             -       839,633
                   -----------------------------------------------------
           Total   $ 2,252,433   $ 1,146,629   $ 1,337,277   $ 4,736,339

      The UK Projects have  collateralized  long-term debt,  without recourse to
the Fund, with scheduled principal payments as follows:

       Year Ended     Scheduled
      December 31,     Payment
      ------------   ------------

      2005           $  1,892,775
      2006              2,103,156
      2007              2,261,900
      2008              2,294,536
      2009              2,480,536
      Thereafter       11,924,984
                     ------------
      Total          $ 22,957,887
                     ============

      The  long-term  debt is repayable in semi annual  installments  each March
31st  and  September  30th  through  September  30,  2014.   $9,419,280  of  the
outstanding  debt bears interest at 7.08%,  while  $9,264,397 of the outstanding
debt bears interest at 7.73% and  $4,274,210  bears interest at LIBOR plus 1.31%
(5.93% at December 31, 2004). The notes are  collateralized by substantially all
of the assets of the  projects  and the credit  agreement  requires  that a debt
service coverage ratio of 1.3 to 1 (as defined) be maintained as well as certain
other ratios. At December 31, 2005, the UK Projects outstanding debt was current
and in good standing with its bank.

      The UK Projects has substantially reduced its interest rate variability to
the bank loan by entering into near term forward  notional swap  agreements with
its bank.  Each year the UK Projects can reset and fix the  interest  rate it is
charged on the long term  portion of its bank loan or be charged the UK Projects
prevailing available interest rate,  approximately LIBOR plus 1.4%. On March 31,
2005,  the UK Projects reset the interest rate to 5.88% on the long term portion
with the fixed rate expiring on March 31, 2006.

      The UK Projects have certain long-term agreements that require delivery of
unspecified  volumes of energy at fixed prices.  The  long-term  contract is not
guaranteed by the Fund. The Egypt Projects  generally sell their electricity and
water output at prevailing market rates.

                                       19

<PAGE>

      Commencing in 2002,  Ridgewood UK began to develop and construct expansion
of certain existing facilities in order to take advantage of the RO programs. As
Ridgewood UK required  financing to maintain  its  expansion,  it was decided to
raise the necessary  financing from  affiliates.  Accordingly,  Ridgewood  Power
formed Ridgewood  Renewable  PowerBank LLC ("PB I") and began offering shares in
the fourth quarter of 2002.  During the second quarter of 2003,  Ridgewood Power
formed Ridgewood  Renewable  PowerBank II LLC ("PB II"); in the third quarter of
2003,  Ridgewood Power formed Ridgewood  Renewable  PowerBank III LLC ("PB III")
and during the third quarter of 2004, Ridgewood Power formed Ridgewood Renewable
PowerBank IV LLC ("PB IV").  Shortly after the formation of PBI, PBII, PBIII and
PBIV (collectively,  the "PowerBank Funds"), all affiliates of Ridgewood UK, the
offering period began for each respective PowerBank Fund. The proceeds raised by
PowerBank Funds,  less the offering costs incurred by the PowerBank Funds,  were
initially provided to Ridgewood UK in the form of construction advances.

      As of December 31, 2004,  Ridgewood UK received  construction  advances of
$53,770,169 from the PowerBank Funds with the expectation to develop 29 projects
with an  operating  capacity  of 37.6  MW.  The  following  table  reflects  the
construction  advances and  anticipated  development  per  PowerBank  Fund as of
December 31, 2005.

               Offering         Net Funds       Anticipated     Anticipated
                Period        Available For   No. of Projects     Capacity
     Fund   Ended (Closed)   Construction *   to be Developed       (MW)
    -----------------------------------------------------------------------
      PBI      Apr 2003      $    9,478,645          5                7
     PBII      Jun 2003          16,227,833         10             11.6
    PBIII      Mar 2004          18,880,696         11               13
     PBIV      Nov 2004           9,182,995          3                6
    -----------------------------------------------------------------------
    Total                    $   53,770,169         29             37.6
    -----------------------------------------------------------------------
      * In original $US, not impacted by currency translation

      During the construction  phase,  Ridgewood UK will pay construction period
interest at a rate of 10% on the  construction  period advances to the PowerBank
Funds  for  each  respective  project.   Upon  completion  of  construction  and
commencement of operations of a project  ("commissioning"),  construction period
interest charges will cease,  each respective  facility site will be sold to the
respective PowerBank Fund at a predetermined price  ((pound)850,000 per MW), and
said  project  will be leased back to  Ridgewood UK subject to a 10 year minimum
lease  pursuant to sale-lease  back  agreements.  Accordingly,  the  outstanding
construction advances will convert to capital leases, determined on a project by
project basis. The minimum term of the respective capital leases will run for 10
years  and are  payable  in  quarterly  installments  at a rate  of 12%  with no
guaranteed  residuals.  At December 31, 2004, capital lease obligation principal
are as follows:

      Year Ended
      December 31,           Repayment
      ------------         ------------
      2005                 $  1,829,552
      2006                    1,976,045
      2007                    2,175,496
      2008                    2,429,685
      2009                    2,740,147
      Thereafter             14,332,141
                           ------------
      Total                $ 25,483,070
                           ============

      Two of the US Hydro Projects  hydroelectric plants have leased the site at
its facility under a long term lease which  terminates in 2024. Rent expense for
the years ended  December  31,  2004,  2003 and the period  November 23, 2002 to
December 31, 2002 was $794,720, $794,720 and $12,083, respectively.

Minimum lease payments are as follows:

      2005                           $   685,000
      2006                               695,000
      2007                               700,000
      2008                               710,000
      2009                               720,500
      Thereafter                       5,495,977
                                     -----------
      Total Minimum Lease Payments   $ 9,006,477
                                     ===========

                                       20

<PAGE>

      The Fund has certain other leases that require  contingent  payments based
upon a percentage  of annual gross revenue of the  hydroelectric  plant less any
taxes or other fees paid to the lessors. There are no minimum rents required and
these  commitments are not included in the amounts presented above. Rent expense
for these  hydroelectric  plants for the years ended December 31, 2004, 2003 and
the period  November 23, 2002 to December 31, 2002 was $6,045,  $6,982 and $451,
respectively.

      In February  2003, a complaint was filed against  Ridgewood Near East by a
corporation  claiming breach of contract.  In November 2003, the parties reached
an agreement whereby Ridgewood Near East paid the corporation a one-time payment
of $280,750,  representing  commissions  and  penalties,  and agreed to continue
making required  commission  payments as per the original  agreement of $900,000
payable in monthly  installments  of $7,500.  The Fund recorded the liability in
2003 by  discounting  the future  payments at the rate of 10% resulting in total
liability of $513,969 as of December 31, 2004.

      Schedule of future discounted principal payments are as follows:

                      Year Ended
                      December 31,                Payment
                      ------------              -----------
                          2005                  $    40,422
                          2006                       44,655
                          2007                       49,331
                          2008                       54,497
                          2009                       60,203
                          Thereafter                264,861
                                                -----------
                          Total                 $   513,969
                                                ===========

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

   Qualitative Information About Market Risk.

      The Fund's investments in financial instruments are short-term investments
of working capital or excess cash. These  short-term  investments are limited by
its  Declaration  of Fund to invest  in  United  States  government  and  agency
securities  or to  obligations  of banks  having at least $5  billion in assets.
Since the Fund invests only in short-term  instruments for cash management,  its
exposure to interest rate changes is low. The Fund has limited exposure to trade
accounts  receivable and believes that their carrying  amounts  approximate fair
value.

      The  Fund's  consolidated  Egyptian  Projects'  investments  in  financial
instruments  are  short-term  pound  denominated  obligations of large banks and
trade accounts receivable and payable.

      The Fund's  primary  market risk exposure is limited to interest rate risk
caused by fluctuations in short-term  interest rates.  The Fund's primary market
risk exposure related to its consolidated  Egyptian  Projects is to fluctuations
in the foreign  currency  exchange rates and the secondary  market risk exposure
relates to UK Projects.  The Fund does not anticipate any changes in its primary
market risk  exposure or how it intends to manage it. The Fund does not trade in
market risk sensitive instruments.

      The Fund's 2004 long-term debt includes  approximately  79.7% of debt on a
fixed  rate and 20.3% on  variable  rate.  This is  consistent  with the  Fund's
approach to matching the Fund's assets and liabilities.  The following  schedule
summarizes  the interest  rate risk by stating the  effective  interest  rate at
balance sheet date.

                                       21

<PAGE>

<TABLE>
<CAPTION>
                                     Variable         Fixed       Average interest rate
                                  Interest rate   Interest rate        Variable            Fixed
                                  --------------------------------------------------------------
<S>                               <C>             <C>             <C>                      <C>
       2004
Long-term debt (1)
               Sinai              $           -   $   2,252,433                -            11.0%
               REFI                           -       1,146,629             12.5%              -
               US Hydro               1,337,277               -              4.1%              -
               UK Projects (2)        4,274,210      18,683,677              5.9%            7.4%

       2003
Long-term debt (1)
               Sinai                          -       2,313,803                -            11.0%
               REFI                           -       1,642,583             12.5%              -
               US Hydro               5,650,000               -              2.9%              -
               UK Projects (3)        3,874,962      18,881,100              5.5%            7.4%
</TABLE>

      (1)   The  amounts  above  include  the  total  long-term  debt  of the UK
      Projects.  The Fund owns a 30% interest in the UK Projects through a joint
      venture  with Power V and accounts  for this  investment  using the equity
      method (see Note 2 of the financial statements presented elsewhere in this
      Annual Report on Form 10-K).

      (2)   UK Projects  include  fixed  interest  rate on  outstanding  debt of
      $9,419,280 at 7.08% and $9,264,397 at 7.73%.

      (3)   UK Projects  include  fixed  interest  rate on  outstanding  debt of
      $9,698,121 at 7.08% and $9,182,979 at 7.73%.

   Quantitative Information About Market Risk

      This table provides  information  about the Fund's  financial  instruments
that are  defined by the  Securities  and  Exchange  Commission  as market  risk
sensitive  instruments.  These include only  short-term US government and agency
securities and bank obligations.  The table includes principal cash balances and
related weighted average interest rates by contractual maturity dates.

                                    December 31, 2004       December 31, 2003
                                 Expected Maturity Date   Expected Maturity Date
                                         2005                     2004
                                 ----------------------   ----------------------
                                        (US $)                   (US $)
Bank Deposits and Certificates
  of Deposit                           $ 77,000                 $ 55,000
Average interest rate                      1.07%                    1.07%

                                        (US $)                   (US $)
Bank Deposits denominated in
  Egyptian Pounds                      $692,000                 $747,000
Average interest rate                       7.0%                     7.0%

Item 8. Financial Statements and Supplementary Data.

A. Index to Consolidated Financial Statements

<TABLE>
<S>                                                                                                          <C>
Report of Independent Registered Public Accounting Firm .................................................            F-2
Report of Independent Registered Public Accounting Firm .................................................            F-3
Consolidated Balance Sheets at December 31, 2004 and 2003 ...............................................            F-4
Consolidated Statements of Operations for the three years ended December 31, 2004 .......................            F-5
Consolidated Statements of Changes in Shareholders' Equity for the three years ended December 31, 2004 ..            F-6
Consolidated Statements of Comprehensive Loss for the three years ended December 31, 2004 ...............            F-6
Consolidated Statements of Cash Flows for the three years ended December 31, 2004 .......................            F-7
Notes to Consolidated Financial Statements ..............................................................    F-9 to F-24
</TABLE>

                                       22

<PAGE>

             Report of Independent Registered Public Accounting Firm

Managing Shareholder and Shareholders
The Ridgewood Power Growth Fund

We have audited the  accompanying  consolidated  balance sheets of The Ridgewood
Power  Growth Fund (the "Fund") as of December 31, 2004 and 2003 and the related
consolidated   statements  of  operations,   changes  in  shareholders'   equity
(deficit),  comprehensive income (loss) 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  audits to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
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 provides a reasonable basis for our opinion.

In our opinion, the 2004 and 2003 consolidated  financial statements referred to
above present  fairly,  in all material  respects,  the  consolidated  financial
position of The Ridgewood Power Growth Fund as of December 31, 2004 and 2003 and
the consolidated results of its operations and its cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

/s/ Perelson Weiner LLP

New York, New York
January 31, 2006

                                       F-2

<PAGE>

             Report of Independent Registered Public Accounting Firm

To the Shareholders of
The Ridgewood Power Growth Fund:

In  our  opinion,  the  accompanying   consolidated  statements  of  operations,
comprehensive loss, changes in shareholders'  equity and cash flows for the year
ended December 31, 2002 present fairly, in all material respects, the results of
operations  and cash flows of Ridgewood  Power Growth Fund and its  subsidiaries
(the  `Fund"),  for the  year  ended  December  31,  2002,  in  conformity  with
accounting principles generally accepted in the United States of America.  These
financial  statements  are the  responsibility  of the  Fund's  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audit.  We conducted our audit of these  statements  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  financial   statements  are  free  of  material
misstatement.  An audit 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,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Florham Park, NJ
May 29, 2003

                                       F-3

<PAGE>

The Ridgewood Power Growth Fund
Consolidated Balance Sheets
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                         ----------------------------
                                                                            2004            2003
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Assets:
Cash and cash equivalents                                                $    768,634    $    801,233
Accounts receivable, net of allowance of $148,649 and
  $105,106 in 2004 and 2003, respectively                                   1,159,434       1,055,229
Current portion of notes receivable                                           131,399       4,269,020
Due from affiliates                                                         2,084,990       2,491,141
Deferred income taxes                                                               -       1,435,129
Inventories                                                                   563,470         481,942
Prepaid expenses and other current assets                                     559,003         197,638
                                                                         ------------    ------------
      Total current assets                                                  5,266,930      10,731,332
                                                                         ------------    ------------
Investments:
United Kingdom Landfill Gas Projects                                        2,334,069       3,710,032
Investment in ZAP securities                                                1,750,000               -
                                                                         ------------    ------------
      Total investments                                                     4,084,069       3,710,032
                                                                         ------------    ------------
Property, plant and equipment:
Plant and equipment                                                        26,190,582      25,493,317
Construction in progress                                                       58,823         598,880
Office equipment                                                              747,865         792,878
                                                                         ------------    ------------
                                                                           26,997,270      26,885,075
Accumulated depreciation                                                   (6,320,102)     (4,283,674)
                                                                         ------------    ------------
                                                                           20,677,168      22,601,401
                                                                         ------------    ------------

Electric power sales contracts                                             16,221,303      17,558,501
Accumulated amortization                                                   (3,132,121)     (1,888,661)
                                                                         ------------    ------------
                                                                           13,089,182      15,669,840
                                                                         ------------    ------------

Notes receivable, less current portion                                      1,635,722               -
Other assets                                                                   59,475           6,186
Goodwill                                                                    4,491,938       5,153,145
                                                                         ------------    ------------

      Total assets                                                       $ 49,304,484    $ 57,871,936
                                                                         ============    ============
Liabilities and shareholders' equity:
Accounts payable                                                         $    545,150    $    604,112
Accrued expenses                                                              591,046         676,490
Current portion of long-term debt                                           1,177,888       4,883,983
Due to affiliates                                                           2,999,627       1,888,394
                                                                         ------------    ------------
      Total current liabilities                                             5,313,711       8,052,979

Long-term debt, less current portion                                        3,558,451       4,722,403
Other liabilities                                                             542,829         513,969
Deferred rent                                                                 259,440         134,720
Deferred income taxes, net                                                  3,587,267       5,826,098
Minority interest                                                          10,791,773      10,908,676
                                                                         ------------    ------------
      Total liabilities                                                    24,053,471      30,158,845
                                                                         ------------    ------------
Commitments and contingencies

Shareholders' equity (deficit):
Shareholders' equity (658.1067 investor shares issued and outstanding)     25,472,553      27,995,283
Managing shareholder's accumulated deficit (1 management
  share issued and outstanding)                                              (221,540)       (282,192)
                                                                         ------------    ------------
      Total shareholders' equity                                           25,251,013      27,713,091

                                                                         ------------    ------------

      Total liabilities and shareholders' equity                         $ 49,304,484    $ 57,871,936
                                                                         ============    ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-4

<PAGE>

The Ridgewood Power Growth Fund
Consolidated Statements of Operations
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                               For The Year Ended December 31,
                                                                      ------------------------------------------------
                                                                          2004              2003              2002
                                                                      ------------      ------------      ------------
<S>                                                                   <C>               <C>               <C>
Revenues                                                              $ 10,584,979      $ 10,244,684      $  5,830,356

Cost of revenues, including depreciation and
   amortization of $3,558,992, $3,628,238 and
   $2,076,939 in 2004, 2003 and 2002, respectively                       8,001,592         7,142,351         5,403,596
                                                                      ------------      ------------      ------------

Gross profit                                                             2,583,387         3,102,333           426,760
                                                                      ------------      ------------      ------------
Other operating expenses:
   General and administrative expenses                                   3,045,278         3,302,304         2,029,485
   Management fee to the managing shareholders                             822,633           822,633           822,633
   (Gain) write-down of assets in power generation projects, net          (564,713)        2,495,178           297,652
   Impairment of goodwill                                                  661,207           555,502                 -
   Provision for bad debts                                                  41,906           536,472           138,233
                                                                      ------------      ------------      ------------
      Total other operating expenses                                     4,006,311         7,712,089         3,288,003
                                                                      ------------      ------------      ------------

Loss from operations                                                    (1,422,924)       (4,609,756)       (2,861,243)
                                                                      ------------      ------------      ------------

Other income (expense):
   Interest income                                                          20,073            58,395            59,678
   Interest expense                                                       (689,436)         (860,659)         (987,602)
   Equity interest in loss from:
      United Kingdom Landfill Gas Projects                                (552,489)         (627,057)         (845,164)
      Sinai Environmental Services                                               -                 -           (37,287)
   Gain (loss) on sale of property, plant and equipment                      5,693          (499,443)                -
   Gain on distribution and sale of investment
      in ZAP securities                                                  2,419,281           117,980                 -
   Gain on sale of US Hydro note                                           174,631                 -                 -
   Other (expense) income                                                  (89,614)           92,839           152,314
                                                                      ------------      ------------      ------------
      Total other income (expense), net                                  1,288,139        (1,717,945)       (1,658,061)
                                                                      ------------      ------------      ------------

Loss before income taxes and minority interest                            (134,785)       (6,327,701)       (4,519,304)

Income tax (benefit) expense                                              (627,652)       (1,053,744)           12,622
                                                                      ------------      ------------      ------------

Income (loss) before minority interest                                     492,867        (5,273,957)       (4,531,926)

Minority interest in the loss of subsidiaries                              152,271         1,483,914         1,200,553
                                                                      ------------      ------------      ------------

Net income (loss)                                                     $    645,138      $ (3,790,043)     $ (3,331,373)
                                                                      ============      ============      ============

Managing Shareholder - Net income (loss)                              $     70,935      $    (37,900)     $    (33,314)
                                                                      ============      ============      ============

Shareholders - Net income (loss)                                      $    574,203      $ (3,752,143)     $ (3,298,059)
                                                                      ============      ============      ============

Net income (loss) per investor share                                  $        873      $     (5,701)     $     (5,011)
                                                                      ============      ============      ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-5

<PAGE>

The Ridgewood Power Growth Fund
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                              Total
                                                                          Managing       Shareholders'
                                                        Shareholders     Shareholder    Equity (Deficit)
                                                       -------------    ------------    ----------------
<S>                                                     <C>             <C>             <C>
Shareholders' equity (deficit), January 1, 2002         $ 39,479,962    $   (166,186)   $     39,313,776

Foreign currency translation adjustment                      330,231           3,336             333,567

Net loss                                                  (3,298,059)        (33,314)         (3,331,373)
                                                       -------------    ------------    ----------------
Shareholders' equity (deficit), December 31, 2002         36,512,134        (196,164)         36,315,970

Cash distributions                                        (1,316,418)        (13,297)         (1,329,715)

Foreign currency translation adjustment                   (3,448,290)        (34,831)         (3,483,121)

Net loss                                                  (3,752,143)        (37,900)         (3,790,043)
                                                       -------------    ------------    ----------------
Shareholders' equity (deficit), December 31, 2003         27,995,283        (282,192)         27,713,091

Cash distributions                                        (1,316,407)        (13,297)         (1,329,704)

Distribution of ZAP securities                            (2,078,959)              -          (2,078,959)

Foreign currency translation adjustment                      298,433           3,014             301,447

Net income                                                   574,203          70,935             645,138
                                                       -------------    ------------    ----------------
Shareholders' equity (deficit), December 31, 2004       $ 25,472,553    $   (221,540)   $     25,251,013
                                                       =============    ============    ================
</TABLE>

The Ridgewood Power Growth Fund
Consolidated Statements of Comprehensive Income (Loss)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                For The Year Ended December 31,
                                                       -------------------------------------------------
                                                           2004             2003              2002
                                                       -------------    ------------    ----------------
<S>                                                    <C>              <C>             <C>
Net income (loss)                                      $     645,138    $ (3,790,043)   $     (3,331,373)

Foreign currency translation adjustment                      301,447      (3,483,121)            333,567
                                                       -------------    ------------    ----------------
Comprehensive income (loss)                            $     946,585    $ (7,273,164)   $     (2,997,806)
                                                       =============    ============    ================
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-6

<PAGE>

The Ridgewood Power Growth Fund
Consolidated Statements Of Cash Flows
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          For The Year Ended December 31,
                                                                     -----------------------------------------
                                                                        2004            2003           2002
                                                                     -----------    -----------    -----------
<S>                                                                  <C>            <C>            <C>
Cash flows from operating activities:
Net income (loss)                                                    $   645,138    $(3,790,043)   $(3,331,373)
                                                                     -----------    -----------    -----------
Adjustments to reconcile net income (loss) to net cash flows
   provided by (used in) operating activities:
   Non-cash adjustments to acquired assets and
      assumed liabilities, net                                                 -       (371,531)             -
   Depreciation and amortization                                       3,558,992      3,628,238      2,076,939
   Writedown of Ridgewood Dubai advances                                 869,629              -              -
   Provision for bad debts                                                41,906        536,472        138,233
   (Gain) writedown of assets in power generation projects, net         (564,713)     2,495,178        297,652
   Impairment of goodwill                                                661,207        555,502              -
   Minority interest in loss of subsidiaries                            (152,271)    (1,483,914)    (1,200,553)
   Equity interest in loss of United Kingdom Landfill Gas Projects       552,489        627,057        845,164
   Equity interest in loss of Sinai Environmental Services                     -              -         37,287
   Gain on distribution and sale of investment in ZAP securities      (2,419,281)      (117,980)             -
   (Gain) loss on sale of equipment                                       (5,693)       499,443              -
   Gain on sale of US Hydro note, net                                   (174,631)             -              -
   Changes in assets and liabilities, net of acquired businesses:
      Increase in accounts receivable                                   (139,279)      (232,149)      (355,234)
      Increase in inventories                                            (76,135)      (305,254)      (169,126)
      (Increase) decrease in other current assets                       (354,764)        15,069        145,661
      (Increase) decrease in other assets                                (53,238)        57,152       (126,435)
      Decrease in accounts payable                                       (65,581)      (120,502)      (940,911)
      (Decrease) increase in accrued expenses                            (85,443)        89,256      1,517,352
      Increase in due to/from affiliates, net                            919,948        719,157         94,126
      (Decrease) increase in other liabilities                           (40,423)       513,969              -
      Increase in deferred rent                                          124,720        134,720              -
      Decrease in deferred income taxes                                 (803,702)    (1,317,678)             -
                                                                     -----------    -----------    -----------
         Total adjustments                                             1,793,737      5,922,206      2,360,155
                                                                     -----------    -----------    -----------
            Net cash provided by (used in) operating activities        2,438,875      2,132,162       (971,218)
                                                                     -----------    -----------    -----------

Cash flows from investing activities:
   Capital expenditures                                                 (317,382)      (360,010)    (1,067,390)
   Proceeds from sale of equipment                                       108,623        388,989              -
   Collections from notes receivable                                     464,473        200,000              -
   Proceeds from sale of note receivable, net                          3,974,631              -              -
   Investment in ZAP securities                                       (2,814,115)             -              -
   Proceeds from sale of investment in ZAP securities                  1,404,437        117,980              -
   Advances to Ridgewood Dubai                                          (869,629)             -              -
   Investment in United Kingdom Landfill Gas Projects                          -              -         (4,491)
   Distributions from United Kingdom Landfill Gas Projects             1,043,377        938,088              -
   Cash paid for acquisition of Sinai Environmental Services                   -              -       (981,267)
   Cash received in acquisition of US Hydro Projects, net                      -              -      2,261,686
                                                                     -----------    -----------    -----------
      Net cash provided by investing activities                        2,994,415      1,285,047        208,538
                                                                     -----------    -----------    -----------
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-7

<PAGE>

The Ridgewood Power Growth Fund
Consolidated Statements Of Cash Flows - Continued
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          For The Year Ended December 31,
                                                                     -----------------------------------------
                                                                        2004            2003           2002
                                                                     -----------    -----------    -----------
<S>                                                                  <C>            <C>            <C>
Cash flows from financing activities:
   Repayments under bank loan                                         (4,892,408)    (1,978,353)      (554,008)
   Borrowings under bank loan                                                  -              -      2,688,172
   Short term advances from/to affiliates, net                           750,000              -     (1,505,244)
   Cash distributions to shareholders                                 (1,329,704)    (1,329,715)             -
                                                                     -----------    -----------    -----------
      Net cash (used in) provided by financing activities             (5,472,112)    (3,308,068)       628,920
                                                                     -----------    -----------    -----------

Effect of exchange rate on cash and cash equivalents                       6,223       (227,811)         5,347
                                                                     -----------    -----------    -----------

Net decrease in cash and cash equivalents                                (32,599)      (118,670)      (128,413)
Cash and cash equivalents, beginning of year                             801,233        919,903      1,048,316
                                                                     -----------    -----------    -----------
Cash and cash equivalents, end of year                               $   768,634    $   801,233    $   919,903
                                                                     ===========    ===========    ===========

Supplemental Disclosures:
Dividend receivable                                                            -    $   342,756              -
Operating assets and liabilities included in business
   acquisitions,including purchase price adjustments:
Accounts receivable                                                            -              -    $   780,137
Deferred income tax assets                                                     -      1,435,129              -
Electric power sales contracts                                                 -      1,649,822              -
Goodwill                                                                       -      5,708,647              -
Notes receivable                                                               -              -      6,749,822
Other assets                                                                   -              -        248,478
Loans payable                                                                  -              -     10,898,473
Accounts payable and accrued expenses                                                 1,100,000      1,766,868
Deferred income tax liabilities                                                       7,143,776              -
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-8
<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 1
--------------------------------------------------------------------------------

1.  Organization and Purpose

The Ridgewood  Power Growth Fund (the "Fund") was formed as a Delaware  business
trust in February 1997.  The Fund began offering  shares on February 9, 1998 and
discontinued  its  offering  in April 2000.  Ridgewood  Capital  Management  LLC
("RCC",  formerly Ridgewood Capital Corporation) provided most services required
to support the  offering.  The managing  shareholders  of the Fund are Ridgewood
Renewable   Power  LLC  ("RPC")  and   Ridgewood   Power  VI  LLC  ("Power  VI")
(collectively, the "Managing Shareholder").  Subsequently, Power VI has assigned
and delegated all of its rights and  responsibilities  to RPC and is essentially
an entity that contains nominal activity.  The Managing  Shareholder and RCC are
related through common ownership.

The Fund has been organized to invest primarily in independent  power generation
facilities,  water  desalinization  plants and other capital  facilities.  These
independent power generation  facilities will include  cogeneration  facilities,
which produce both  electricity  and heat energy and other power plants that use
various  fuel  sources  (except  nuclear).  In the past,  the Fund  invested  in
opportunities outside of independent power generation facilities.

Christiana  Bank & Trust Company,  a Delaware  trust  company,  is the Corporate
Trustee of the Fund.  The  Corporate  Trustee  acts on the  instructions  of the
Managing  Shareholder  and is not authorized to take  independent  discretionary
action on behalf of the Fund.

2. Summary of Significant Accounting Policies

Principles of consolidation

The consolidated  financial  statements include the accounts of the Fund and its
controlled  subsidiaries.  All  material  intercompany  transactions  have  been
eliminated.

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

Use of estimates

The  preparation  of  consolidated   financial  statements  in  accordance  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  the Fund to make  estimates  and  judgments  that affect the  reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities.  On an on-going basis, the Fund evaluates its
estimates,  including  provision for bad debts,  carrying value of  investments,
amortization/depreciation  of plant and equipment  and  intangible  assets,  and
recordable  liabilities for litigation and other  contingencies.  The Fund bases
its  estimates on historical  experience,  current and expected  conditions  and
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.

New Accounting Standards and Disclosures

SFAS 143

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 143,
Accounting for Asset Retirement  Obligations,  on the accounting for obligations
associated  with the  retirement  of  long-lived  assets.  SFAS 143  requires  a
liability  to  be  recognized  in  the  consolidated  financial  statements  for
retirement  obligations  meeting specific  criteria.  Measurement of the initial
obligation is to approximate fair value,  with an equivalent  amount recorded as
an increase in the value of the capitalized asset. The asset will be depreciated
in  accordance  with  normal  depreciation  policy  and  the  liability  will be
increased  for the time value of money,  with a charge to the income  statement,
until  the  obligation  is  settled.  SFAS 143 is  effective  for  fiscal  years
beginning  after June 15, 2002.  The Fund adopted SFAS 143 effective  January 1,
2003, with no material impact on the consolidated financial statements.

SFAS 145

In April 2002, the FASB issued SFAS No. 145,  Rescission of FASB  Statements No.
4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical  Corrections.
SFAS No. 145 eliminates extraordinary accounting treatment for reporting gain or
loss  on  debt   extinguishment,   and  amends  other   existing   authoritative
pronouncements  to make various  technical  corrections,  clarify  meanings,  or
describe their applicability under changed conditions. The Fund adopted SFAS 145
effective January 1, 2003, with no material impact on the consolidated financial
statements.

SFAS 146

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal  Activities.  SFAS No. 146 requires  recording costs associated
with exit or disposal  activities at their fair values when a liability has been
incurred.  The Fund adopted SFAS 146 effective January 1, 2003, with no material
impact on the consolidated financial statements.

                                       F-9

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 2
--------------------------------------------------------------------------------

FIN 45

In  November  2002,  the FASB  issued  FASB  Interpretation  No. 45 ("FIN  45"),
Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,  Including
Indirect  Guarantees  and  Indebtedness  of  Others.  FIN 45  elaborates  on the
disclosures  to be made by the  guarantor  in its interim  and annual  financial
statements about its obligations under certain guarantees that it has issued. It
also requires  that a guarantor  recognize,  at the inception of a guarantee,  a
liability  for the fair  value  of the  obligation  undertaken  in  issuing  the
guarantee.   The  initial   recognition  and  measurement   provisions  of  this
interpretation  are  applicable on a prospective  basis to guarantees  issued or
modified  after  December  31,  2002;  while the  provisions  of the  disclosure
requirements are effective for financial statements of interim or annual reports
ending  after  December  15,  2002.  The Fund  adopted  FIN 45 during the fourth
quarter  of  2002  with  no  material  impact  to  the  consolidated   financial
statements.

FIN 46R

In January 2003, the FASB issued FASB  Interpretation  No. 46,  Consolidation of
Variable  Interest  Entities  ("FIN 46") which changes the criteria by which one
company includes another entity in its consolidated financial statements. FIN 46
requires  a variable  interest  entity to be  consolidated  by a company if that
company is subject to a majority of the risk of loss from the variable  interest
entity's  activities or entitled to receive a majority of the entity's  residual
returns or both. The  consolidation  requirements of FIN 46 apply immediately to
variable  interest  entities  created after  December 31, 2003, and apply in the
first fiscal period ending after March 15, 2004, for variable  interest entities
created prior to January 1, 2004. The Fund adopted the disclosure  provisions of
FIN 46 effective  December 31, 2003, with no material impact to the consolidated
financial  statements.  In December  2003,  the FASB issued a revision to FIN 46
("FIN 46R") to clarify some of the  provisions  and to exempt  certain  entities
from its  requirements.  The Fund  implemented  the full  provisions  of FIN 46R
effective January 1, 2004, with no material impact on the consolidated financial
statements.

SFAS 149

In April  2003,  the FASB issued SFAS No. 149,  Amendment  of  Statement  133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
the  accounting  for  derivative   instruments,   including  certain  derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS
No. 149 is generally effective for contracts entered into or modified after June
30, 2003 and for hedging relationships  designated after June 30, 2003. The Fund
adopted  SFAS  149  effective  July 1,  2003,  with no  material  impact  on the
consolidated financial statements.

SFAS 150

In May 2003,  the FASB  issued SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity.  SFAS No. 150
establishes   standards  for   classifying  and  measuring   certain   financial
instruments  with  characteristics  of both  liabilities  and  equity.  The Fund
adopted  SFAS  150  effective  July 1,  2003,  with no  material  impact  on the
consolidated financial statements.

SFAS 153

In  December  2004,  the FASB  issued SFAS No.  153,  Exchanges  of  Nonmonetary
Assets--an  amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29,
Accounting  for  Nonmonetary  Transactions  ("Opinion  29"),  is  based  on  the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair  value of the assets  exchanged.  The  guidance  in  Opinion  29,  however,
included certain exceptions to that principle.  This Statement amends Opinion 29
to eliminate  the  exception  for  nonmonetary  exchanges of similar  productive
assets and replaces it with a general  exception  for  exchanges of  nonmonetary
assets  that do not  have  commercial  substance.  A  nonmonetary  exchange  has
commercial  substance  if the future  cash flows of the entity are  expected  to
change  significantly  as a result of the  exchange.  The Fund  adopted SFAS 153
effective June 15, 2005, with no material impact on the  consolidated  financial
statements.

Significant Accounting Policies

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.  Cash  and  cash
equivalents  consist of commercial  paper and funds  deposited in bank accounts.
Cash  balances  with bank  exceeded  insured  limits by $692,000 at December 31,
2004.

Accounts receivable

Trade  receivables  are recorded at invoice price and do not bear interest.  The
Fund  recorded an allowance  for  doubtful  accounts of $148,649 and $105,106 in
2004  and  2003,  respectively,  based  upon  historical  write-off  experience,
evaluation of customer credit  condition and the general  economic status of the
customer.  For the years  ended  December  31,  2004,  2003 and  2002,  the Fund
recorded   provision   for  bad  debts  of  $41,906,   $536,472  and   $138,233,
respectively.

Inventories

Inventories consist of spare parts, consumable products, fuel,  goods-in-transit
and finished goods of the Egypt operations.  Inventories are stated at the lower
of cost and net realizable value. Ridgewood Near East changed the inventory cost
method from  first-in-first-out  (FIFO) to the moving  average method during the
second quarter of 2004. The effect on the

                                      F-10

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 3
--------------------------------------------------------------------------------

inventory  value and cost of revenues  resulting  from the change is immaterial.
Net realizable  value is the estimated  selling price in the ordinary  course of
business,  less the costs of completion  and selling  expenses.  An allowance is
established  for slow  moving  items on the  basis of  management's  review  and
assessment of inventory movements.

At December 31, 2004 and 2003, the inventories were as follows:

                                         December 31,
                                       2004       2003
                                    ---------   ---------
Spare parts and consumables         $ 532,626   $ 428,273
Fuel                                   30,844      23,822
Goods-in-transit                            -      16,286
Finished goods                              -      13,561
                                    ---------------------
Total inventories                   $ 563,470   $ 481,942
                                    ---------------------

Revenue recognition

Power generation and water revenues are recorded in the month of delivery, based
on the  estimated  volumes sold to  customers.  Adjustments  are made to reflect
actual  volumes  delivered  when the  actual  information  subsequently  becomes
available. Billings to customers for power generation generally occur during the
month  following  delivery.  Final  billings  do  not  vary  significantly  from
estimates.

Foreign currency translation

The  consolidated   financial   statements  of  the  Fund's   non-United  States
subsidiaries  utilize  local  currency  as  their  functional  currency  and are
translated into United States dollars using current rates of exchange;  gains or
losses on conversion are included in the foreign currency translation adjustment
account in the shareholders' equity section of the Consolidated Balance Sheets.

On January 30, 2003, the Egyptian government  discontinued the regulation of its
monetary  currency  rate and decided to allow the currency  rate to float.  As a
result of this change in policy, the Egyptian pound decreased 15% against the US
dollar on January 30, 2003.  As of December 31, 2003,  the Fund's  investment in
the Egyptian  operations  decreased by approximately  27% due to the decrease in
the exchange rate from January 1, 2003 through December 31, 2003. For the period
of January 1, 2004  through  December  31,  2005 the  Egyptian  pound  increased
approximately  4.9%  against  the US dollar.  The  cumulative  foreign  currency
translation  adjustment which represents total accumulated  other  comprehensive
loss and is  included  in  shareholders'  equity at  December  31, 2004 and 2003
amount to a loss of $8,253,824 and $8,555,271, respectively.

Impairment of Goodwill and long-lived assets

In accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible
Assets,  and  SFAS  No.  144,  Accounting  for the  Impairment  or  disposal  of
Long-Lived Assets,  the Fund evaluates  goodwill and long-lived assets,  such as
plant and  equipment  and  amortizable  intangibles,  when  events or changes in
circumstances  indicate  that  the  carrying  value  of such  assets  may not be
recoverable.

Goodwill  represents  the  excess  cost  over  fair  value of the net  assets of
purchased  businesses.  Goodwill and long-lived assets are assessed annually for
impairment  in the first  quarter of each year or more  frequently if impairment
indicators arise, based on the fair value. To perform annual goodwill impairment
testing, the Fund compared the fair value of each reporting unit to its carrying
value.  If the fair value of the reporting unit is less than its carrying value,
an  impairment  loss is  recorded.  Fair  values are  determined  by taking into
account future estimated  discounted cash flows which are based on detailed cash
flow  forecast  of each  reporting  unit at the  estimated  cost of  capital  of
approximately 6.9% for 2004.

The Fund performed its annual impairment evaluation,  which resulted in goodwill
impairment  expense of  approximately  $661,000 and $556,000 for the years ended
December 31, 2004 and 2003,  respectively.  In addition,  long-lived assets were
impaired for $0 and approximately  $1,902,000 which is included in write-down of
assets in power generation  projects,  for the years ended December 31, 2004 and
2003,  respectively.   Goodwill,  resulting  from  the  deferred  tax  liability
associated  with the  acquisition  of US Hydro,  was not supported by discounted
future cash flow of the  underlying  projects to the extent of  impairment.  The
impairment of long-lived  assets impacting the loss from operations is primarily
due to decrease in future  undiscounted  cash flow of certain US Hydro  projects
resulting  from the exercise of certain  rights of the off take party on various
power  agreements  and the  restructuring  of power  agreement at the Blackstone
Project.  All of the  impairments  relate to assets included in the Fund's Power
segment.  At December 31, 2004 and 2003,  the gross and net amount of intangible
assets were:

                                      F-11

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 4
--------------------------------------------------------------------------------

                                                   2004           2003
                                              -------------   ------------
    Amortized intangibles:
      Electric power sales contracts - gross  $  16,221,303   $ 17,558,501
        Less accumulated amortization
          expense                                 3,132,121      1,888,661

      Electric power sales contracts - net    $  13,089,182   $ 15,699,840

    Unamortized intangibles:
      Goodwill                                $   4,491,938   $  5,153,145

Electric  power  sales  contract  is being  amortized  over the  duration of the
contracts (from 4 to 22 years) on a straight-line  basis. During the years ended
December  31,  2004,  2003  and  2002,   amortization  expense  was  $1,503,362,
$1,806,414 and $82,247,  respectively.  The Fund expects to record  amortization
expense during the next five years as follows:

                  Year Ended
                  December 31,             Amortization
                  ------------             ------------
                  2005                     $  1,351,486
                  2006                        1,049,158
                  2007                          919,589
                  2008                          870,665
                  2009                          756,509

Plant and equipment

Plant and equipment,  consisting  principally of electrical generating equipment
and water  desalinization  facilities,  are stated at cost.  Major  renewals and
betterments that increase the useful lives of the assets are capitalized. Repair
and  maintenance  expenditures  that  increase the  efficiency of the assets are
expensed as incurred.

Depreciation is recorded using the straight-line method over the useful lives of
the assets,  which vary from 3 to 20 years with a weighted  average of 13 and 17
years at  December  31,  2004 and 2003,  respectively.  During  the years  ended
December  31,  2004,  2003  and  2002,   depreciation  expense  was  $2,055,630,
$1,821,824 and $1,994,692, respectively.

Income taxes

The Fund's Egyptian  subsidiaries  have ten year income tax holidays that expire
in 2008  through  2010.  Accordingly,  no  provision  has been made for Egyptian
income taxes in the accompanying consolidated financial statements.

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

Except for the US Hydro  Projects,  no  provision is made for US 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.

Investment in securities

The Fund has classified its marketable equity securities as  available-for-sale.
Available-for-sale  securities  are carried at fair value,  with the  unrealized
gains and  losses,  net of tax (if any),  reported  in a separate  component  of
shareholders' equity.  Realized gains and losses and declines in value judged to
be other-than-temporary are included in other income.

Supplemental cash flow information

Total interest paid during the years ended December 31, 2004,  2003 and 2002 was
$595,466, $807,735 and $1,057,866 respectively.

In 2004,  the Fund  distributed  772,500  shares of ZAP common stock with a fair
value of $2,078,959 to its investor shareholders.

For the years ended  December  31, 2004 and 2003,  the Fund paid income taxes of
$102,285 and $166,920, respectively.

Significant Customers

The Fund's largest  customers  accounted for 22.4% and 14.4% of revenue in 2004,
27.9% and 16.9% of revenue in 2003 and 20.6% and 10.1% of revenue in 2002.

                                      F-12

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 5
--------------------------------------------------------------------------------

Reclassification

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

3. Projects

The Fund is comprised of several projects summarized as follows:

                                               Accounting     Percent
                                                Method       Ownership
                                            ---------------------------
   Egypt Projects                            Consolidation       68.1%
   US Hydro Projects                         Consolidation       70.8%
   United Kingdom Landfill Gas Projects             Equity       30.0%

Egypt Projects

In 1999,  the Fund and  Ridgewood  Electric  Power  Trust V ("Trust  V") jointly
formed  Ridgewood  Near East  Holdings  LLC  ("Ridgewood  Near East") to develop
electric  power and water  purification  plants for resort  hotels in Egypt.  In
2000, the Fund made additional  investments and acquired  majority  ownership of
Ridgewood Near East which wholly owns Ridgewood  Egypt For  Infrastructure,  LLC
("REFI").  The Fund and Trust V own  Ridgewood  Near East in  proportion  to the
capital they contributed, net of distributions and allocated profits and losses.
Accordingly,  the Fund has  consolidated  the financial  statements of Ridgewood
Near East since 2000. In 2001, Ridgewood/Egypt Fund ("Egypt Fund"), an affiliate
of Trust V and the Fund, made  contributions  to Ridgewood Near East in exchange
for a minority  interest.  At December 31, 2004 and 2003, the Fund owns 68.1% of
Ridgewood  Near East.  Trust V and the Egypt Fund's  interests in Ridgewood Near
East are presented as minority  interest in the consolidated  balance sheets and
consolidated statements of operations.

Currently REFI consists of 8 water desalinization  plants, 1 electric generation
plant and 8 combination electric generation/water plants. The projects generally
sell their  electricity  and drinking  water output  under  contracts  and other
arrangements at prevailing market rates. In 2002, REFI shut down and removed the
equipment  from two of its  water  desalinization  plants.  As a result of these
transactions,  REFI  recorded  a  writedown  of  $297,652  in 2002 to adjust the
carrying  value of the projects to reflect their  current fair market value.  In
the first quarter of 2003,  REFI sold another of its on-site power plants to the
hosting hotel.  As a result of the sale,  REFI recorded a loss on sale of assets
of  $499,443  in 2003.  The  writedown  and  loss on sale of  assets  have  been
presented as separate line items in the consolidated statements of operations.

On December 30, 2001,  Ridgewood Near East, through REFI, purchased a 28% equity
interest in Sinai Environmental  Services S.A.E.  ("Sinai"), a 1,585,000 gallons
per day water desalinization plant, for 4,999,800 Egyptian pounds (approximately
US  $1,087,000  in 2001).  At December 31,  2001,  the Fund  accounted  for this
investment  under the equity method of accounting  because it had the ability to
exercise significant  influence,  but not control. In February of 2002, the Fund
made an additional  investment of 4,379,637  Egyptian pounds  (approximately  US
$939,000 in 2002) to increase its ownership to 53% and gain control of Sinai. As
a result  of the  additional  investment,  effective  February  16,  2002,  REFI
accounts  for  its  investment  in  Sinai  under  the  consolidation  method  of
accounting. REFI is currently entitled to additional interest in Sinai in return
for providing  Sinai with certain  machinery and equipment.  On REFI, a minority
interest  receivable  related to this subsidiary was not recorded as of December
31,  2004 and 2003,  respectively,  as no  obligation  to fund the losses by the
minority shareholder exists.

At the time of acquisition in February 2002,  Sinai had plant and equipment with
a net book value of approximately  $5,906,000,  accounts  receivable of $214,000
and other assets with an approximate  book value of $32,000.  In accordance with
the purchase agreement,  the Fund assumed liabilities of approximately  $450,000
and a non-recourse loan of approximately $3,417,000 (approximately $2,252,000 at
December  31,  2004),  which was in default  (Note 4).  Ridgewood  Near East has
ascribed the excess  purchase  price of $777,000 (on its 53%  interest) to plant
and equipment which is being amortized over the 20 year life of the assets.

In 2003, the Fund hired an independent  third party engineering firm to analyze,
value and determine the economic life of the recorded plant and equipment of the
Sinai  Company.  As a result of the  analysis,  Ridgewood  Near East  recorded a
writedown of $527,416. The writedown has been presented as separate line item in
the consolidated statements of operations.

Since the effective date of the  acquisition of Sinai was February 16, 2002, the
pro forma  results of  operations as if the merger had taken place on January 1,
2002 would not be  significantly  different than the current results included in
the consolidated statements of operations.

US Hydro Projects

Beginning in 1999, the Fund and Trust V began negotiations with Synergics,  Inc.
("Synergics") to buy seven of its hydroelectric generating plants (the "US Hydro
Projects"). In the course of negotiations and due diligence, the Fund and

                                      F-13

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 6
--------------------------------------------------------------------------------

Trust V learned that one of  Synergics'  lenders had declared a payment  default
against  Synergics  and that the lender had  agreed to  discharge  the debt at a
substantial  discount  from the face  amount  (approximately  $23.5  million) if
payment were made by the end of April 2000.  In order to preserve the benefit of
the  lender's  offer and to allow  completion  of the  acquisition  on favorable
terms, the Fund and Trust V, through a joint venture (the "debt joint venture"),
acquired  the  debt  from  the  lender  on  April  28,  2000  for a  payment  of
approximately  $17 million to the lender.  The Fund  supplied $12 million of the
capital used by the debt joint  venture to acquire the debt and Trust V supplied
the remaining $5 million.  The Fund and Trust V own the debt joint venture 70.8%
and 29.2%,  respectively,  which is in proportion to the capital each  supplied.
Neither entity has preferred  rights over the other.  The Fund accounted for its
investment  in the  initial $17  million of debt  acquired as a note  receivable
through November 21, 2002.

On November 22, 2002,  through  another  joint venture (the  "acquisition  joint
venture")  owned in the same  proportion as the debt joint venture that acquired
the debt of  Synergics,  the Fund and Trust V completed its  acquisition  of the
U.S.  Hydro  Projects and acquired  100% of the  outstanding  stock of Synergics
through  a  structured  tax  reorganization.  As  part  of  the  tax  structured
reorganization,  the  former  shareholders  of  Synergics  received  100% of the
outstanding  shares of a  subsidiary  of  Synergics  in exchange for selling the
stock of Synergics to the Fund and Trust V for a nominal amount. Upon completion
of the acquisition,  Synergics was renamed Ridgewood U.S. Hydro Corporation, the
Fund accounted for its 70.8% interest in the US Hydro Projects as a purchase and
the results of  operations  of the US Hydro  Projects  have been included in the
Fund's consolidated financial statements.

The aggregate acquisition price of the US Hydro Projects (collectively, the debt
joint venture,  the acquisition joint venture,  and Synergics) was approximately
$20.3  million.  As a result of the  acquisition,  the Fund and Trust V received
seven hydroelectric  generating plants with a market value of approximately $1.8
million,  $2.7 million in cash and other current  assets,  and notes  receivable
with a market  value of $4.0  million  (approximately  $6.7  million  value  was
initially  assigned to the note at December 31, 2002).  In  accordance  with the
purchase agreement,  the Fund and Trust V assumed  approximately $7.5 million of
other bank debt, income taxes payable of $0.1 million and agreed to a contingent
income tax obligation  initially  estimated at approximately  $1 million.  As of
December  31,  2002,  the Fund and Trust V initially  ascribed  the  approximate
excess purchase price of $17.4 million to electric power sales contracts,  which
in 2003 was adjusted to  approximately  $19.4  million  (before the $1.9 million
impairment charge - Note 2) and will be amortized over the remaining life of the
respective contracts.

As part of the purchase agreement,  the Fund and Trust V had the option to treat
the acquisition of the Synergics stock as an acquisition of assets in accordance
with Internal  Revenue Code ("IRC")  Section 338 (h) 10. By electing IRC Section
338, the tax basis of the assets acquired would be stepped up and there would be
little if any difference  between the financial  reporting  basis and the income
tax basis of the assets acquired. If the election were made it was agreed that a
contingent  income  tax  obligation  would  be due the  seller  of the US  Hydro
Projects as  compensation  for their  increased tax cost. At  acquisition,  a $1
million  contingent  income tax  obligation was recorded as part of the purchase
price. However,  after further analysis, the income tax obligation due under IRC
Section 338 was estimated to be $1.7 million.

During the third quarter of 2003, the Fund and Trust V chose not to exercise the
IRC Section 338 h (10) election it had  originally  intended to make at the time
of the  acquisition of the US Hydro  Projects.  The Fund and Trust V's change in
position on IRC Section 338 was  determined  in part by the revised $1.7 million
contingent  tax  obligation  that would be due upon the filing of the  election,
compared  to the  minimal  income  taxes  that would be due over the life of the
projects. As a result of not exercising the IRC Section 338 h (10) election, the
Fund and Trust V reversed the $1 million  contingent tax obligation  (along with
other  purchase  price  adjustments)  and also  recorded  deferred  taxes on the
temporary  differences  between the financial reporting basis and the income tax
basis of the assets acquired,  which amounted to  approximately  $5.7 million of
net  deferred  tax  liabilities.  The Fund and Trust V assigned  $5.7 million of
additional net deferred tax liabilities to goodwill.

The unaudited pro forma  consolidated  financial  information  of the Fund shown
below has been prepared based upon the historical consolidated income statements
of the Fund and the US Hydro Projects,  giving effect to the Fund's  acquisition
of the US Hydro  Projects as if it had  occurred at the  beginning of the period
presented.   The  historical  information  has  been  adjusted  to  reflect  the
elimination of  intercompany  transactions as well as the interest income earned
on notes  receivable  from  third  parties.  The pro  forma  information  is not
necessarily  indicative  of the  results  that  the Fund  would  have had if its
acquisition of the US Hydro  Projects had been  completed  prior to November 23,
2002, or the results that the Fund will have in the future.

      Pro forma Combined Statement of Operations

                                                   For the Year Ended
                                                      December 31,
                                                          2002
                                                   ------------------
           Revenue                                 $       10,154,427
           Cost of sales                                    7,427,470
           Operating loss                                  (1,237,795)
           Minority interest                                 (809,912)
           Net loss                                        (2,384,203)
           Net loss per investor share                         (3,623)

                                      F-14

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 7
--------------------------------------------------------------------------------

United Kingdom Landfill Gas Projects

On May 26, 1999,  Ridgewood  UK, LLC  ("Ridgewood  UK") was formed as a Delaware
limited liability company,  which in turn formed a subsidiary  Ridgewood UK Ltd.
("UK Ltd"). On June 30, 1999,  Trust V contributed  $16,667,567 to Ridgewood UK;
in turn UK Ltd.,  purchased six landfill gas power plants  located in the United
Kingdom.  During 2001, the Fund contributed $5,817,006 to Ridgewood UK in return
for  an  approximate  equity  share  of  30%.  Approximately  $3,400,000  of the
contributed funds, along with bank financing,  was used to acquire four landfill
gas  power  plants in the  United  Kingdom  with a  capacity  of 10.6  megawatts
("MWs").  Approximately  $2,100,000 of the total  purchase price of the acquired
plants was assigned to the electric power sales contracts  acquired and is being
amortized over the life of the contracts (15 years).

On October 16, 2001, UK Ltd.,  through the issuance of approximately  24% of its
shares  and  $2,000,000  cash  under  the terms of a merger  agreement  (the "UK
Merger"),  acquired certain of the assets and liabilities of CLP Services, Ltd.,
CLP Development,  Ltd and CLP Envirogas,  Ltd. (collectively the "Management and
Development  Companies") and the equity and debt of new landfill  projects.  The
Management and Development  Companies  previously developed the various landfill
gas projects that were sold to UK Ltd. pursuant to the UK Merger. As a result of
the acquisition, which totaled seven plants, UK Ltd. provides its own operation,
management  and  development  services.  UK Ltd. was renamed CLPE  Holdings Ltd.
("CLP") in 2001.  In return for the stock  issuance  and  $2,000,000  cash,  CLP
received plant and equipment  valued at approximately  $4,201,000,  a 50% equity
interest in landfill projects valued at approximately $744,000, cash of $454,000
and other  assets with an  approximate  value of  $1,000,000.  CLP also  assumed
liabilities of approximately  $3,058,000.  CLP assigned the electric power sales
contracts and other intangibles  acquired a value of $6,781,000,  which is being
amortized over the 15 year life of the underlying power sales contracts.

Since 2001, the members of Ridgewood UK are Trust V and the Fund,  both Delaware
business trusts. Trust V, which owns 70% of Ridgewood UK, is managed by RPC, its
managing  shareholder.  The Fund, which owns 30% of the Ridgewood UK, is managed
by RPC and Power VI, its managing shareholder.

As of December 31,  2004,  CLP owned twenty  eight  landfill  methane  gas-fired
electric generating projects in the United Kingdom with an installed capacity of
approximately  42.2 MWs.  Seventeen of the projects  representing  approximately
26.5 MWs sells  electricity under 15 year contracts to the Non Fossil Purchasing
Agency ("NFPA"), a non-profit  organization that purchases electricity generated
by renewable  sources on behalf of all British  utilities.  The remaining eleven
projects representing approximately 15.7 MWs are subject to leases and sell this
output under one year  contracts.  As of December 31, 2005, CLP owned thirty one
landfill methane gas-fired  electric  generating  projects in the United Kingdom
with an installed capacity of approximately 48.7 MWs.

In the fourth  quarter of 2002,  CLP decided not to continue the  development of
two  projects it received as part of the 2001 UK Merger and recorded a writedown
of $854,367 to adjust the carrying value of the projects to zero.

As part of the UK Merger,  Ridgewood  UK also  acquired a 50%  ownership  in CLP
Organogas SL ("Organogas"), a 2 MW plant located in Seville, Spain, as well as a
50% interest in CLP Envirogas,  SL, ("Envirogas"),  a management and development
service  company  also  located in Seville,  Spain  (collectively,  the "Spanish
Landfill  Projects").  Under the terms of an agreement  with one of its minority
shareholders,  effective  January  1,  2003  Ridgewood  UK  transferred  its 50%
interest  in the  Spanish  Landfill  Projects  in return  for a  portion  of the
minority  shareholder's  interest  in  CLP.  As a  result  of  the  transaction,
Ridgewood UK increased its ownership in CLP from 76% to 88%.

Beginning in 2002,  Ridgewood UK began to identify and develop sites in order to
take advantage of the United Kingdom's  Renewable  Obligation  incentive program
("RO"). The RO program requires electricity  suppliers serving electric users in
the U.K. to obtain renewable obligation certificates ("ROC") to demonstrate that
a portion of their  electricity  supply  portfolio  was  produced  by  qualified
producers.  Registered  producers generate  electricity from qualified renewable
sources.  Accordingly,  Ridgewood  UK  began  to  borrow  funds  from  Ridgewood
Renewable  PowerBank  LLC,  an  affiliated  entity,  to finance  Ridgewood  UK's
expansion in 2002. In 2003 and 2004,  Ridgewood UK borrowed funds from Ridgewood
Renewable  PowerBank II LLC, Ridgewood Renewable PowerBank III LLC and Ridgewood
Renewable  PowerBank  IV LLC,  all  affiliates  of  Ridgewood UK (as they have a
common managing shareholder),  to further finance expansion.  As of December 31,
2004,  Ridgewood  UK received  advances  totaling  $53,770,169  from four of the
respective  PowerBank Funds with the expectation to develop twenty nine projects
with an operating  capacity of 37.6 MWs. As of December  31, 2004,  Ridgewood UK
had commissioned eleven projects with a capacity of 15.6 MWs. As of December 31,
2005,  Ridgewood UK had  commissioned  sixteen  projects with a capacity of 21.3
MWs.

The Fund's 30%  investment  in Ridgewood  UK is  accounted  for under the equity
method  of  accounting  as the  Fund has the  ability  to  exercise  significant
influence over the operating and financial  policies of Ridgewood UK. The Fund's
equity in the  earnings of Ridgewood  UK has been  included in the  consolidated
statements of operations since acquisition.

                                      F-15

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 8
--------------------------------------------------------------------------------

Summarized financial information for the United Kingdom Landfill Gas Projects is
as follows:

      Balance Sheet Information

                                   December 31,    December 31,
                                      2004            2003
                                  -------------   -------------

Current assets                    $  30,790,976   $  39,129,585
Non-current assets                   70,485,487      53,899,002
                                  -------------   -------------
Total assets                      $ 101,276,463   $  93,028,587
                                  =============   =============

Current liabilities               $  10,669,975   $  12,307,232
Long-term debt                       21,065,111      21,193,090
Construction advances                35,685,487      34,178,955
Capital lease obligations            23,653,518      10,198,319
Deferred income taxes                   994,072         753,979
Minority interest                     1,423,814       2,030,568
Members' equity                       7,784,486      12,366,444
                                  -------------   -------------
Liabilities and members' equity   $ 101,276,463   $  93,028,587
                                  =============   =============

      Statements of Operations

                                    For the Year Ended December 31,
                             ----------------------------------------------
                                  2004             2003           2002
                             ----------------------------------------------
Revenue                      $   22,776,328   $  13,713,905   $   9,120,088
                             --------------   -------------   -------------
Cost of sales                    20,484,901      13,633,056       9,991,516
Other expenses                    4,134,083       2,170,997       1,945,724
                             --------------   -------------   -------------
Total expenses                   24,618,984      15,840,053      11,937,240
                             --------------   -------------   -------------
Net loss                     $   (1,842,656)  $  (2,090,148)  $  (2,817,152)
                             ==============   =============   =============

ZAP

In March 1999, the Fund,  through a wholly owned  subsidiary,  purchased 678,808
shares of common stock of ZAP ("ZAP",  formerly ZAP  World.com,) for $2,050,000.
ZAP, headquartered in Sebastopol,  California, designs, assembles,  manufactures
and distributes electric power bicycle kits, electric bicycles and tricycles and
electric  scooters.  As part of the  $2,050,000  share  purchase,  the Fund also
received a warrant to  purchase  additional  shares of ZAP's  common  stock at a
price between $3.50 and $4.50 per share.  In June 1999,  the Fund  exercised the
warrant and purchased 571,249 additional shares for approximately $2,000,000, or
$3.50 per share. The Fund then owned approximately 21% of the outstanding common
stock of ZAP.  In  December  1999,  the Fund  received a warrant to  purchase an
additional 100,000 shares of ZAP, at a price of $6.25 per share which expired in
December 2002.

In the third quarter of 2001,  the Fund entered into an agreement with ZAP which
resulted  in the Fund  selling  all of its ZAP shares to ZAP and  certain of its
shareholders.  In  exchange  for  the  returned  shares,  the  Fund  received  a
$1,500,000  interest  bearing  promissory  note ("note").  The note provided for
installment payments to be made to the Fund until its maturity in 2003. However,
no payments on the note were received and, effective the fourth quarter of 2001,
the Fund wrote down  $1,282,241  to reduce the note to zero based upon the quick
deterioration of ZAP's financial status.

On March 1,  2002,  ZAP filed a  voluntary  petition  for  reorganization  under
Chapter 11 of the U. S. Bankruptcy Code with the U.S.  Bankruptcy Court in Santa
Rosa,  California.  On or  about  July 1,  2003,  the  Second  Amended  Plan for
Reorganization  became  effective and the Fund's note was converted into 994,500
shares of common  stock in the  reorganized  ZAP.  The new shares  are  publicly
traded  but the  shares  issued  to the  Fund,  as well as all  other  unsecured
creditors who opted for an equity interest in the  reorganized  ZAP, are subject
to certain restrictions  (lapsing over specified periods of time), which limited
the ability to transfer or sell such shares and  impaired  its value given ZAP's
history.  Accordingly,  the Fund's policy was to maintain the carrying  value of
the ZAP  securities  at zero until the  restrictions  on the  respective  shares
lapsed.   In  September   2003,  the  Fund,   with  permission  from  ZAP,  sold
approximately 118,000 shares of ZAP to a private individual for $1.00 per share,
which  represented  a  10%  discount  off  the  then  current  market  price  of
unrestricted ZAP shares, and recognized the full proceeds as a realized gain.

During the second  and third  quarters  of 2004,  as 772,500  ZAP shares  became
unrestricted,  the Fund and ZAP  entered  into an  agreement  in which ZAP would
transfer  the  unrestricted  shares  into  the  names  of  the  Fund's  investor
shareholders.  Except for 104,000 shares that became  unrestricted in July 2005,
the transfers were made and the Fund  distributed the share  certificates to its
investor  shareholders.  Accordingly,  the Fund  recorded  the  transfer  of the
772,500 shares of ZAP common

                                      F-16

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                            Page 9
--------------------------------------------------------------------------------

stock as  distributions  to its  investor  shareholders  at the market  value of
$2,078,959 in the second and third quarters of 2004 and recorded a corresponding
realized gain.

As part of the  reorganization of ZAP, the Fund also received a warrant granting
it the right to purchase  another  994,500  ZAP shares at an  exercise  price of
$1.07 per share.  In May 2004,  the Fund  exercised its rights under the warrant
and purchased 994,500  unrestricted  shares at $1.07 per share. During 2004, the
Fund sold all of the shares it purchased  from the exercise of the first warrant
for a gain of  $340,322.  As an incentive to exercise the warrant it received in
the reorganization,  the Fund received a second warrant,  which was exercised in
December 2004,  with the purchase of 538,462 shares at a $3.25 per share.  As of
December 31, 2004, the Fund did not sell any of the shares it purchased from the
exercise of the second  warrant and  recorded an  investment  of  $1,750,000  to
reflect the shares held at market value.  From January 1, 2005 through  December
31, 2005,  the value of the ZAP shares has  declined to $0.26 per share.  During
this period, the Fund has sold 537,000 shares and realized and recognized losses
in the net amount of approximately $940,000.

4.  Long-Term Debt

Following is a summary of long-term debt by project at December 31, 2004:

<TABLE>
<CAPTION>
                                             Ridgewood
                                             Egypt for
                              Sinai       Infrastructure      US Hydro            Total
                          -------------   --------------   -------------     ---------------
<S>                       <C>             <C>              <C>               <C>
Total long-term debt      $   2,252,433   $    1,146,629   $   1,337,277     $     4,736,339
Less - Current maturity        (195,824)        (509,613)       (472,451)         (1,177,888)
                          -------------   --------------   -------------     ---------------
Long-term portion         $   2,056,609   $      637,016   $     864,826     $     3,558,451
                          =============   ==============    ============     ===============
</TABLE>

Sinai has an outstanding loan and interest payable of 13,812,146 Egyptian pounds
(approximately US $2,252,000). The loan bears interest at 11.0% per annum and is
non-recourse  to the Fund. A provision of the loan  restricts  Sinai from paying
dividends to its shareholders or obtaining credit from other banks. The loan was
in default  prior to the  acquisition  of Sinai by  Ridgewood  Near East and has
remained in default through the second quarter of 2005. In the second quarter of
2005,  the bank and Sinai  resolved  all issues  and an  extension  and  revised
payment  schedule was  formalized.  The revised  terms  provide for  progressive
monthly  payments over six years ranging from 171,545 Egyptian pounds to 356,727
Egyptian pounds (or US $29,451 to US $61,243 at loan inception  exchange rates),
including interest, maturing on May 1, 2011.

During the third quarter of 2002,  REFI executed a term loan  agreement with its
principal  bank.  The  bank  provided  a  loan  of  12,500,000  Egyptian  pounds
(approximately  US  $2,022,000),  which  matures on March 31, 2007.  The loan is
being repaid in quarterly  principal  installments  of 781,250  Egyptian  pounds
(approximately  US $126,000)  starting June 2003.  Outstanding  borrowings  bear
interest at the bank's  medium  term loan rate plus 0.5% (12.5% at December  31,
2004 and 2003).

Five of the US Hydro  Projects'  hydro-electric  power  plants are financed by a
term loan ("term  loan").  The Fund has a choice of  variable or fixed  interest
rates on the term loan.  Variable  rates are LIBOR  (2.38% and 1.16% at December
31, 2004 and 2003,  respectively) plus 1 3/4% or the Lenders Corporate Base Rate
(as  defined).  At the Fund's  option,  a fixed  interest  rate can be selected,
payable on any  portion of the debt in excess of  $1,000,000,  for any period of
time  from  two to  seven  years.  Such  fixed  rate  shall be based on the U.S.
Treasury  note rate at the date of election  plus 2 3/4%.  The variable  rate of
4.13% and 2.91% were the effective interest rates at December 31, 2004 and 2003,
respectively.  This credit  facility  is  collateralized  by five  hydroelectric
plants  and  notes  receivable  owned by the US  Hydro  Projects  (See  Note 6).
Although  the Fund is current in its  interest  and  principal  payments,  it is
technically  in default  under the covenants of the term loan as a result of not
providing its lender a copy of its current audited financial statements.  As per
the terms of the term loan  agreement,  the default does not allow the lender to
accelerate or call the loan.

During  the fourth  quarter  of 2003,  discussions  were  entered  into with the
Truckee-Carson  Irrigation District ("TCID") to sell the US Hydro Projects notes
receivable  (see  Note 6) and cash flow  rights  from one of its  projects  (the
Lahontan  project)  to TCID.  In the  first  quarter  of 2004,  TCID's  Board of
Directors  approved the purchase.  In return for its notes  receivable  and cash
flow rights,  the US Hydro Projects  received  $4,000,000.  Pursuant to the term
loan  agreement,  the US Hydro Projects  submitted the proceeds it received from
the sale of the notes receivable  directly to its lender on March 31, 2004. As a
result of the sale and remittance of the proceeds,  the balance of the term loan
was reduced to approximately  $1,700,000.  Of the proceeds received,  $3,958,386
was applied to the principal  balance and the  remaining  $41,614 was applied to
current  interest  due.  The  parties  mutually  agreed  to amend  the term loan
agreement,  providing for a revised amortization of principal for the $4,000,000
received.

As additional compensation to the lender of the U.S. Hydro Projects, the Fund is
required to pay an additional  amount equal to 10% of the cash flow, as defined,
of the financed projects plus 10% of any net proceeds, as defined, from the sale
or  refinancing  of any of the financed  projects.  No additional  payments were
required for the years ended December 31, 2004, 2003 and 2002.

                                      F-17

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 10
--------------------------------------------------------------------------------

Scheduled principal  repayments of the Fund's long-term debt, as revised for the
Sinai loan modification, are as follows:

                   Year Ended
                  December 31,                        Payment
                  ------------                      -----------
                  2005                              $ 1,177,888
                  2006                                1,175,766
                  2007                                  794,121
                  2008                                  324,300
                  2009                                  424,630
                  Thereafter                            839,634
                                                    -----------
                    Total                           $ 4,736,339
                                                    ===========

5.  Lease Commitments

Two of the US Hydro  Projects  hydroelectric  plants have leased the site at its
facility under a long term lease which  terminates in 2024. Rent expense for the
year ended December 31, 2004,  2003 and the period November 23, 2002 to December
31, 2002 was $794,720, $794,720 and $12,083, respectively.

Minimum lease payments are as follows:

                  2005                              $   685,000
                  2006                                  695,000
                  2007                                  700,000
                  2008                                  710,000
                  2009                                  720,500
                  Thereafter                          5,495,977
                                                    -----------
                     Total Minimum Lease Payments   $ 9,006,477
                                                    ===========

The Fund has certain other leases that require contingent payments based upon a
percentage of annual gross revenue of the hydroelectric plant less any taxes or
other fees paid to the lessors. There are no minimum rents required and these
commitments are not included in the amounts presented above. Rent expense for
these hydroelectric plants for the years ended December 31, 2004, 2003 and the
period November 23, 2002 to December 31, 2002 was $6,045, $6,982 and $451,
respectively.

6.  Notes Receivable

The following is a summary of the Fund's notes receivable:

                                                           December 31,
                                                   ---------------------------
                                                       2004            2003
                                                   ---------------------------
Blackstone                                         $ 1,642,009     $         -
TCID                                                         -       3,800,000
Other                                                  125,112         469,020
                                                   ---------------------------
   Total notes receivable                            1,767,121       4,269,020
Less current portion                                   131,399       4,269,020
                                                   ---------------------------
   Notes receivable - long-term portion            $ 1,635,722     $         -
                                                   ===========================

Blackstone

In the fourth  quarter of 2004,  US Hydro  Projects'  Blackstone  entity and New
England Power ("NEP") agreed to terminate  their 1989 power purchase  agreement.
As per the terms of Termination  and Release  Agreement,  Blackstone now has the
right to sell  its  production  of  electricity  to any  party  it  chooses.  In
addition,  beginning  January  2005 NEP will pay  Blackstone  $16,000  per month
through  February 2010 and a lump sum payment of $1,000,000 on February 15, 2010
to compensate  Blackstone for the cancellation of the fifteen years remaining on
the original agreement.

As a result of the new  agreement,  the Fund  recorded a net gain of $564,713 in
the  consolidated  statement of operations in 2004,  reflecting an impairment to
electric power sales contracts of $1,077,296 to write-down the carrying value of
the pre-existing  power purchase  agreement to zero less $1,642,009 to recognize
the present value of payments to be received.

TCID

During 1989, Synergics (Note 3) constructed a hydroelectric  facility ("HF") for
TCID.  The  construction  and term  funding for this plant was provided by (i) a
portion of the secured term loan credit  facility  (see Note 4), the proceeds of
which were

                                      F-18

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 11
--------------------------------------------------------------------------------

originally  paid to a certain US Hydro  Project and then  advanced to Synergics,
(ii) funds from Synergics and (iii) TCID. The HF, after completion,  was sold by
Synergics to TCID.  The sales price of the HF was paid by  assignment  of future
excess cash  flows,  as defined,  to  Synergics  in the form of a long term note
receivable,  which consists of two separate  notes.  As of December 31, 2003 the
long term note  receivable  has been pledged as  additional  collateral  for the
secured term loan credit facility. The amounts initially due from TCID:

       Portion payable over
          15 years at variable interest                        $ 4,000,000

       Portion payable over
          15 years at 15% fixed rate                             2,137,000
                                                               -----------
            Total due                                          $ 6,137,000
                                                               ===========

Upon the Fund's  acquisition of US Hydro in 2002, the then outstanding  balances
of the notes  receivable,  which  accreted  to  approximately  $6,700,000,  were
adjusted  by   approximately   $2,900,000,   through   purchase   accounting  to
approximately  $3,800,000 as of December 31, 2003. In March 2004,  $4,000,000 of
the notes  receivable  were paid by TCID,  the  proceeds  of which were  applied
directly  towards  a  reduction  of the term  loan  (Note 4) and a gain,  net of
professional fees, of $175,000 was recognized accordingly.

7.  Consulting Agreements

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 greater of 0.3% of the capital  cost of
completed  projects  and  $180,000  and  reimbursement  of  out-of-pocket  costs
incurred in performing its duties under the agreement.  The agreement has a term
of  one  year  and is  automatically  renewed  annually.  The  agreement  may be
terminated by either party upon written notice.

In  February  2003,  a  complaint  was filed  against  Ridgewood  Near East by a
corporation  claiming  breach of  consulting  contract.  In November  2003,  the
parties reached an agreement  whereby Ridgewood Near East paid the corporation a
one-time payment of $280,750,  representing  commissions and penalties, and have
agreed to continue  making  required  commission  payments  as per the  original
agreement  of  $900,000  payable in  monthly  installments  of $7,500.  The Fund
recorded the  liability by  discounting  the future  payments at the rate of 10%
resulting in total expense of $567,534 in 2003.

Schedule of future discounted  principal payments as of December 31, 2004 are as
follows:

                 Year Ended
                December 31,                            Payment
                ------------                         ------------
                    2005                             $     40,422
                    2006                                   44,655
                    2007                                   49,331
                    2008                                   54,497
                    2009                                   60,203
                    Thereafter                            264,861
                                                     ------------
                  Total                              $    513,969
                                                     ============

8.  Commitments

In the first quarter of 2005, Ridgewood Near East entered into an agreement with
a former  consultant,  who previously  operated under an arrangement  similar to
terms  defined in Note 7. The new  agreement  provides for a fixed annual fee of
$120,000.

In  accordance  with  Egyptian  company law, the Egypt  Projects  transfer 5% of
annual net profits to a statutory reserve. Transfers will cease when the reserve
reaches  50% of issued  capital.  The  statutory  reserve  is not  eligible  for
distribution to members.  The statutory  reserve amounted to $87,408 and $50,943
as of December 31, 2004 and 2003, respectively.

9.  Fair Value of Financial Instruments

At December 31, 2004 and 2003,  the  carrying  value of the Fund's cash and cash
equivalents,  accounts  receivable,  notes receivable,  and accounts payable and
accrued expenses  approximates their fair value. The fair value of the long-term
debt, calculated using current rates for loans with similar maturities, does not
differ materially from its carrying value.

                                      F-19

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 12
--------------------------------------------------------------------------------

10.  Transactions with Managing Shareholder and Affiliates

The Fund which  closed on April 30,  2000,  operates  pursuant  to a  management
agreement  with RPC, a Managing  Shareholder,  under which RPC  renders  certain
management,  administrative  and advisory services and provides office space and
other facilities to the Fund. As compensation to RPC for such services, the Fund
was initially  obligated for an annual  management fee equal to  $1,645,266,  or
2.5% of the total  capital  contributions  to the Fund payable  monthly upon the
closing of the Fund. For the years ended  December 31, 2004,  2003 and 2002, the
managing shareholder  contemporaneously waived 50% of the management fee due (or
$822,633 annually). Accordingly, management fees of $822,633 were charged to the
Fund for each of the years ended  December  31, 2004,  2003 and 2002.  For 2004,
$317,105 of the 2004  management  fee was paid to the managing  shareholder  and
$505,528 was accrued. For 2003 the Fund paid $150,000 of the 2003 management fee
to the managing  shareholder and the remaining  $672,633 was accrued.  For 2002,
$377,105  of the  2002  management  fee was  paid to  managing  shareholder  and
$445,528 was accrued.  During 2005, the management fee amounts accrued for 2004,
2003, and 2002, aggregating $1,623,690 was forgiven by the managing shareholder.
The aggregate  management fee forgiven was recorded as a capital contribution by
the managing  shareholder in the fourth  quarter of 2005,  who also  anticipates
assigning said contribution for the benefit of the investor shareholders.

The Fund  reimburses  the Managing  Shareholder  and affiliates for expenses and
fees of  unaffiliated  persons  engaged  by the  Managing  Shareholder  for fund
business. The Managing Shareholder or affiliates originally paid all project due
diligence  costs,  accounting  and legal  fees and other  expenses  shown in the
statements of operations and were reimbursed by the Fund.

Under the  Declaration of Trust,  RPC is entitled to receive each year 1% of all
distributions made by the Fund (other than those derived from the disposition of
Fund property) until the shareholders  have been distributed each year an amount
equal  to 12% of their  equity  contribution.  Thereafter,  RPC is  entitled  to
receive 25% of the  distributions for the remainder of the year. RPC is entitled
to receive 1% of the proceeds from  dispositions  of Fund  properties  until the
shareholders  have received  cumulative  distributions  equal to their  original
investment  ("Payout").  After  Payout,  RPC is  entitled  to receive 25% of all
remaining distributions of the Fund.

Income  is  allocated  to the  Managing  Shareholder  until  the  profits  equal
distributions  to the  Managing  Shareholder.  Then,  income is allocated to the
investors,  first among  holders of  Preferred  Participation  Rights until such
allocations equal distributions from those Preferred  Participation  Rights, and
then among Investors 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
Investors and 1% to the Managing Shareholder,  except that if an allocation of a
loss would cause an Investor to have a negative amount in the Investor's capital
account,  the loss will be allocated to the Managing  Shareholder instead in the
amount necessary to prevent the creation of a negative balance in the Investor's
capital  account.  Revenues from  dispositions of Fund Property are allocated in
the same manner as distributions  from such  dispositions.  Amounts allocated to
the  Investors  are  apportioned  among  them in  proportion  to  their  capital
contributions.

Where permitted,  in the event the Managing Shareholder or an affiliate performs
brokering  services  in  respect of an  investment  acquisition  or  disposition
opportunity for the Fund, the Managing  Shareholder or such affiliate may charge
the Fund a brokerage  fee.  Such fee may not exceed 2% of the gross  proceeds of
any such  acquisition  or  disposition.  No such fees  have  been  paid  through
December 31, 2004.

RPC  purchased  one  investor  share of the Fund for  $83,000 in 1998.  The Fund
granted the Managing  Shareholder a single  Management  Share  representing  the
Managing  Shareholder's  management  rights and rights to  distributions of cash
flow.

On  June  26,  2003,  the  Managing  Shareholder  of the  Fund,  entered  into a
$5,000,000  Revolving Credit and Security Agreement with Wachovia Bank, National
Association.  The agreement allows the Managing  Shareholder to obtain loans and
letters of credit for the  benefit of the trusts and funds that it  manages.  As
part of the  agreement,  the Fund agreed to  limitations on its ability to incur
indebtedness,  liens and provide guarantees.  On February 20, 2004, the Managing
Shareholder  and Wachovia  Bank amended the agreement  increasing  the amount to
$6,000,000.  As  described  in Note 14,  the  agreement  has  subsequently  been
extended.

From time to time, the Fund records  short-term  payables and  receivables  from
other  affiliates in the ordinary  course of business.  The amounts  payable and
receivable with the other affiliates do not bear interest.  At December 31, 2004
and 2003, the Fund had outstanding payables and receivables,  with the following
affiliates:

<TABLE>
<CAPTION>
                                                         As of December 31,
                                                 Due From                       Due To
                                       -------------------------------------------------------
                                           2004         2003         2004             2003
                                       -------------------------------------------------------
<S>                                    <C>           <C>          <C>              <C>
Ridgewood Power Management LLC         $       ---   $    1,851   $      326,062   $       ---
Ridgewood Renewable Power                      ---          ---        2,313,732     1,058,204
Trust V                                  1,261,459    1,280,936              ---           ---
Ridgewood Electric Power Trust IV              ---          ---              ---        71,000
Egypt Fund                                     ---          ---          270,389       351,239
United Kingdom Landfill Gas Projects       262,350      595,837              ---           ---
Ridgewood Dubai (paid January 2005)        561,181      612,517              ---           ---
Other affiliates                               ---          ---           89,444       407,951
                                       ------------------------   ----------------------------
Total                                  $ 2,084,990   $2,491,141   $    2,999,627   $ 1,888,394
                                       ========================   ============================
</TABLE>
                                      F-20

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 13
--------------------------------------------------------------------------------

11.  Key Employees Incentive Agreement

The Key  Employees  Incentive  Plan  (the  "Plan")  was  adopted  by the Fund in
February 1998 and permits the Managing  Shareholder  to designate key executives
and  employees  of the Fund and its  operating  companies  to receive  Incentive
Shares. Currently, the Fund does not have any employees.

The Managing Shareholder and persons granted Incentive Shares under the Plan are
entitled to receive a portion of the Fund's cash flow as follows:

                               Prior to Payout*                   After Payout*
                          ---------------------           ---------------------
Net Operating             Managing Shareholder            Managing Shareholder
Cash Flow                             Up to 20%                             20%
after Investors
obtain 12%                   Plan Participants               Plan Participants
cumulative                             Up to 5%                              5%
return

Net Cash                   Managing Shareholder           Managing Shareholder
Flow from                                    1%                             20%
Dispositions                 Plan Participants               Plan Participants
                                          Zero                               5%

      * - Payout is considered to be cumulative distributions to the
      shareholders equal to the original investment.

The Managing  Shareholder and Plan participants will be entitled to cash flow on
a proportionate  basis,  meaning that if the cash flow allocable to them is less
than the  maximum  percentages  stated  in the  table,  that  cash  flow will be
distributed pro rata between the Managing Shareholder and Plan participants.

No  Incentive  Shares  have  been  issued  by the  Managing  Shareholder.  Until
Incentive  Shares are actually issued,  the cash flow, if any,  distributable to
those Shares will be  distributed to the Managing  Shareholder  after the Payout
threshold is reached.

Each issued and outstanding Incentive Share will have voting rights equal to one
Investor Share.

When  approved by  Ridgewood  Near East,  its  subsidiaries  pay 10% of its cash
dividends as profit sharing to its employees.

12.  Financial Information by Business Segment and Location

In 2004,  2003 and 2002,  revenues were recorded from  customers of the US Hydro
Projects and Egypt Projects. The financial statements of the UK Projects and ZAP
are not consolidated with those of the Fund and, accordingly, their revenues are
not considered to be operating revenues.  As of and for the years ended December
31, 2004,  2003 and 2002,  financial  information by geographic  location was as
follows:

<TABLE>
<CAPTION>
                                    2004                        2003                        2002
                         -------------------------   -------------------------   -------------------------
                               US         Egypt           US          Egypt           US          Egypt
                         -----------   -----------   -----------   -----------   -----------   -----------
<S>                      <C>           <C>           <C>           <C>           <C>           <C>
Revenue                  $ 5,096,362   $ 5,488,617   $ 5,844,921   $ 4,399,763   $   371,345   $ 5,459,011
Property, plant
   and equiptment, net     1,691,859    18,985,309     1,734,015    20,867,386     1,777,647    31,214,014
</TABLE>

The Fund has two customers which accounted for  approximately  77% and 80% of US
sourced revenue in 2004 and 2003, respectively. The Fund has two customers which
accounted for  approximately  20%, 19% and 33% of Egypt sourced revenue in 2004,
2003 and 2002, respectively.

The Fund's business  segments were determined  based on similarities in economic
characteristics  and  customer  base.  The Fund's  principal  business  segments
consist of power generation and water desalinization.

                                      F-21

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 14
--------------------------------------------------------------------------------

Common  services  shared by the business  segments are allocated on the basis of
identifiable  direct costs,  time records or in proportion to amount invested in
projects managed by Ridgewood Management.

The financial data for business segments are as follows:

                                      F-22

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 15
--------------------------------------------------------------------------------

                                               Power
                             ------------------------------------------
                                 2004           2003           2002
                             ------------   ------------   ------------

Revenue                      $  5,611,185   $  6,625,810   $  1,742,184
Depreciation and
  amortization                  1,931,580      2,044,067        419,345
Gross profit                    1,566,558      2,478,556        (49,539)
Impairment of intangibles         661,207      2,457,834              -
Interest expense                   85,875        204,173         22,320
Plant and equipment and
  office equipment, net         7,125,165      7,637,620     11,514,945
Capital expenditures               58,202          5,954          1,143
Goodwill                        4,491,938      5,153,145              -

                                               Water
                             ------------------------------------------
                                 2004           2003           2002
                             ------------   ------------   ------------

Revenue                      $  4,973,794   $  3,618,874   $  4,088,172
Depreciation and
  amortization                  1,379,455      1,285,564      1,395,198
Gross profit                    1,264,786        922,384        738,695
Impairment of intangibles               -              -              -
Interest expense                  331,661        325,800        574,480
Plant and equipment and
  office equipment, net        12,913,340     13,656,329     19,009,864
Capital expenditures              226,060        344,679        856,648
Goodwill                                -              -              -

                                              Corporate
                             ------------------------------------------
                                 2004           2003           2002
                             ------------   ------------   ------------

Revenue                      $          -   $          -   $          -
Depreciation and
  amortization                    247,957        298,607        262,396
Gross profit                     (247,957)      (298,607)      (262,396)
Impairment of intangibles               -              -              -
Interest expense                  271,900        330,686        390,802
Plant and equipment and
   office equipment, net          579,840        708,572        922,941
Capital expenditures               33,120          9,377        209,599
Goodwill                                -              -              -

                                               Total
                             ------------------------------------------
                                 2004          2003            2002
                             ------------   ------------   ------------

Revenue                      $ 10,584,979   $ 10,244,684   $  5,830,356
Depreciation and
  amortization                  3,558,992      3,628,238      2,076,939
Gross profit                    2,583,387      3,102,333        426,760
Impairment of intangibles         661,207      2,457,834              -
Interest expense                  689,436        860,659        987,602
Plant and equipment and
   office equipment, net       20,618,345     22,002,521     31,447,750
Capital expenditures              317,382        360,010      1,067,390
Goodwill                        4,491,938      5,153,145              -

                                      F-23

<PAGE>

The Ridgewood Power Growth Fund
Notes to the Consolidated Financial Statements                           Page 16
--------------------------------------------------------------------------------

13. Income Taxes

The provision for income taxes consists of:

                         2004                2003                  2002
                   ----------------    ----------------    -------------------
     Current
        Federal    $            ---    $            ---    $               ---
        State               176,050             263,934                 12,622
                   ----------------    ----------------    -------------------
                            176,050             263,934                 12,622
                   ----------------    ----------------    -------------------
     Deferred
        Federal    $       (928,545)   $     (1,209,098)   $               ---
        State               124,843            (108,580)
                   ----------------    ----------------    -------------------
                           (803,702)         (1,317,678)                   ---
                   ----------------    ----------------    -------------------
                   $       (627,652)   $     (1,053,744)   $            12,622
                   ================    ================    ===================

The Fund incurred  current state income taxes of $176,050,  $263,934 and $12,622
for the years ended December 31, 2004, 2003 and 2002, respectively, on behalf of
certain of the US Hydro Projects.  For the year ended December 31, 2004 and 2003
the Fund  recorded  a  deferred  federal  income tax  benefit  of  $928,545  and
$1,209,098,  respectively, and deferred state income tax expense of $124,843 and
a tax benefit of $108,580,  respectively,  which  reflects the change in the net
tax effects of temporary  differences between the carrying amounts of assets and
liabilities  of the US Hydro Projects for financial  reporting  purposes and the
amounts  used for  income tax  purposes.  At  December  31,  2004,  the Fund had
approximately  $5,423,000 in net  operating  losses carry  forwards  expiring in
2024.

Components  of the Fund's  deferred  income tax  assets and  liabilities  are as
follows:

                                                     2004            2003
                                                 ------------    ------------
Deferred tax asset-current
    Carrying value of TCID note receivable       $         --    $  1,435,129
                                                 ============    ============

Deferred tax asset-non current
    Net operating losses                         $  1,850,954    $         --

Deferred tax liabilities-non current
    Depreciation and amortization                  (5,438,221)     (5,826,098)
                                                 ------------    ------------

Deferred tax liabilities, net-non current        $ (3,587,267)   $ (5,826,098)
                                                 ------------    ------------

14. Subsequent Events

Effective   January  1,  2005,   the   Managing   Shareholder,   acting  on  the
recommendation of tax counsel for the Fund,  amended the Declaration of Trust in
order to clear up  potential  ambiguity  and to  maintain  the tax status of the
Fund.  The  Declaration   authorizes  the  Managing  Shareholder  to  make  such
amendments to the Declaration  without notice to or approval of the Investors in
a  variety  of  circumstances,  including,  without  limitation,  amendments  to
maintain the tax status of the Fund.

Under the terms of the  amendment,  if an Investor's  Adjusted  Capital  Account
would become  negative  using General  Allocations,  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 will not affect the allocation of cash
which was not affected by the amendment.

The  Managing  Shareholder  has  reviewed  the  amendments  to  the  Declaration
recommended by tax counsel for the Fund, and has concluded that the amendment of
the  Declaration  will not materially and adversely  affect the interests of the
Investors in the Fund.

During 2005,  Wachovia Bank agreed to further extend the Managing  Shareholder's
Line of credit, as described in Note 10, through September 30, 2006.

                                      F-24

<PAGE>

B. Supplementary Financial Information

Selected Quarterly Financial Data for the years ended December 31, 2004 and 2003
(Unaudited).

                                                  2004
-------------------------------------------------------------------------------
                             First        Second         Third         Fourth
                            quarter       Quarter       Quarter        Quarter
-------------------------------------------------------------------------------
Revenue                   $ 2,665,000   $ 3,123,000   $ 2,529,000   $ 2,268,000
-------------------------------------------------------------------------------
Gross profit                  929,000     1,087,000       211,000       356,000
-------------------------------------------------------------------------------
Income (loss) from
   operations                  20,000       135,000      (372,000)   (1,206,000)
-------------------------------------------------------------------------------
Net (loss) income            (211,000)    1,486,000       307,000      (937,000)
-------------------------------------------------------------------------------

                                                  2003
-------------------------------------------------------------------------------
                             First         Second        Third         Fourth
                            Quarter       Quarter       Quarter       Quarter
-------------------------------------------------------------------------------
Revenue                   $ 2,701,000   $ 2,987,000   $ 2,336,000   $ 2,221,000
-------------------------------------------------------------------------------
Gross profit (loss)         1,286,000     1,508,000       838,000      (530,000)
-------------------------------------------------------------------------------
Income (loss) from
   operations                 184,000       718,000       145,000    (5,657,000)
-------------------------------------------------------------------------------
Net loss                     (292,000)     (326,000)     (164,000)   (3,008,000)
-------------------------------------------------------------------------------

See Item 7.  'Management's  Discussion  and Analysis of Financial  Condition and
Results Operation' for discussion regarding interim periods.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

      The  Fund  dismissed   PricewaterhouseCoopers   LLP  as  its   independent
accountants on January 14, 2004 and appointed  Perelson Weiner LLP as successor,
as reported in the Fund's  Current  Report on Form 8-K dated  January 14,  2004,
incorporated   herein  by   reference.   There   were  no   disagreements   with
PricewaterhouseCoopers  LLP for the  year  ended  December  31,  2002 or for the
interim period through January 14, 2004, whether or not resolved,  on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing  scope  or  procedure,  which  disagreements  if  not  resolved  to the
satisfaction  of  PricewaterhouseCoopers  LLP  would  have  caused  them to make
reference thereto in their report on the financial statements for such years.

Item 9A. Controls and Procedures.

      In accordance  with Rule 13a-15(b)  under the  Securities  Exchange Act of
1934, as amended (the "Exchange Act"), our management with the  participation of
our  Chief  Executive  Officer  and  Chief  Financial  Officer,   evaluated  the
effectiveness of our disclosure controls and procedures as of December 31, 2004.
The system of  disclosure  controls and  procedures  was designed to ensure that
information  required to be disclosed by us in this report and other  reports we
file under the Exchange Act are  recorded,  processed,  summarized  and reported
within the time  periods  specified  in the  applicable  rules and  forms.  This
includes  disclosure controls and procedures designed to ensure that information
required to be disclosed by us is  accumulated  and  communicated  to our senior
management so as to allow timely decisions  regarding required  disclosure.  Our
evaluation  disclosed  material  deficiencies  in our  disclosure  controls  and
procedures.  The material deficiencies identified as of December 31, 2004 are as
follows:

      (a)   Accounting  Systems  and  Financial  Reporting  Software.   We  have
            concluded  that  the  lack  of  automation  and  integration  in our
            accounting systems and financial  reporting software utilized during
            2004 did not permit us to timely comply with our financial reporting
            responsibilities  for  2004.  In 2003 we  began to  address  this by
            arranging  for  the  replacement  of our  then  existing  accounting
            systems and financial  reporting software.  However,  the process of
            migrating  from the then  existing  systems and  software to the new
            systems and software was not completed until the latter part of 2004
            and  we did  not  have  the  full  benefit  of  the  automation  and
            integration  features of the new system and  software for that year.
            We believe that the new accounting  systems and financial  reporting
            software  constitute a  significant  improvement  in our  disclosure
            controls and procedures but a

                                       23

<PAGE>

            comprehensive  assessment of the effectiveness of these improvements
            can  only be made in  subsequent  periods  when  the new  accounting
            systems and financial reporting software have been fully implemented
            and are fully operational.

      (b)   Personnel Resources.  We have determined that additional  accounting
            and financial  reporting staff with relevant experience is necessary
            to maintain  and operate the new  accounting  systems and  financial
            reporting   software  and  to  develop  and  administer   additional
            disclosure  controls and  procedures to enable us to comply with our
            financial  reporting  obligations.  The  following  changes  in  our
            staffing have occurred:

                  (i.) Five existing accounting  positions and one legal support
                  staff  position have been upgraded by staffing with  personnel
                  having enhanced experience and/or training;

                  (ii.)  Two new  accounting  positions  have been  created  and
                  filled;

                  (iii.) A new full-time  Director of  Compliance  and Reporting
                  position has been created and filled;

                  (iv.) A new full-time Director of Tax Reporting and Compliance
                  position  has been  created  and filled  and  replaces a prior
                  part-time consulting arrangement; and

                  (v.) The Chief  Financial  Officer was replaced by a new Chief
                  Financial Officer.

      We believe that the  substantial  upgrades and expansion of the accounting
and  financial  reporting  staff and legal support staff will result in material
improvements in our disclosure  controls and  procedures,  but the evaluation of
these  new  personnel  upgrades  and  additions  can only be made in  subsequent
periods when we review personnel performance under these new arrangements.

      (c)   Additional  Disclosure  Controls and Procedures.  We have determined
            that additional disclosure controls and procedures are necessary for
            our US  operations  to  ensure  that  we  will  meet  our  financial
            reporting  and  disclosure  obligations  in an  accurate  and timely
            manner. We implemented the following additional  disclosure controls
            and procedures with respect to the US operating  facilities in which
            we have an ownership interest:

                  (i) Weekly budgeting of cash receipts and disbursements with a
                  roll-forward of budgets based on actual results;

                  (ii)   Formal   procedures   to   evaluate   new   contractual
                  arrangements  and amendments  and/or  terminations of existing
                  contractual  arrangements and to provide accounting  personnel
                  with supporting analysis and documentation;

                  (iii) Adoption of a  standardized  format for the reporting of
                  the  output,  sales,  prices and  expenses  for the  operating
                  facilities in which we have an ownership interest; and

                  (iv) For  facilities  having  material  amounts of  inventory,
                  adoption of formal procedures for quarterly physical inventory
                  observations  with  corresponding   adjustments  to  financial
                  statements.

      We believe that these additional  disclosure  controls and procedures have
addressed the material  deficiencies in disclosure  controls and procedures that
we have previously identified,  but we believe that the internal control process
is constantly  evolving and we expect that  additional  disclosure  controls and
procedures  will be added  from  time to time as  deficiencies  are  discovered.
Evaluation  of the  effectiveness  of these  enhanced  disclosure  controls  and
procedures must wait until later periods when we will have the ability to review
the results of these controls and procedures in operation.

      (d)   Foreign  Operations.  We have interests in foreign operations in the
            United  Kingdom  and  Egypt.  Each of these  foreign  operations  is
            managed by a separate  in-country  staff that  includes  management,
            accounting,  engineering and support personnel. Each of the U.K. and
            Egyptian  operations  delivers  to us audited  financial  statements
            prepared in  accordance  with the legal  requirements  and  auditing
            standards  of the  U.K.  or  Egypt,  as the  case  may  be.  We have
            concluded that there exist material  deficiencies  in our disclosure
            controls and procedures as applied to these foreign  operations,  as
            follows:

                  (i)   The audited financial statements for the U.K. operations
                        were not timely  delivered  to us because of an extended
                        review  of  the  proposed  U.K.   accounting   treatment
                        applicable to a material  financing  transaction  of the
                        U.K.  operations.  This delay in the receipt of the U.K.
                        audited financial statements

                                       24

<PAGE>

                        contributed  to our delay in  completing  our  financial
                        statements  for the year ended  December  31,  2003.  In
                        2004, we implemented  additional  procedures relating to
                        the preparation of the U.K.  financial  statements,  and
                        the  2004  audited  financial  statements  of  the  U.K.
                        operations  for the year ended  December  31,  2004 were
                        delivered to us in a timely manner.

                  (ii)  Disclosure  controls  and  procedures  in  the  Egyptian
                        operations  relating to the administration and reporting
                        of contractual  relationships  were not properly applied
                        during 2004, with the result that a contingent guarantee
                        by  an  Egyptian   parent   entity  of  a   subsidiary's
                        obligations  was not  properly  disclosed  and  thus not
                        reported on the books and records of the Egyptian parent
                        entity.  We have  taken  steps to  establish  additional
                        disclosure  controls  and  procedures  to ensure  timely
                        disclosure  and  recording of all  material  contractual
                        arrangements.  In  addition,  the  then  existing  Chief
                        Executive Officer and the Chief Financial Officer of the
                        Egyptian operations have been replaced.  We believe that
                        these   actions   address   the   identified    material
                        deficiencies  in our disclosure  controls and procedures
                        in the Egyptian operations.  However,  assessment of the
                        effectiveness   of  these   actions   must  wait   until
                        subsequent   periods   when  we  can   assess   the  new
                        personnel's performance under these new procedures.

            (e)   We have concluded that our disclosure  controls and procedures
                  relating to the  reporting  and  analysis of material  events,
                  including those requiring disclosure on Form 8-K or otherwise,
                  were not  effective in all  circumstances  to ensure that such
                  events  were  brought  to the  attention  of  the  appropriate
                  personnel  in a timely and  accurate  fashion.  In response to
                  this deficiency,  we have  established a Disclosure  Committee
                  consisting of the Chief Executive Officer, the Chief Financial
                  Officer  and the  General  Counsel to review  events  that may
                  require   disclosure  by  us.  In  addition,   the  Disclosure
                  Committee has  promulgated  reporting  procedures  under which
                  operating  personnel  are  required  to inform the  Disclosure
                  Committee  of material  events.  We believe  that the use of a
                  Disclosure  Committee  and reporting  procedures  for material
                  events addresses the deficiency in our disclosure controls and
                  procedures  relating to events that may require disclosure and
                  will  allow us to make  timely  decisions  regarding  required
                  disclosures.

            (f)   Additional  Reviews.  We have retained an  accounting  firm to
                  undertake an independent review of our disclosure controls and
                  procedures  and to report the results of such review to us. We
                  expect to receive  such  report  during the second  quarter of
                  2006.

      As a result,  our management  under the supervision of our Chief Executive
Officer,  has  evaluated  the  effectiveness  of  our  disclosure  controls  and
procedures as of the end of the period  covered by this report  pursuant to Rule
13a-15(b) under the Exchange Act and concluded that, as of the end of the period
covered by this report,  our disclosure  controls and procedures did not provide
reasonable assurance of effectiveness because of the material deficiencies noted
above.

      Other  than the  changes  discussed  above,  there  were no changes in our
internal control over financial  reporting during the quarter ended December 31,
2004 that have materially affected, or are reasonably like to materially affect,
our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

   General.

      Each of the two entities  that  function  together as the Fund's  Managing
Shareholder,  Ridgewood Power and Power VI, are controlled by Robert E. Swanson,
who is the manager,  chairman, and, together with his family trusts, owns all of
the membership  interests of each entity.  The officers of Power VI are the same
as those of  Ridgewood  Power,  and  Power VI  currently  does not  conduct  any
business.  Ridgewood  Power  takes all  actions  necessary  to manage  the Fund,
without any participation by Power VI. As a result,  Ridgewood Power effectively
serves as the  Managing  Shareholder  of the Fund.  Please  see chart  below for
information regarding executive officers.

      The Fund  does not have a board of  directors  nor an audit  committee  or
nominating committee as contemplated by the Sarbanes-Oxley Act of 2002. Instead,
the Managing  Shareholder  effectively  performs the functions that the board of
directors or the audit or nominating committee would otherwise perform.

                                       25

<PAGE>

      As Managing Shareholder of the Fund, Ridgewood Power has direct and
exclusive discretion in management and control of the affairs of the Fund. The
Managing Shareholder may resign as Managing Shareholder of the Fund only (i)
with cause (which cause does not include the fact or determination that
continued service would be unprofitable to the Managing Shareholder), or (ii)
without cause with the consent of a majority in interest of the Investors. The
Managing Shareholder may be removed as managing shareholder as provided in the
Declaration.

      The purpose for having two managing shareholders was to have continuity of
management  related  to  certain  transactions  that were  considered  regarding
combination  of  Power I  through  Power V to  combine  into a  publicly  traded
business. That transaction did not occur and Power VI assigned and delegated all
of its rights and  responsibilities  to Ridgewood  Power and is  essentially  an
entity that contains nominal activity.

Managing Shareholder.

      Ridgewood  Power  Corporation  was  incorporated  in  February  1991  as a
Delaware corporation for the primary purpose of acting as a managing shareholder
of  the  business  of  funds  and  as a  managing  general  partner  of  limited
partnerships.  Ridgewood  Power  Corporation  organized  the Fund  and  acted as
managing  shareholder  until April 1999.  On or about April 21, 1999,  Ridgewood
Power  Corporation was merged into the current Managing  Shareholder,  Ridgewood
Power LLC. In December 2002,  Ridgewood Power, LLC changed its name to Ridgewood
Renewable Power, LLC. Robert E. Swanson is the controlling  member, sole manager
and  Chairman of the  Managing  Shareholder.  All of the equity in the  Managing
Shareholder  is owned by Mr.  Swanson or by family  trusts.  Mr. Swanson has the
power on behalf of those  trusts to vote or  dispose  of the  membership  equity
interests owned by them.

      The  Managing  Shareholder  has also  organized  the other Power Trusts as
Delaware  business trusts or Delaware  limited  liability  companies.  Ridgewood
Renewable Power LLC is the managing  shareholder of the Other Power Trusts which
are business trusts and the manager of the limited liability companies which are
Power Trusts. The business objectives of these Other Power Trusts are similar to
those of the Fund.

      A number of other companies are affiliates of Mr. Swanson and Ridgewood
Power. Each of these also was organized as a corporation that was wholly-owned
by Mr. Swanson. In April 1999, most of them were merged into limited liability
companies with similar names and Mr. Swanson became the sole manager and
controlling owner of each limited liability company. For convenience, the
remainder of this Annual Report on Form 10-K will discuss each limited liability
company and its corporate predecessor as a single entity.

      The Managing  Shareholder is an affiliate of Ridgewood Energy  Corporation
("Ridgewood  Energy"),  which organizes and operates limited  partnership  funds
that have  invested in oil and natural gas  drilling  and  completion  and other
related  activities.  Other  affiliates  of  the  Managing  Shareholder  include
Ridgewood Securities LLC ("Ridgewood Securities"), an NASD member which has been
the  placement  agent for the private  placement  offerings  of the eight trusts
sponsored  by the  Managing  Shareholder  and the funds  sponsored  by Ridgewood
Energy; Ridgewood Capital Management LLC ("Ridgewood Capital"), which assists in
offerings  made by the  Managing  Shareholder  and which is the  sponsor of four
privately  offered venture capital funds (the Ridgewood Capital Venture Partners
and  Ridgewood  Capital  Venture  Partners  II  funds);  and RPM.  Each of these
companies is  controlled  by Robert E.  Swanson,  who is their sole  director or
manager.

      Set forth below is certain  information  concerning  Mr. Swanson and other
executive officers of the Fund and the Managing Shareholder.

Name               Age  Position with Registrant                  Officer Since
-----------------  ---  ----------------------------------------  -------------

Randall D. Holmes   58  President and Chief  Executive  Officer        2004
                        of   the   Fund   [and   the   Managing
                        Shareholder]  since  January  3,  2006;
                        Chief  Operating  Officer  of the  Fund
                        from  January  1,  2004 to  January  3,
                        2006.

Robert E. Swanson   58  Chairman  of the Fund since  January 1,        1991
                        2006;  President  and  Chief  Executive
                        Officer  of the Fund  from  1991  until
                        January   3,   2006;   Manager,   Chief
                        Executive  Officer,  and, together with
                        his family trusts,  owner of all of the
                        membership  interests  in the  Managing
                        Shareholder.

                                       26

<PAGE>

Robert L. Gold      47  Executive  Vice  President  of the Fund        1991
                        and  the  Managing   Shareholder  since
                        1991.

Daniel V. Gulino    44  Senior  Vice   President   and  General        2000
                        Counsel  of the Fund  and the  Managing
                        Shareholder.

Douglas R. Wilson   46  Senior   Vice   President   and   Chief        2005
                        Financial  Officer of the Fund [and the
                        Managing Shareholder] since 2005

      Robert E. Swanson, age 58, currently serves as a Chairman of the Fund. Mr.
Swanson  has also  served  as Chief  Executive  Officer  of the Fund  since  its
inception in 1991 and as Chief Executive Officer of RPM, the Other Power Trusts,
and the Ridgewood  LLCs since their  respective  inceptions  through  January 3,
2006.  Mr.  Swanson has been  President  and  registered  principal of Ridgewood
Securities  and became the  Chairman  of the Board of  Ridgewood  Capital on its
organization in 1998. In addition, he has been President and sole stockholder of
Ridgewood Energy since its inception in October 1982. Prior to forming Ridgewood
Energy in 1982,  Mr.  Swanson  was a tax  partner at the former New York and Los
Angeles  law firm of Fulop & Hardee and an  officer in the Trust and  Investment
Division of Morgan Guaranty Trust Company.  His specialty is in personal tax and
financial  planning,  including  income,  estate and gift tax. Mr.  Swanson is a
member of the New Jersey  State Bar, 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.

      Randall D.  Holmes,  age 58, has served as President  and Chief  Executive
Officer of the Fund since January 3, 2006 and served as Chief Operating  Officer
of the Fund from January 1, 2004 until January 3, 2006. Mr. Holmes has served as
the President and Chief Operating Officer of the Managing Shareholder,  RPM, the
Trust,  the Other Power  Trusts and the  Ridgewood  LLCs since  January 1, 2004.
Prior to such time, Mr. Holmes served as the primary  outside counsel to and has
represented the Managing  Shareholder and its affiliates  since 1991. Mr. Holmes
has  over  30  years  of  acquisition,   development,  financing  and  operating
experience  in  the  electric  generation  and  other  industries.   Mr.  Holmes
previously  was  counsel to Downs  Rachlin  Martin PLLC in Vermont  ("DRM"),  to
DeForest & Duer in New York and to  Chadbourne & Parke in New York.  Mr.  Holmes
was also  President  of the  Pepsi-Cola  Operating  Company  of  Chesapeake  and
Indianapolis  and was Vice President of Advanced  Medical  Technologies.  He was
also a Partner  with the New York law firm of  Barrett  Smith  Schapiro  Simon &
Armstrong where he specialized in financing  transactions,  acquisitions and tax
planning.  DRM is one of the  primary  outside  counsel  to the  Fund,  Managing
Shareholder and their affiliates. Immediately prior to being appointed President
and Chief Operating Officer,  Mr. Holmes was counsel to DRM. He has maintained a
minor consulting  relationship with DRM in which he may act as a paid advisor to
DRM on certain matters that are unrelated to Ridgewood.  Such  relationship will
not require a  significant  amount of Mr.  Holmes' time and it is expected  that
such  relationship  will not adversely  affect his duties as President and Chief
Executive  Officer.  Mr. Holmes is a graduate of Texas Tech  University  and the
University of Michigan Law School. He is a member of the New York State bar.

      Robert L. Gold,  age 47, has served as  Executive  Vice  President  of the
Managing  Shareholder,  RPM,  the Fund,  and the Other Power  Trusts since their
respective   inceptions,   with  primary   responsibility   for   marketing  and
acquisitions.  He has been President of Ridgewood Capital since its organization
in 1998.  He has served as Vice  President  and  General  Counsel  of  Ridgewood
Securities  Corporation  since he joined the firm in December 1987. Mr. Gold has
also served as Executive Vice President of Ridgewood  Energy since October 1990.
He served as Vice  President  of  Ridgewood  Energy from  December  1987 through
September  1990.  For the two  years  prior  to  joining  Ridgewood  Energy  and
Ridgewood Securities  Corporation,  Mr. Gold was a corporate attorney in the law
firm of Cleary, Gottlieb, Steen & Hamilton in New York City where his experience
included mortgage finance,  mergers and acquisitions,  public offerings,  tender
offers,  and other business legal matters.  Mr. Gold is a member of the New York
State bar. He is a graduate of Colgate University and New York University School
of Law.

      Douglas R. Wilson,  age 46, was appointed  Senior Vice President and Chief
Financial  Officer of RPM, the Fund,  the Other Power  Trusts and the  Ridgewood
LLCs as of April 15, 2005.  Mr.  Wilson has been  associated  with the Ridgewood
group of companies as a consultant and advisor since 1996 performing  investment
evaluation,  structuring  and execution  services for the Other Power Trusts and
for  Ridgewood  Venture  Funds.  Since May of 2002 Mr.  Wilson  has  served as a
Director,  CEO and Finance Director for CLP Envirogas Ltd.  ("Envirogas")  which
manages  Ridgewood's  UK landfill  gas  operations.  Mr.  Wilson has wide energy
industry  experience  including  hydrocarbon  and  project  finance  lending and
investing

                                       27

<PAGE>

and has  participated  in over $1 billion of financings.  During his 22 years in
the  financial  services  industry  Mr.  Wilson has been with  Republic  Bank of
Dallas,  Shearson-Lehman Brothers and Bank of Tokyo. Mr. Wilson is a graduate of
the  University of Texas at Arlington and has an MBA from the Wharton  School at
the University of Pennsylvania.  It is anticipated that Mr. Wilson will continue
to serve as an executive  and Director of Envirogas  during the remainder of its
expansion phase which is estimated to be completed in 18-24 months.  During this
period Mr. Wilson will devote approximately 20-25% of his time to the affairs of
Envirogas.  It is not  anticipated  that this  executive  role at Envirogas will
adversely  affect  performance  of his duties as Senior Vice President and Chief
Financial Officer.

      Daniel V.  Gulino,  age 44, has been  Senior  Vice  President  and General
Counsel of the Managing Shareholder, RPM, the Fund, and other Power Trusts since
August 2000. He began his legal career as an associate for Pitney,  Hardin, Kipp
& Szuch, a large New Jersey law firm,  where his experience  included  corporate
acquisitions and  transactions.  Prior to joining  Ridgewood group of companies,
Mr. Gulino was in-house counsel for several large electric utilities,  including
GPU,  Inc.,  Constellation  Power  Source,  and PPL  Resources,  Inc.,  where he
specialized  in non-utility  generation  projects,  independent  power and power
marketing  transactions.  Mr. Gulino also has  experience  with the electric and
natural gas  purchasing of industrial  organizations,  having worked as in-house
counsel for Alumax, Inc. (now part of Alcoa) where he was responsible for, among
other things,  Alumax's electric and natural gas purchasing program.  Mr. Gulino
is a member of the New Jersey  State Bar and  Pennsylvania  State  Bar.  He is a
graduate of Fairleigh Dickinson  University and Rutgers University School of Law
- Newark.

  Management Agreement.

      The  Fund has  entered  into a  Management  Agreement  with  the  Managing
Shareholder  detailing  how the  Managing  Shareholder  will render  management,
administrative  and investment  advisory services to the Fund under the terms of
the Declaration. Specifically, the Managing Shareholder will perform (or arrange
for the performance of) the management and administrative  services required for
the  operation  of the Fund.  Among other  services,  they will  administer  the
accounts and handle  relations with the Investors,  provide the Fund with office
space,  equipment and facilities and other services  necessary for its operation
and conduct the Fund's  relations with  custodians,  depositories,  accountants,
attorneys,  brokers and  dealers,  corporate  fiduciaries,  insurers,  banks and
others,  as required.  The Managing  Shareholder  will also be  responsible  for
making investment and divestment.

      The Managing  Shareholder will be obligated to pay the compensation of the
personnel and all  administrative  and service expenses necessary to perform the
foregoing  obligations.  The  Fund  will pay all  other  expenses  of the  Fund,
including  transaction  expenses,  valuation  costs,  expenses of preparing  and
printing  periodic  reports for Investors and the  Commission,  postage for Fund
mailings,  Commission fees,  interest,  taxes, legal,  accounting and consulting
fees, litigation expenses,  expenses of operating Projects and costs incurred by
the Managing  Shareholder in so doing and other expenses properly payable by the
Fund. The Fund  reimburses the Managing  Shareholder for all such Fund and other
expenses paid by it.

      The  responsibilities  of  the  Managing  Shareholder  and  the  fees  and
reimbursements  of expenses  it is  entitled to are set out in the  Declaration.
Each  Investor  consented  to the terms and  conditions  of the  Declaration  by
subscribing to acquire Investor Shares in the Fund.

      The Fund has relied and will continue to rely on the Managing Shareholder,
engineering,  legal,  investment banking and other  professional  consultants as
needed and to monitor and report to the Fund the matters  concerning  operations
of Projects in which it invests,  review proposals for additional development or
financing,  and  represent  the  Fund's  interests.  The Fund  will rely on such
persons to review  proposals  designed to sell its  interests in Projects in the
future.

  Executive Officers of the Fund.

      Pursuant  to the  Declaration,  the  Managing  Shareholder  has  appointed
officers of the Fund to act on behalf of the Fund and sign  documents  on behalf
of the Fund as authorized by the Managing Shareholder. Mr. Swanson serves as the
Chairman of the Fund and the other executive  officers of the Fund are identical
to those of the  Managing  Shareholder,  as  indicated  in the  table  under the
subheading Managing Shareholder above.

      The  officers  have the duties and powers  usually  applicable  to similar
officers  of a Delaware  business  corporation  in carrying  out Fund  business.
Officers  act under the  supervision  and control of the  Managing  Shareholder,
which is entitled to remove any officer at any time. Unless otherwise  specified
by the Managing Shareholder,  the President of the Fund has full power to act on
behalf of the Fund. The Managing Shareholders expects that most actions taken in
the  name of the  Fund  will be taken by Mr.  Swanson  and the  other  principal
officers in their  capacities as officers of the Fund under the direction of the
Managing Shareholder rather than as officers of the Managing Shareholder.

                                       28

<PAGE>

  Corporate Trustee.

      The corporate trustee of the Fund,  Christiana Bank & Trust Company,  acts
on the  instructions  of the Managing  Shareholder and is not authorized to take
independent  discretionary  action on behalf of the Fund.  Legal  title to Trust
Property is in the name of the Fund.  Christiana  is also a trustee of the Other
Power  Trusts.  The  principal  office of  Christiana  Bank is 1314 King Street,
Wilmington, DE 19801.

  Section 16(a) Beneficial Ownership Reporting Compliance.

      The individuals who are subject to the requirements of Section 16(a) have
not complied with those reporting requirements during 2004 and 2003. All
fillings required under Section 16(a), have since been filed with the
Commission.

  RPM.

      RPM is  controlled  by Robert E.  Swanson  and owned by him and his family
trusts.   For  US  Projects  for  which  the  Fund  decides  to  take  operating
responsibility  itself,  the Fund will cause the Fund's subsidiary that owns the
Project to enter  into an  "Operation  Agreement"  under  which  RPM,  under the
supervision  of  the  Managing   Shareholder,   will  provide  the   management,
purchasing,  engineering,  planning and administrative services for the Project.
RPM will  charge  the Fund at its cost for  these  services  and for the  Fund's
allocable amount of certain overhead items. RPM shares space and facilities with
the Managing Shareholder and its affiliates.  To the extent that common expenses
can be  reasonably  allocated to RPM, the Managing  Shareholder  may, but is not
required to,  charge RPM at cost for the  allocated  amounts and such  allocated
amounts will be borne by the Fund and other  programs.  Common expenses that are
not so allocated will be borne by the Managing Shareholder.

      The Managing  Shareholder does not charge RPM for the full amount of rent,
utility  supplies  and office  expenses  allocable  to RPM.  As a result,  RPM's
charges for its services to the Fund are likely to be  materially  less than its
economic costs and the costs of engaging  comparable  third persons as managers.
RPM will not receive any compensation in excess of its costs.

      Allocations  of costs  will be made  either on the  basis of  identifiable
direct costs,  time records or in proportion to each  program's  investments  in
Projects  managed by RPM; and  allocations  will be made in a manner  consistent
with generally accepted accounting principles.

      RPM will not provide any  services  related to the  administration  of the
Fund, such as investment,  accounting, tax, investor communication or regulatory
services,  nor will it  participate  in  identifying,  acquiring or disposing of
Projects.  RPM will not have the power to act in the Fund's  name or to bind the
Fund,  which  will  be  exercised  by the  Managing  Shareholder  or the  Fund's
officers.

      The Operation Agreements will not have a fixed term and will be terminable
by RPM,  by the  Managing  Shareholder  or by vote of a majority  in interest of
Investors,  on 60 days' prior notice. The Operation Agreements may be amended by
agreement of the  Managing  Shareholder  and RPM;  however,  no  amendment  that
materially  increases the obligations of the Fund or that  materially  decreases
the  obligations  of RPM shall  become  effective  until at least 45 days  after
notice of the amendment,  together with the text thereof,  has been given to all
Investors.

      The  executive  officers  of RPM  the  same  as  those  for  the  Managing
Shareholder.

  Code of Ethics.

      In March  2004,  the  Managing  Shareholder,  for itself and for the Fund,
Other  Power  Trusts,  Ridgewood  LLCs and their  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 will be
provided  to any  person  without  charge,  upon  written  request  made  to The
Ridgewood  Power Growth Fund, 947 Linwood  Avenue,  Ridgewood,  New Jersey 07450
Attn: Daniel V. Gulino.

                                       29

<PAGE>

  Audit Committee Financial Expert.

      The Fund  has  neither  a board of  directors  nor an audit  committee  as
contemplated  by the  Sarbanes-Oxley  Act of  2002  and  instead,  the  Managing
Shareholder  effectively  performs the functions  that the board of directors or
the audit committee would otherwise perform.  However,  the Managing Shareholder
has determined  that Douglas R. Wilson,  who serves as Senior Vice President and
Chief  Financial  Officer  of the Fund and the Chief  Financial  Officer  of the
Managing Shareholder qualifies as an audit committee financial expert as defined
in Item 401(h)(2) of Regulation S-K.

Item 11. Executive Compensation.

      None of the  executive  officers  of the  Fund  receive  any  compensation
directly  from the Fund.  The  Managing  Shareholder  compensates  the  officers
without  additional  payments by the Fund.  The Fund  reimburses RPM at cost for
services provided by RPM's employees.  Information as to the fees payable to the
Managing  Shareholder  and certain  affiliates is contained at Item 13.  Certain
Relationships and Related Transactions.

      Christiana  Bank,  the  Corporate  Trustee of the Fund, is not entitled to
compensation for serving in such capacity,  but is entitled to be reimbursed for
Fund expenses incurred by it that are reimbursable under the Declaration.

Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Stockholder Matters.

      The Fund sold 658.1067  Investor  Shares  (approximately  $65.8 million of
gross  proceeds)  of  beneficial  interest  in the Fund  pursuant  to a  private
placement  offering under Rule 506 of Regulation D under the Securities Act. The
offering closed in April 2000.  Further details  concerning the offering are set
forth above at Item 1. Business.

      The Managing Shareholder purchased one Investor Share for $83,000 in cash.
The one Investor Share equals 0.2 of 1% of the outstanding  Investor Shares.  By
virtue of its  purchase of such  Investor  Share,  the Managing  Shareholder  is
entitled to the same  ratable  interest in the Fund as all other  purchasers  of
Investor Shares.  No executive  officers of the Fund acquired Investor Shares in
the Fund's  offering and no  executive  officers of the Fund  currently  own any
Investor Shares.

      The  Managing  Shareholder  was  issued one  Management  Share in the Fund
representing  the  beneficial  interests and  management  rights of the Managing
Shareholder in its capacity as the Managing Shareholder  (excluding its interest
in the Fund  attributable to Investor  Shares it acquired in the offering).  The
management  rights of the Managing  Shareholder  are described in further detail
above at Item 1. Business and in Item 10.  Directors  and Executive  Officers of
the Registrant.  Its 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 at
Item 13. Certain Relationships and Related Transactions.

Item 13. Certain Relationships and Related Transactions.

      The  Declaration  provides  that cash flow of the  Fund,  less  reasonable
reserves which the Fund deems necessary to cover  anticipated Fund expenses,  is
to be distributed to the Investors and the Managing  Shareholder  (collectively,
the  "Shareholders"),  from  time to  time as the  Fund  deems  appropriate  and
attributable to their respective  share holdings.  Prior to payout (the point at
which Investors have received  cumulative  distributions  equal to the amount of
their capital  contributions),  each year all distributions from the Fund, other
than  distributions  of the revenues from  dispositions of Fund assets are to be
allocated  99%  to  the  Investors  and 1% to  the  Managing  Shareholder  until
Investors have been distributed  during the year an amount equal to 12% of their
total capital contributions (a "12% Priority Distribution"),  and thereafter all
remaining  distributions from the Fund during the year, other than distributions
of the revenues from  dispositions of Fund Property,  are to be allocated 75% to
Investors and 25% to the Managing  Shareholder.  Revenues from  dispositions  of
Fund  Property are to be  distributed  99% to  Investors  and 1% to the Managing
Shareholder  until  payout.  In all cases,  after  payout,  Investors  are to be
allocated 75% of all distributions and the Managing Shareholder 25%.

      For any fiscal  period,  the Fund's net profits,  if any, other than those
derived from  dispositions of Fund Property,  are allocated 99% to the Investors
and 1% to the Managing Shareholder until the profits so allocated offset (1) the
aggregate 12% Priority Distribution to all Investors and (2) any net losses from
prior  periods that had been  allocated to the  Shareholders.  Any remaining net
profits,  other than those  derived  from  dispositions  of Fund  Property,  are
allocated 75% to the Investors and 25% to the Managing Shareholder.  If the Fund
realizes  net  losses  for the  period,  the  losses  are  allocated  99% to the
Investors and 1% to the Managing Shareholder,  except that if an allocation of a
loss would cause an Investor to have a negative amount

                                       30

<PAGE>

in the Investor's  capital  account,  the loss will be allocated to the Managing
Shareholder  instead  in the  amount  necessary  to prevent  the  creation  of a
negative balance in the Investor's  capital account.  Revenues from dispositions
of Fund  Property are  allocated in the same manner as  distributions  from such
dispositions.  Amounts  allocated to the Investors are apportioned among them in
proportion to their capital contributions.

      On  liquidation  of the  Fund,  the  remaining  assets  of the Fund  after
discharge  of its  obligations,  including  any  loans  owed by the  Fund to the
Shareholders, will be distributed, first, 99% to the Investors and the remaining
1% to the  Managing  Shareholder,  until  payout,  and  any  remainder  will  be
distributed to the Shareholders in proportion to their capital accounts.

      Effective  January  1,  2005,  the  Managing  Shareholder,  acting  on the
recommendation of tax counsel for the Fund,  amended the Declaration of Trust of
the Registrant (the  "Declaration") in order to clear up potential ambiguity and
to maintain the tax status of the Fund. The Declaration  authorizes the Managing
Shareholder  to make such  amendments to the  Declaration  without  notice to or
approval of the Shareholders in a variety of circumstances,  including,  without
limitation, amendments to maintain the tax status of the Fund.

      Under  the  terms of the  amendment,  if an  Investor's  Adjusted  Capital
Account would become  negative  using General  Allocations,  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 will not affect the allocation of cash
which was not affected by the amendment.

      The Managing  Shareholder  has reviewed the amendments to the  Declaration
recommended by tax counsel for the Fund, and has concluded that the amendment of
the  Declaration  will not materially and adversely  affect the interests of the
Shareholders in the Fund.

      The Fund made distributions of $13,297 in each of the years ended 2004 and
2003 to the Managing Shareholder (which is a member of the Board of the Fund) as
stated at Item 5. Market for Registrant's  Common Equity and Related Stockholder
Matters.  Accordingly,  the Managing Shareholder and its affiliates charged fees
and reimbursements to the Fund and its subsidiaries as follows:

<TABLE>
<CAPTION>
      Fee            Paid to        2004        2003        2002         2001         2000
----------------   -----------   ---------   ---------   ---------   -----------   -----------
<S>                <C>           <C>         <C>         <C>         <C>           <C>
Investment fee      Ridgewood
                      Power      $      --   $      --   $      --   $        --   $   199,500

Placement agent     Ridgewood
 fee  and sales     Securities
 commissions        Corporation         --          --          --            --        98,950

Management fees     Ridgewood      822,633     822,633     822,633     1,645,267     1,096,844
                      Power

Organizational,     Ridgewood
 distribution and     Power
 offering fee                           --          --          --            --       442,790

Due diligence       Ridgewood
 expenses(a)          Power             --          --          --            --       708,758
</TABLE>

      The  investment fee equaled 2% of the proceeds of the offering of Investor
Shares and was payable for the Managing  Shareholder'  services in investigating
and evaluating investment  opportunities and effecting investment  transactions.
The placement agent fee (1% of the offering proceeds) and sales commissions were
also paid from proceeds of the offering, as was the organizational, distribution
and offering fee (5% of offering  proceeds) for legal,  accounting,  consulting,
filing, printing,  distribution,  selling, closing and organization costs of the
offering. As compensation to the Managing Shareholder, the Fund is obligated for
an annual  management  fee  equal to  $1,645,266,  or 2.5% of the total  capital
contributions  to the Fund payable monthly upon the closing of the Fund. For the
years  ended  December  31,  2004,  2003  and  2002,  the  managing  shareholder
contemporaneously  waived 50% of the management fee due (or $822,633  annually).
Accordingly,  management  fees of $822,633  were charged to the Fund for each of
the years ended December 31, 2004, 2003 and 2002.

                                       31

<PAGE>

      In addition to the foregoing, the Fund reimbursed the Managing Shareholder
and RPM at cost for expenses  and fees of  unaffiliated  persons  engaged by the
Managing  Shareholder  for Fund  business  and for certain  expenses  related to
management of Projects.

      Christiana  Bank,  the  Corporate  Trustee of the Fund, is not entitled to
compensation for serving in such capacity,  but is entitled to be reimbursed for
Fund expenses incurred by it that are reimbursable under the Declaration.

      Mr. Swanson, who is the manager and chairman of the Managing  Shareholder,
in September 1999, purchased a franchise to distribute ZAP's products on eastern
Long  Island,  New York and paid $10,000 to ZAP for the  franchise.  See Item 1.
Business; Narrative Description of Business; The Fund's Investments; ZAP.

      On June 26,  2003,  the  Managing  Shareholder  of the Fund entered into a
$5,000,000  Revolving Credit and Security Agreement with Wachovia Bank, National
Association.  The agreement allows the Managing  Shareholder to obtain loans and
letters of credit for the  benefit of the trusts and funds that it  manages.  As
part of the  agreement,  the Fund agreed to  limitations on its ability to incur
indebtedness,  liens and provide guarantees.  On February 20, 2004, the Managing
Shareholder  and Wachovia  Bank amended the agreement  increasing  the amount to
$6,000,000. Subsequently, the agreement has been extended to September 30, 2006.

      From time to time, the Fund records  short-term  payables and  receivables
from other  affiliates in the ordinary  course of business.  The amounts payable
and receivable with the other  affiliates do not bear interest.  At December 31,
2004,  the Fund had  outstanding  payables and  receivables  with the  following
affiliates:

                                                     Due From       Due To
                                                    -----------   -----------
  Ridgewood Power Management LLC                    $       ---   $   326,062
  Ridgewood Renewable Power                                 ---     2,313,732
  Trust V                                             1,261,459           ---
  Ridgewood Electric Power Trust IV                         ---           ---
  Egypt Fund                                                ---       270,389
  United Kingdom Landfill Gas Projects                  262,350           ---
  Ridgewood Dubai (paid January 2005)                   561,181           ---
  Other affiliates                                          ---        89,444
                                                    -----------   -----------
  Total                                             $ 2,084,990   $ 2,999,627
                                                    ===========   ===========

Item 14. Principal Accountant Fees and Services.

      On January  14,  2004,  Perelson  Weiner LLP was  appointed  as the Fund's
independent  accountants to audit the Fund's financial statements for the fiscal
year ended  December  31,  2004 and to render  other  professional  services  as
required.  Prior to January 14, 2004,  PricewaterhouseCoopers  LLP served as the
Fund's independent accountants.

      Fees billed by Perelson  Weiner LLP relating to the 2004 fiscal year,  and
by  PricewaterhouseCoopers  LLP relating to the 2004 and 2003 fiscal years, were
as follows:

Type of Service                      2004          2003
------------------                -----------------------
Audit Fees (1)                    $  68,000(2)  $  74,000
Audit-Related Fees                       --            --
Tax Fees (3)                         51,000        51,000
All Other Fees                           --            --
                                  ---------     ---------
Total                             $ 119,000     $ 125,000
                                  =========     =========

(1)   Comprised  of the audit of the  Fund's  annual  financial  statements  and
      reviews of the Fund's quarterly financial statements, as well as review of
      SEC filings.

(2)   Consists of aggregate  audit fees of (i) $68,000  billed for  professional
      services  rendered  by  Perelson  Weiner  LLP for the audit of the  Fund's
      annual  financial  statements  and  reviews  of the  financial  statements
      included in the Fund's  Quarterly  Reports on Form 10-Q for the year ended
      December 31, 2004,  and (ii) $33,000 and $41,000  billed for  professional
      services  rendered  by  Perelson  Weiner and  PricewaterhouseCoopers  LLP,
      respectively,  for the audit of the Fund's annual financial statements and
      reviews of the  financial  statements  included  in the  Fund's  Quarterly
      Reports on Form 10-Q for the year ended December 31, 2003.

                                       32

<PAGE>

      (3)   Comprised of services for tax advice.

                                     PART IV

Item 15. Exhibits and Financial Statement Schedules.

      (a)   Financial Statements.

      See the Index to Financial Statements in Item 8 of this report.

      (b)   Exhibits.

      Exhibits required by Section 601 of Regulation S-K.

<TABLE>
<CAPTION>
Exhibit No.              Description
-----------              -----------
<S>                      <C>
3       (i)(A)    +      Certificate of Trust of the Registrant.

3       (i)(B)    +      Amendment No. 1 to Certificate of Trust.

3       (i)(C)    +      Declaration of Trust of the Registrant.

3       (i)(D)           Amendment No. 1 to the Declaration of Trust.  Incorporated by reference to the
                         Registrant's Registration Statement on Form 10, dated April 30, 1999, as filed
                         on the Registrant's Form DEFA14A filed with the Commission on November 5, 2001

10A               +      Stock and Warrant Purchase Agreement for ZAP Power Systems,  Inc., dated March
                         29, 1999.

10B               +      Warrant for Purchase of Common Stock of ZAP Power Systems,  Inc.,  dated March
                         29, 1999.

10C               +      Investors'  Rights  Agreement  with ZAP Power Systems,  Inc.,  dated March 29,
                         1999.

10D               +      Milestone letter agreement with ZAP Power Systems, Inc., dated March 29, 1999.

10E               +      Letter agreement re board  representation with ZAP Power Systems,  Inc., dated
                         March 29, 1999.

10F               +#     Management Agreement between the Fund and Managing  Shareholders,  dated March
                         29, 1999.

10G               +#     Key Employees' Incentive Plan

10H               +      Agreement of Merger between  Ridgewood  Power  Corporation and Ridgewood Power
                         LLC.

10I               +/@    Operating  Agreement of Ridgewood Near East Holding LLC.,  dated September 30,
                         1999.

10J                @     Form of contracts and agreements  between CLPE  Holdings,  Inc and each of (i)
                         Ridgewood  Renewable  PowerBank II, LLC, (ii) Ridgewood Renewable PowerBank I,
                         LLC, (iii) Ridgewood Renewable PowerBank III, LLC and (iv) Ridgewood Renewable
                         PowerBank IV, LLC.

14                 @     Code of Ethics, adopted on March 1, 2004.
</TABLE>

                                       33

<PAGE>

<TABLE>
<CAPTION>
Exhibit No.              Description
-----------              -----------
<S>                      <C>
31.1              *      Certification of Randall D. Holmes, Chief Executive Officer of the Registrant,
                         pursuant to Securities Exchange Act Rule 13a-14(a).

31.2              *      Certification of Douglas R. Wilson, 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  Douglas R.  Wilson,  Chief
                         Financial Officer of the Registrant.

99.2              *      2004 Financial Statements for Ridgewood UK, LLC.
</TABLE>

----------
*     Filed herewith.

+     Incorporated by reference to the Registrant's Registration Statement
      on Form 10 filed with the SEC on April 30, 1999.

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

@     Filed with Form 10-K report on March 1, 2006.

(c)   Financial Statement Schedules

See Financial Statements and accompanying notes included in this report.

                                       34

<PAGE>

                                   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 FUND
                                             (Registrant)

Date: March  3, 2006                         By: /s/ Randall D. Holmes
                                                 ---------------------
                                                 Randall D. Holmes
                                                 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        Chief Executive Officer          March 3, 2006
---------------------        (Principal Executive Officer)
Randall D. Holmes

/s/ Douglas R. Wilson        Senior Vice President and        March 3, 2006
---------------------        Chief Financial Officer
Douglas R. Wilson            (Principal Accounting Officer)
RIDGEWOOD POWER LLC
(Managing Shareholder)

By: /s/ Randall D. Holmes    Chief Executive Officer of       March 3, 2006
    ---------------------    Managing Shareholder
      Randall D. Holmes

                                       35