**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        DC 20549**
 
 **FORM
        10-K**
 (Mark
        One)
 x
              ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 
 For
                  the fiscal year ended December 31,
                  2005
 
 o
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 
 For
                  the transition period from ________ to
                  _______
 
 Commission
        file number:  0-25935
 
 **THE
        RIDGEWOOD POWER GROWTH FUND**
 ****(Exact
        Name of Registrant as Specified in Its Charter)
 Delaware
              
              22-3495594(State
                  or Other Jurisdiction of
                Incorporation
                  or Organization)
              
              (IRS
                  Employer Identification Number)
 
 1314
                  King Street, Wilmington, DE 19801(Address
                  of Principal Executive Offices, including Zip Code)
 
 (302)
                  888-7444(Registrant’s
                  telephone number, including area code)
 
 SECURITIES
        REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
  None
 
 SECURITIES
        REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
  Investor
                    Shares of Beneficial Interest(Title
                    of Class)
 Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.  Yes o   
        No x
  Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 or 15(d) of the Act.  Yes o   No
        x
  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 o   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. o
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
        one):
  Large
        accelerated filer oAccelerated filer  oNon-accelerated
        filer x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act.  Yes o   No
        x
  There
        is
        no market for the Investor Shares. The number of Investor Shares outstanding
        at
        June 30, 2007 was 658.1067.










**EXPLANATORY
      NOTE**




This
      Annual Report on Form 10-K for the year ended December 31, 2005 (this “Form
      10-K”) being filed by The Ridgewood Power Growth Fund (the “Fund”) contains
      complete audited financial statements of the Fund for the years ended December
      31, 2005, 2004 and 2003 and interim financial information presented for each
      quarter during those periods, in each case, which are presented on a restated
      basis to the extent previously filed by the Fund.   This Form
      10-K is being filed by the Fund in lieu of the Fund separately filing with
      the
      United States Securities and Exchange Commission (the “SEC”) its delinquent
      Annual Report on Form 10-K for the year ended December 31, 2005 and restatements
      of (i) the Fund’s Annual Reports on Form 10-K for each of the years ended
      December 31, 2004 and 2003 and (ii) the Fund’s Quarterly Reports on Form 10-Q
      for each of the quarterly periods during the years 2003, 2004 and 2005, as
      discussed below (we refer to the foregoing quarterly and annual reports of
      the
      Fund herein collectively as the “Reports for the Historical Periods” and each
      such report is referred to herein as a “Report for a Historical
      Period”).  This Form 10-K does not contain financial information, or
      discussion in Management’s Discussion and Analysis of Financial Condition and
      Results of Operations, for periods ended prior to January 1, 2003.




This
      Form
      10-K includes the financial and other disclosures required to be made by the
      Fund in each of the Reports for the Historical Periods.  To the extent
      that a Report for a Historical Period was previously filed with the SEC, the
      information contained in this Form 10-K amends, restates and supersedes in
      its
      entirety the information contained in such report for periods commencing on
      or
      after January 1, 2003.  Except as noted above, this Form 10-K also
      includes the financial and other information that would have otherwise been
      required to have been provided in the Fund’s delinquent Annual Report on Form
      10-K for the year ended December 31, 2005, had such report been filed with
      the
      SEC.




As
      previously disclosed in its Form 8-K/A filed May 22, 2007, (i) the consolidated
      financial statements of the Fund included in the Fund’s Quarterly Reports on
      Form 10-Q and the Fund’s Annual Reports on Form 10-K for each of the periods
      beginning with the three-month period ended March 31, 2003 and continuing
      through the three and nine-month periods ended September 30, 2005 filed with
      the
      SEC, including applicable reports of its prior independent registered public
      accounting firms (the “Previously Issued Financial Statements”), should no
      longer be relied upon and (ii) the Previously Issued Financial Statements should
      be restated to conform to generally accepted accounting principles
      (“GAAP”).  The determination to restate these financial statements and
      selected financial data was made by the Fund and Ridgewood Renewable Power
      LLC,
      the Managing Shareholder of the Fund (the “Managing Shareholder”) on April 18,
      2007, as a result of the identification of errors, including the purchase
      accounting for US Hydro projects, impairment of long-lived assets, waiver of
      management fees payable to the Managing Shareholder of the Fund and accounting
      for professional services.  The Fund has discussed these matters with
      its independent registered public accounting firm.  As these errors
      were material to the Fund’s consolidated financial statements and selected
      financial information filed with the SEC, the Fund has concluded that it must
      restate the consolidated financial statements of such prior periods to correct
      misstatements therein.









**FORM
                  10-K****TABLE
                  OF CONTENTS****PART
                  I**Item
                  1.
              Business
              1Item
                  1A.
              Risk
                  Factors
              10Item
                  1B.
              Unresolved
                  Staff Comments
              15Item
                  2.
              Properties
              15Item
                  3.
              Legal
                  Proceedings
              15Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              16**PART
                  II**Item
                  5.
              Market
                  for Registrant’s Common Equity, Related Security Holder Matters andIssuer
                  Purchases of Equity Securities
              16Item
                  6.
              Selected
                  Financial Data
              17Item
                  7.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              19Item
                  7A.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              41Item
                  8.
              Financial
                  Statements and Supplementary Data
              43Item
                  9.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              43Item
                  9A.
              Controls
                  and Procedures
              44Item
                  9B.
              Other
                  Information; Unregistered Sales of Equity Securities and Use of
                  Proceeds;Defaults
                  Upon Senior Securities
              45**PART
                  III**Item
                  10.
              Directors
                  and Executive Officers of the Registrant
              45Item
                  11.
              Executive
                  Compensation
              47Item
                  12.
              Security
                  Ownership of Certain Beneficial Owners and Management andRelated
                  Security Holder Matters
              48Item
                  13.
              Certain
                  Relationships and Related Transactions
              49Item
                  14.
              Principal
                  Accountant Fees and Services
              50**PART
                  IV**Item
                  15.
              Exhibits
                  and Financial Statement Schedules
              51SIGNATURES
              54














**Forward-Looking
        Statements**





Certain
      statements discussed in Part I, Item 1. “Business”, Part I,
      Item 3. “Legal Proceedings”, Part II, Item 7. “Management’s
      Discussion and Analysis of Financial Condition and Results of Operations” and
      elsewhere in this Annual Report on Form 10-K constitute forward-looking
      statements within the meaning of the Private Securities Litigation Reform Act
      of
      1995. These forward-looking statements generally relate to the Fund’s plans,
      objectives and expectations for future events and include statements about
      the
      Fund’s expectations, beliefs, plans, objectives, intentions, assumptions and
      other statements that are not historical facts. Such forward-looking statements,
      including those concerning the Fund’s expectations, are subject to known and
      unknown risks and uncertainties, which could cause actual results to differ
      materially from the results, projected, expected or implied by the
      forward-looking statements, some of which are beyond the Fund’s control, that
      may cause the Fund’s actual results, performance or achievements, or industry
      results, to be materially different from any future results, performance or
      achievements expressed or implied by such forward-looking statements. Examples
      of events that could cause actual results to differ materially from historical
      results or those anticipated include changes in political and economic
      conditions, federal or state regulatory structures, government mandates, the
      ability of customers to pay for energy received, supplies and prices of fuels,
      operational status of generating plants, mechanical breakdowns, volatility
      in
      the price for electric energy, natural gas, or renewable energy. Specific
      consideration should be given to various factors described in Part I,
      Item 1A. “Risk Factors” and Part II, Item 7. “Management’s
      Discussion and Analysis of Financial Condition and Results of Operations”, and
      elsewhere in this Annual Report on Form 10-K. The Fund undertakes no
      obligation to publicly revise any forward-looking statements or cautionary
      factors, except as required by law.







**PART
      I**




**ITEM
      1.  BUSINESS**





**Overview**





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




The
      Fund
      has focused primarily on small-scale electricity generation projects using
      renewable sources of fuel and on water treatment facilities in remote locations
      serving hotel resort developments.  These projects allow the Fund to
      develop secure long-term positions in attractive specialty markets for products
      and services provided by its projects and companies.  While the Fund
      may make additional investments in the projects and companies it currently
      owns,
      it does not anticipate future investment in projects or companies outside its
      current portfolio.




As
      of
      December 31, 2005, the projects in which the Fund then had investments were
      located in the United States, the United Kingdom and Egypt.  As of
      that date, the Fund had investments in hydro-electric generating projects in
      the
      US with total capacity of 15 megawatts (“MW”), in landfill gas-fired electric
      generating projects in the UK with total capacity of 48.7MW and in projects
      in
      Egypt with the capacity to produce approximately 24,500 cubic meters
      (approximately 6.5 million gallons) of potable water per day and electricity
      generating capacity of 29.7MW.




The
      Fund
      initiated its private placement offering on February 9, 1998 selling whole
      and
      fractional shares of membership interests of $100,000 per share (“Investor
      Shares”). There is no public market for Investor Shares and one is not likely to
      develop.  In addition, Investor Shares are subject to significant
      restrictions on transfer and resale and cannot be transferred or resold except
      in accordance with the Fund’s declaration of trust (“Declaration of Trust”) and
      applicable federal and state securities laws. The offering was concluded in
      April 2000 and raised approximately $65.8 million.  After payment of
      offering fees, commissions and investment fees, the Fund had $54.6 million
      for
      investments and operating expenses. As of June 30, 2007, the Fund had 658.1067
      Investor Shares outstanding, held by 1,341 shareholders.




1


**Managing
      Shareholder**




RRP,
      via
      a predecessor corporation, was founded in 1991 by Robert E. Swanson. As the
      Managing Shareholder, RRP has direct and exclusive control over the management
      of the Fund’s operations.  At the inception of the Fund, Ridgewood
      Power VI LLC (“Power VI”) was an additional managing shareholder but, effective
      January 1, 2001, Power VI assigned and delegated all of its rights and
      responsibilities to the Managing Shareholder and since that time has been an
      entity with only nominal activity. With respect to project investment, RRP
      locates potential projects, conducts appropriate due diligence and negotiates
      and completes the transactions in which the investments are made by the
      Fund.




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




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




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




**Business
      Strategy**




The
      Fund’s primary investment objective is to generate cash flow for distribution to
      shareholders and capital appreciation from one or more of the acquisition,
      development, ownership and operation of interests in electricity generation
      and
      other infrastructure projects and companies. The Fund generally seeks to invest
      in projects and companies that provide products or services through a number
      of
      small facilities and that offer opportunities for expansion either through
      increasing production at existing sites or through the establishment of
      additional sites.  These projects often involve development,
      construction and operating risk but, once established, may be able to
      effectively “lock-in” the customer (or customers) served by the project, which
      would prevent competitors from dislodging the Fund’s project.  The
      Fund focuses on markets in which projects can be developed and built quickly
      and
      can be standardized as to their design, equipment and
      construction.  By following this strategy, the Fund seeks to take
      advantage of attractive market opportunities while streamlining the development
      process and diversifying across a number of projects in order to contain the
      exposure of the Fund to the risks inherent in such projects. As of December
      31,
      2005, all of the Fund’s projects are owned through investment vehicles that the
      Fund co-owns with certain affiliated investment funds also managed by the
      Managing Shareholder.  While the Fund may make additional investments
      in the projects and companies it currently owns, it does not anticipate future
      investment in projects or companies outside its current portfolio.




2




**Projects
      and Properties**




The
      following table is a summary of the Fund’s investment portfolio as of December
      31, 2005 detailing the nature of the business, the portion of the investment
      owned by the Fund and the number of projects in each investment.




Company
            No.
                of Sites
            Fund
              Interest
            Leased/
              Owned1
            Purpose
            Structure5Ridgewood
              Egypt2
            17
                locations
            68.1%
            Leased
            1
–
                Power only
              8
–
                Water only
              8
–
                Water & Power
            Block/slabUS
                Hydro3
            7
                locations
            70.8%
            Leased
                and
              Owned
            Hydroelectric
              Generation
            Integral
                to river
              damsRidgewood
              UK4
            22
                locations
            30.4%
            Leased
            Electricity
              Generation
            Containerized





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




2
            Co-owned
                with Ridgewood Electric Power Trust V (“Trust V”) (14.1%) and the
                Ridgewood Egypt Fund (17.8%).  All Egyptian sites are located on
                or near the Red Sea.




3
            Co-owned
                with Trust V.  Six US Hydro sites are located on the Eastern
                Seaboard of the United States and one in
                California.




4
            These
                projects, which were co-owned with Trust V, were sold on February
                22, 2007
                to an entity not affiliated with the Fund or the Managing Shareholder,
                as
                disclosed on a Form 8-K filed by the Fund with the SEC on February
                28,
                2007.  5
            Describes
                the type of structure in which the projects of the Fund are
                housed.




**Ridgewood
      Egypt**





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





On
      December 30, 2001, NEH, through
      REFI, purchased a 28% equity interest in Sinai For Environmental Services S.A.E.
      (“Sinai”), which owns a 6,300 cubic meter (1.7 million gallon) per day water
      desalinization plant, for 5 million Egyptian pounds (approximately $1.1 million
      in 2001). In February of 2002, the Fund made an additional investment of 4.4
      million Egyptian pounds (approximately $939,000 in 2002) to increase its
      ownership to 53% and gain control of Sinai. As of December 31, 2005, REFI was
      entitled to an additional interest of about 13.4% in Sinai in return for having
      provided Sinai with certain machinery and equipment.  As of December
      31, 2005, receipt of this additional interest was subject to routine review
      and
      approval by the Egyptian government, which was granted in 2006.





The
      facilities of REFI source feedwater
      from shallow wells or directly from the Red Sea and use reverse osmosis
      filtration to produce potable water for sale.  Certain of the
      facilities of REFI are located on or adjacent to their hotel customers while
      others are stand-alone facilities that deliver product water by
      pipeline.  The facilities of REFI are modular and mobile and can be
      relocated to accommodate shifts in demand.  As of December 31, 2005,
      REFI owns one project that supplies only electricity, eight that provide only
      potable water and eight that provide both water and electricity
      generation.  The projects generally sell their output under contracts
      and other arrangements at prevailing market rates.  REFI has the
      capacity to make approximately 6.5 million gallons per day of potable water
      and
      29.7MW of electricity.  As a matter of operational management, REFI
      has a practice of continual evaluation of its projects and relocates capacity
      between locations in order to meet changes in demand from its
      customers.  The electricity generating capacity of REFI is used
      primarily by its own water treatment plants thereby displacing electricity
      the
      water plants would otherwise have to purchase from third
      parties.  This arrangement helps the Fund control costs and increase
      reliability.  The business of REFI is managed and operated by
      employees of REFI with its main office located in Cairo, Egypt.





3




The
      Ridgewood Egypt operations have two debt facilities. A portion of the assets
      of
      Sinai are security for a Sinai bank term loan facility and certain REFI
      equipment secures a loan facility under which REFI is the borrower.





**US
      Hydro**





Beginning
      in 1999, the Fund and Trust V
      began discussions with Synergics, Inc. (“Synergics”) to acquire certain of its
      hydroelectric generating plants.  In the course of negotiations, the
      Fund and Trust V were presented with an opportunity to acquire certain debt
      obligations of Synergics from a lender to Synergics.  The Fund and
      Trust V, through a joint venture (the “debt joint venture”), acquired debt
      obligations of Synergics from the lender on April 28, 2000 for a payment to
      the
      lender of approximately $17 million.   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.





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 the acquisition of Synergics and changed the name of the acquisition
      joint venture to Ridgewood US Hydro Corporation (“US Hydro”).





The
      aggregate acquisition price of US
      Hydro, including both the 2000 debt acquisition and the 2002 purchase of shares,
      was approximately $20.3 million. As a result of the acquisition, the Fund and
      Trust V received seven hydroelectric generating facilities with 15MW of
      generating capacity and notes receivable to be repaid from the output of an
      additional project with 4MW of generating capacity.  The Fund has
      since reached a settlement eliminating the notes receivable making the hydro
      project portfolio 15MW as of December 31, 2005.  The Fund and Trust V
      also assumed approximately $7.5 million of other bank debt in connection with
      the acquisition.





As
      of December 31, 2005, the output of
      six projects is sold to utility purchasers under long-term contacts at prices
      set out in those contracts while output for the seventh is sold at open market
      prices.  Three of the projects are located in Virginia, two are
      located in New York, one project is located in California and one project is
      located in Rhode Island.  The projects are managed by RPM under an
      operations and maintenance agreement that provides for the Fund to pay the
      actual cost of project operations and maintenance along with an allocation
      of
      actual overhead to provide for administrative services.





Five
      of the east coast facilities are
      security for a term loan facility and the California facility is security for
      a
      lease obligation.





**Ridgewood
      UK**




On
      May 26, 1999, Ridgewood UK, LLC
      (“RUK”) was formed as a New Jersey limited liability company and was
      re-domiciled to Delaware on December 24, 2002. As of December 31, 2005, the
      business of RUK was the extraction of methane-containing gas from landfill
      sites
      in England, Scotland and Wales, the use of that gas as fuel for generating
      electricity and the sale of that electricity.





On
      June 30, 1999, Trust V contributed
      $16.7 million to RUK.  RUK’s wholly owned subsidiary, Ridgewood UK
      Ltd. (“UK Ltd.”) a limited company registered in England and Wales, then
      borrowed funds from the Bank of Scotland and with a portion of these combined
      proceeds, purchased from CLP Envirogas, Ltd. (formerly Combined Landfill
      Projects, Ltd.) six landfill gas power plants with a combined electricity
      generation capacity of 15.1MW located in the United Kingdom.  At the
      time of the purchase, UK Ltd. and CLP Envirogas, Ltd. also agreed the terms
      on
      which UK Ltd. would purchase additional projects then under development by
      CLP
      Envirogas, Ltd. should such projects be successfully developed.





4




In
      2001,
      the Fund contributed $5.8 million to RUK in return for an equity share of 30.4%
      of RUK.  Using this contribution and portions of additional proceeds
      from Bank of Scotland borrowings, UK Ltd. purchased an additional four projects
      with combined generating capacity of 4.6MW.  On October 16, 2001, UK
      Ltd., through the issuance of approximately 24% of its shares and the payment
      of
      $2 million cash, 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 certain landfill gas
      projects (the “UK Merger”).  As a result of the UK Merger, UK Ltd.
      acquired the ability to develop and operate landfill gas-fueled electricity
      generating facilities in the UK as well as the development rights to a number
      of
      such projects.  The seller in the UK Merger was Arbutus Energy Ltd.
      (Jersey) (“Arbutus”) who became the minority interest holder of UK Ltd.
      following the UK Merger.  UK Ltd. was renamed CLPE Holdings Ltd.
      (“CLP”) in 2001.





As
      of December 31, 2005, CLP owned 22
      landfill methane gas-fired electric generating projects in the United Kingdom
      with an installed capacity of approximately 48.7MW. Projects representing
      approximately 26.5MW sell electricity under long-term contracts to the
      Non-Fossil Purchasing Agency (“NFPA”), a not-for-profit organization that
      purchases electricity generated by certain renewable power projects on behalf
      of
      large English electric utilities. Projects representing approximately 22.2MW
      qualify for the UK government’s Renewable Obligation incentive program
      (described in more detail below) and sell their output under short-term
      contracts.





As
      part of the UK Merger, RUK also
      acquired a 50% ownership in each of CLP Organogas SL, which owns a 2MW plant
      located in Seville, Spain and CLP Envirogas, SL, a management and development
      services company also located in Seville, Spain (collectively, the “Spanish
      Business”). Effective January 1, 2003 RUK transferred its interest in the
      Spanish Business to Arbutus in return for a portion of the minority interest
      in
      CLP then held by Arbutus.  As a result of the transaction, RUK
      increased its ownership in CLP from 76% to 88%.





Beginning
      in 2002, RUK began to develop sites capable of qualifying for the UK’s Renewable
      Obligation incentive program (“RO”). The RO program requires electricity
      suppliers serving end-users in the UK to obtain renewable obligation
      certificates (“ROCs”) to demonstrate that a minimum portion of their electricity
      supplied was generated by producers meeting the qualifications of the RO. In
      order to fund the development and construction of these projects, RUK entered
      into a series of agreements with affiliated entities that agreed to provide
      financing.  The affiliated entities providing this funding, Ridgewood
      Renewable PowerBank LLC, Ridgewood Renewable PowerBank II LLC, Ridgewood
      Renewable PowerBank III LLC and Ridgewood Renewable PowerBank IV LLC (each
      a
“PowerBank Fund” and collectively the “PowerBank Funds”), are managed by
      RRP.  Terms of the agreements between RUK and each of the PowerBank
      Funds are substantially the same and each provides for the PowerBank Funds
      to
      make construction advances to RUK in exchange for interest during construction
      and streams of fixed and variable lease payments once the financed projects
      go
      into operation (the “PowerBank Arrangements”).




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




Prior
      to
      the consummation of the Sale, RUK had owned 88% of the issued and outstanding
      shares of CLP and the remaining 12% of CLP had been owned by Arbutus. The RUK
      projects that are parties to the NFFO contracts secured a term loan obligation
      of CLP.




On
      February 22, 2007, RUK completed the sale (the “Sale”) of all of the issued and
      outstanding shares of CLP.  Under the Sale Agreement, Buyer acquired
      (i) 100% of the issued and outstanding shares of CLP (the “CLP Shares”) from RUK
      and Arbutus, and (ii) substantially all of the assets (the “Assets”) of the
      PowerBank Funds.  The Assets and the CLP Shares constitute all the
      landfill gas business located in the United Kingdom of the Fund and the
      PowerBank Funds.  In accordance with the Sale Agreement, at closing,
      the Buyer paid an aggregate purchase price for the CLP Shares and the Assets
      of
£117.8 million ($229.5 million), subject to a working capital adjustment that
      resulted in an increase to the purchase price of approximately £4.2 million
      ($8.2 million). After adjustment, the purchase price for the CLP Shares was
      approximately £25.1 million ($48.9 million), of which approximately £15.4
      million ($30.0 million) was attributable to Trust V and approximately £6.7
      million ($13.1 million) was attributable to the Fund, with Arbutus receiving
      the
      remaining balance.  Taking into account payments made to RUK pursuant
      to certain sharing arrangements with the PowerBank Funds, the total gross sales
      proceeds to the Fund were approximately £8.4 million ($16.4
      million).




5




The
      Sellers gave a number of warranties and indemnities to the Buyer in connection
      with the Sale that it considers typical of such transactions.  Should there
      be a breach of the warranties or should an indemnity event occur, the Buyer
      could make claims against the Sellers including the Fund.  Management of
      the Fund does not believe there is a material likelihood that such a claim
      will
      arise or that, should such a claim arise, the Fund would incur a material
      liability.  This belief is based, in part, on the Sellers having purchased
      warranty and indemnity insurance to minimize such risk.  There are no
      current plans to reserve or provide an escrow for the contingent liabilities
      represented by these warranties and indemnities. In March 2007, the Fund
      distributed a portion of the Sale proceeds to the shareholders.




**ZAP**





In
      1999, the Fund invested $2.1 million
      in the shares of ZAP (formerly ZAPWorld.COM, Inc. and ZAP Power Systems, Inc.).
      As part of the 678,808 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 million, 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
“ZAAP.OB”.  In June 2001, the Fund agreed to sell to ZAP, and certain
      of its shareholders, the Fund’s interest in ZAP in return for a $1.5 million
      interest bearing promissory note (the “Ridgewood ZAP Note”).





In
      March 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.  In June 2002, the
      Second Amended Plan for Reorganization became effective and the Ridgewood ZAP
      Note was converted into 994,500 shares of ZAP common stock as reorganized (the
      “Reorganized ZAP Shares”). When issued, the Reorganized ZAP Shares were subject
      to restrictions on sales or transfers.  As part of the reorganization,
      Ridgewood ZAP also received warrants to purchase ZAP shares of which a portion
      was exercised.





During
      the period between September
      2003 and January 2006, after the lifting of the transfer restrictions on the
      Reorganized ZAP Shares, the Fund exercised a portion of the warrants and then
      liquidated its position in ZAP Shares through a combination of share sales
      and
      distributions to shareholders of the Fund.





**Business
      Segments**





The
      Fund manages and evaluates its
      operations in two reportable business segments: power generation and water
      desalinization.  These segments have been classified separately by the
      similarities in economic characteristics and customer base.  Common
      services shared by the business segments are allocated on the basis of
      identifiable direct costs, time records or in proportion to amounts invested
      in
      projects managed by the Managing Shareholder. Included in the water
      desalinization segment is the Egyptian power generation due to it primarily
      being a by-product of the water processing and under common management
      control.





For
      financial information regarding the
      Fund’s business segments, see Note 16 to the Fund’s Consolidated Financial
      Statements which appear elsewhere in this Annual Report on
      Form 10-K.








**Project
      Feedstock/Raw Materials**





The
      projects of the Fund each convert a
      raw material into a finished product and the arrangements for obtaining these
      raw materials are a key element in the business of the Fund.





6




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





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





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





Prior
      to the Sale, the UK projects of
      the Fund consisted of reciprocating engine generator sets that use
      methane-containing landfill gas as fuel.  Each project location owned
      and operated a network of wells, pipes and fans that collected gas from the
      landfill as it was produced through natural anaerobic digestion of the
      waste.  The UK projects did not own or operate any landfills but had
      arrangements with site owner/operators which gave the projects certain rights,
      including the right to build the project, occupy its compound, operate the
      gas
      collection system and use the gas from the landfill.  These agreements
      were generally referred to as gas agreements, were long-term agreements that
      typically run for the life or expected life of the gas resource attributable
      to
      the landfill and typically included provisions for royalty payments from the
      project to the landfill operator as compensation for the granting of these
      rights.  Royalty payments were typically calculated as a percent of
      revenue. RUK did not maintain material inventories of either raw materials
      or
      output products.





**Competition**





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





Competition
      in the UK landfill gas
      electricity generation industry is based on obtaining site rights by obtaining
      gas agreements.  Once established on a site, there is little a
      competitor can do to affect the business of a project. The US Hydro projects
      can
      generally sell their production at prevailing market prices, and, as such,
      do
      not generally face competition in the sale of the electricity they
      generate.





7




**Seasonality/Weather
      Effects**




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




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




Prior
      to
      the Sale, the RUK projects experienced minor fluctuations in response to
      seasonal weather patterns but these patterns were not believed to be
      material.




**Government
      Incentives and Regulation**




Certain
      of the projects of the Fund qualify for incentives because of their location
      or
      their use of renewable fuels.




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




The
      US
      Hydro projects operate under the terms of the Federal Energy Regulatory
      Commission (“FERC”) licenses issued to them. Even though US Hydro has no
      employees, it is affected by general employment regulations in the jurisdictions
      of its facilities through the RPM operations and maintenance agreements. The
      Fund considers these regulations to be routine and does not consider the cost
      of
      compliance to be material.




Because
      the fuel used by the RUK projects is a renewable, non-fossil fuel source and
      because it is also an undesirable by-product of landfill operations, the
      projects of RUK qualified under two separate primary incentive
      regimes.  The older of the two is the Non-Fossil Fuel Obligation
      (“NFFO”) which is a program that provided credit-worthy, long-term purchase
      contracts for qualifying electricity generators enacted in section 32 and 33
      of
      the Electricity Act 1989.  The program provided for a limited volume
      of such contracts and called for project developers to bid for portions of
      the
      limited volume.  The NFPA was set up in connection with the NFFO
      program to act as administrator and counter-party to the NFFO contracts as
      well
      as to administer the contract bidding process.  Prior to the
      investment by Trust V and the Fund in the UK business, CLP, the predecessor
      entity, entered a number of these auctions and won several
      contracts.  A number of these projects were built by RUK and currently
      sell their electrical output pursuant to NFFO contracts.  Because the
      contracts were credit-worthy, projects having the benefit of the contracts
      can
      readily obtain financing.  The last NFFO contracts were granted in
      1998 and no new NFFO contracts are expected to be granted in the
      future.




The
      subsequent incentive for which the projects of RUK qualified was also enacted
      through the Electricity Act 1989 and implemented through The Renewable
      Obligations Order 2002. Known as the RO, this incentive established targets
      for
      parties supplying electricity to final consumers in the UK with respect to
      the
      portion of their electricity supply generated from qualifying renewable
      facilities and imposed penalties on those parties to the extent they failed
      to
      meet the targets.  As an owner of qualifying renewable facilities, RUK
      was able to sell the electricity generated by these facilities as well as
      certificates (“ROCs”) demonstrating that the electricity can be delivered in
      satisfaction of the Renewable Obligation.  Both the electricity and
      the ROCs produced by the qualifying facilities were undifferentiated commodities
      and there are liquid markets for both albeit at fluctuating prices.




8




Prior
      to
      the Sale, the projects of RUK were subject to routine regulatory oversight
      which
      was executed mostly at the local level and consists primarily of zoning, noise
      and work-place safety regulations that the Fund did not consider
      onerous.  In addition to these regulations, the RUK projects are also
      subject to the Integrated Pollution Prevention and Control (“IPPC”) regimes
      designed to control pollution from industrial sources.  The IPPC
      regulations are contained in Statutory Instrument 2000 No. 1973; The Pollution
      Prevention and Control (England and Wales) Regulations 2000 and were introduced
      under the Pollution Prevention and Control Act 1999.  Regulators set
      permit conditions that are based on the use of the “Best Available Techniques”,
      which balances the cost to the operator against benefits to the
      environment.  The IPPC regulations are being phased in over an
      extended period and, while they represent an administrative burden in
      demonstrating initial compliance and a modest burden in demonstrating on-going
      compliance, the Fund did not believe the IPPC regulations would otherwise affect
      the business of RUK.




As
      a
      general matter, incentives and regulations affecting RUK were enacted and issued
      by the Parliament of England for England and Wales and separately by the
      Scottish Parliament for Scotland.  Prior to the Sale, the Fund did not
      believe that the differences between the versions of the incentives and
      regulations issued by these two governments would have a material affect on
      the
      Fund.




**Financing
      Arrangements**




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




**Insurance**




The
      Fund has in place, either directly
      or through investee companies, insurance typical for activities such as those
      conducted by the Fund.  These policies include, where appropriate and
      economical, property and casualty, business interruption, workman’s
      compensation, political risk and key executive life insurance with underwriters
      and carriers the Fund believes, in consultation with its advisors, to be
      appropriate.  Certain of the insurance carried by the Fund is required
      by the lenders to certain of its investee companies.




**Employees**




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




**Offices**




The
      principal office of the Fund and
      the Managing Shareholder is 1314 King Street, Wilmington, Delaware, 19801 and
      its phone number is 302-888-7444. The Managing Shareholder also maintains
      offices at 947 Linwood Avenue, Ridgewood, New Jersey, 07450 and a phone number
      of 201-447-9000.




**Available
      Information**




The
      Fund’s shares are registered under
      Section 12(g) of the Exchange Act.  The Fund must therefore comply with,
      among other things, the periodic reporting requirements of Section 13(a) of
      the
      Exchange Act. As a result, the Fund prepares and files annual reports with
      the
      SEC on Form 10-K, quarterly reports on Form 10-Q and, from time to time, current
      reports on Form 8-K. Moreover, the Managing Shareholder maintains a website
      at
      http://www.ridgewoodpower.com that contains important information about the
      Managing Shareholder, including biographies of key management personnel, as
      well
      as information about the investments made by the Fund and the other investment
      programs managed by the Managing Shareholder.




9




**Where
      You Can Get More Information**




The
      Fund
      files annual, quarterly and current reports and certain other information with
      the SEC.  Persons may read and copy any documents the Fund files at the
      SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549. You may
      obtain information on the operation at the public reference room by calling
      the
      SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports,
      proxy and information statements, and other information regarding issuers that
      file electronically with the SEC at http://www.sec.gov. A copy of any such
      filings will be provided free of charge to any shareholder upon written request
      to the Managing Shareholder at its business address - 947 Linwood Avenue,
      Ridgewood, New Jersey 07450, ATTN: General Counsel.




**Reports
      to Shareholders**




The
      Fund
      does not anticipate providing annual reports to shareholders but will make
      available upon request copies of the Fund’s periodic reports to the SEC on Form
      10-K and on Form 10-Q.




**ITEM
      1A. RISK FACTORS**




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




**RISKS
      INHERENT IN THE BUSINESSES OF THE FUND**




**The
      Fund has material weaknesses and significant deficiencies in its internal
      controls over financial reporting.**




Material
      weaknesses and significant
      deficiencies in internal controls over financial reporting have been identified
      in connection with the Fund’s audits. These weaknesses primarily relate to the
      Fund’s inability to complete its reporting obligations on a timely basis as a
      result of deficient controls and procedures over financial reporting. See Item
      9A. “Controls and Procedures” in this report. The inability of the Fund to
      timely report its results could impact the ability of an investor to adequately
      understand its investment, restrict the Fund’s ability to conduct its activities
      and subject the Fund to fines and penalties.




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




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




**The
      Fund’s hydroelectric business can be affected by adverse weather
      conditions.**




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




10




**The
      Fund has a significant portion of its investments located outside the United
      States that can be affected by events beyond the Fund’s
      control.**




The
      Fund
      has significant investments in Egypt and, until the sale of its UK operations,
      significant investments in the UK. As a result, the Fund is subject to certain
      risks on a country-by-country basis, including changes in domestic and foreign
      government regulations, licensing requirements, tariffs or taxes and other
      trade
      barriers, exchange controls, expropriation, and political and economic
      instability, including fluctuations in the value of foreign currencies. Certain
      of these risks may be greater than those commonly experienced in the United
      States. The exchange rate from local currencies to US dollars may be so
      unfavorable that the Fund may experience negative net results, when measured
      in
      US dollars, even though the performance of the Egyptian or UK businesses may
      be
      successful when measured in their local currencies. Also, fluctuations of
      foreign currencies could reduce the value of, or the ability of, the Fund to
      make distributions to its shareholders.




**The
      operations of the Fund have limited capital, limited access to new capital
      and
      have obligations to third parties for borrowed money.**




The
      Fund’s investments, but not the
      Fund itself, utilize debt financing, which increases the variability of results
      and increases the financial risk of the Fund.   The rights of the
      Fund to the cash flow of the projects are subordinated to the obligations of
      the
      projects under the debt facilities, which could limit the Fund’s ability to
      receive cash distributions from the investments.  Also, the Fund does
      not maintain significant reserves for contingencies to offset this
      risk.




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




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




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




As
      an integral part of its Egyptian
      businesses, and the UK business prior to its sale in 2007, the Fund identifies,
      develops and constructs new projects.  These processes are inherently
      uncertain and prone to unforeseen delays and costs which can adversely impact
      the revenues, expenses and cash flow of the Fund by making completed projects
      less economically attractive than they were expected to be at the time a
      commitment was made to building the project.  This can also result in
      the abandonment or liquidation of projects prior to completion.




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




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




11




**The
      projects of the Fund are subject to regulatory changes (including changes in
      environmental regulations) that may have an adverse impact on the
      Fund.**




This
      area of risk is inherently
      difficult to predict but could include matters such as the ability of the
      Egyptian projects to discharge the reject water that is a byproduct of the
      purification process or requirements on the part of regulators for owners of
      dams or hydroelectric generators to provide for fish passages either upstream
      or
      downstream of the dams that affect US Hydro.  Such changes could
      increase costs at affected projects or prevent certain projects from
      operating.




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




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




**The
      Fund or the Managing Shareholder may become involved in
      litigation.**




The
      Fund faces an inherent business
      risk of exposure to various types of claims and lawsuits that may arise in
      the
      ordinary course of business. Although, it is not possible to predict the timing,
      nature or outcome of such claims or lawsuits should they arise, we believe
      the
      chances that any claims or lawsuits arising and resulting, individually or
      in
      the aggregate, in a material impact on the Fund to be remote. However, the
      Fund
      could in the future incur judgments or enter into settlements of lawsuits and
      claims that could have a material adverse effect on the results of the
      Fund.  In addition, while the Fund maintains insurance coverage with
      respect to certain claims, the Fund may not be able to obtain such insurance
      on
      acceptable terms in the future, if at all, and any such insurance may not
      provide adequate coverage against any such claims.




THE
      FOLLOWING RISK FACTORS RELATE TO
      THE FUND’S RUK ACTIVITIES, WHICH AS DISCUSSED ABOVE, WERE SOLD IN
      2007:




**The
      Fund’s UK landfill methane business depends on the production of landfill
      methane from the landfill sites on which they operate and access to that gas
      production.**




The
      electricity production of the RUK projects is typically limited by the available
      amount of landfill methane gas used as fuel by these projects.  A
      number of factors influence the amount of landfill methane gas produced by
      a
      landfill site including the quantity and makeup of the waste deposited into
      the
      site by the landfill operator, the manner and sequence of the waste deposition,
      the non-waste materials used to support the landfill structure and the amount
      of
      liquid in the landfill.  A number of factors also influence the
      ability of the Fund’s UK personnel to gain access to gas that is being produced
      by a landfill including the landfilling strategy and practices of the landfill
      site operator.  To the extent that these factors limit the production
      of landfill methane gas or the ability of the projects of the Fund to collect
      and use that gas at some or all of the landfill sites on which they operate,
      the
      affected project or projects may not achieve profitable output
      levels.




**Certain
      of the RUK projects sell their electricity and ROC output at open market prices
      and could be adversely affected should prices fall
      substantially.**




With
      respect to the projects of RUK not
      subject to NFFO contracts, the output is sold at open market power
      prices.  These prices are fixed from time-to-time in one-year
      contracts.  Should the price of electricity or ROCs fall
      substantially, the Fund would be adversely affected and it is possible that
      the
      projects affected could not be operated profitably.




12




**RISKS
      RELATED TO THE NATURE OF THE FUND’S SHARES**




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




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




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




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




**The
      Fund’s assets are generally illiquid and any disposition of Fund assets is at
      the discretion of the Managing Shareholder.**




The
      Fund’s interest in projects is
      illiquid. However, if the Fund were to attempt to sell any such interest, a
      successful sale would depend upon, among other things, the operating history
      and
      prospects for the project or interest being sold, the number of potential
      purchasers and the economics of any bids made by them. The Managing Shareholder
      has full discretion to determine whether any project, or any partial interest,
      should be sold and the terms and conditions under which such project would
      be
      sold.  Consequently, shareholders will depend on the Managing
      Shareholder for the decision to sell all or a portion of an asset, or retain
      it,
      for the benefit of the shareholders and for negotiating and completing the
      sale
      transaction.




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




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




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




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




13




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




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




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




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




**TAX
      RISKS ASSOCIATED WITH AN INVESTMENT IN SHARES**




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




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




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




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




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




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




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




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




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




14




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




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




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




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




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




**ITEM
      1B.  UNRESOLVED STAFF COMMENTS**




None.




**ITEM
      2.  PROPERTIES**




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




**ITEM
      3.  LEGAL PROCEEDINGS**




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




On
      January 27, 2006, the Plaintiff, on
      its own initiative, filed an Amended Complaint and Jury Demand in Massachusetts
      Superior Court, adding a non-diverse broker-dealer to the action.  On
      February 22, 2006, the case was removed by the defendants to United States
      District Court for the District of Massachusetts on the basis of diversity
      jurisdiction, but the defendants alleged that the only non-diverse party had
      been fraudulently joined by the Plaintiff.  On February 27, 2006, a
      motion to dismiss was filed by the defendants in the District
      Court.  On April 12, 2006, the District Court affirmed its
      jurisdiction over the case, and dismissed the non-diverse party.  On
      January 10, 2007, the District Court dismissed Plaintiff’s unjust enrichment
      case, but denied the motion of the defendants to dismiss as to the remaining
      claims.  Presently, attorneys for the parties are involved in
      discovery, with a magistrate judge having decided motions to compel brought
      by
      the parties during the Summer of 2007.  A new scheduling order is in
      the process of being developed by the parties for approval by the District
      Court.  It is expected that a trial date may be set for late 2007 or
      early 2008.




15




On
      March
      20, 2007, the Plaintiff commenced a derivative action, in Suffolk Superior
      Court, Commonwealth of Massachusetts.  Paul Bergeron v. Ridgewood
      Electric Power Trust V,*et al*., Suffolk Superior
      Court, Docket No. 07-1205 BLS1 (“Bergeron II”).  The Plaintiff joined
      the Fund and affiliated entities, including the Managing Shareholder and a
      person who is an officer of the Managing Shareholder, alleging that the
      allocation of the proceeds from the sale of certain assets of the Fund and
      affiliated entities to an unaffiliated entity was unfair and sought an
      injunction prohibiting the distribution to shareholders of such
      proceeds.  For a description of the sale transaction, see Item
      1.  “Business – Ridgewood UK.”  The Superior Court denied
      the request by the Plaintiff for an injunction.  The case was then
      removed by the defendants to the same District Court as Bergeron I, but the
      District Court remanded the case to Massachusetts Superior Court on July 5,
      2007, where it is presently pending.




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




On
      August 16, 2006, the Fund and
      several affiliated entities, including the Managing Shareholder, filed a lawsuit
      against the former independent registered public accounting firm for the Fund
      and several affiliated entities, Perelson Weiner LLP (“Perelson Weiner”), in New
      Jersey Superior Court.  The suit alleged professional malpractice and
      breach of contract in connection with audit and accounting services performed
      for the Fund and the other plaintiffs by Perelson Weiner.  On October
      20, 2006, Perelson Weiner filed a counterclaim against the Fund and the other
      plaintiffs, alleging breach of contract due to unpaid invoices in the total
      amount of $1,187,522.37.  Discovery is ongoing and no trial date has
      been set.




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




None.








**PART
      II**








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




**Market
      Information**





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





**Holders**





As
      of June 30, 2007 and December 31,
      2005, 2004 and 2003, there were 1,341, 1,327, 1,319 and 1,315 holders of
      Investor Shares, respectively.





**Dividends**





Fund
      distributions for the three
      years ended December 31, 2005 were as follows (in thousands):





**2005**
            **2004**
            **2003**Distributions
                to Investors
            $1,316
            $3,395
            $1,316Distributions
                per Investor Share
            2
            5
            2Distributions
                to Managing Shareholder
            13
            13
            13




16




**ITEM
      6.  SELECTED FINANCIAL DATA**





The
      following selected consolidated
      financial data should be read in conjunction with the Fund’s consolidated
      financial statements and related notes and Item 7. “Management’s Discussion and
      Analysis of Financial Condition and Results of Operations” of this Form
      10-K.





The
      consolidated statement of
      operations data for the years ended December 31, 2005, 2004 and 2003 and the
      consolidated balance sheet data as of December 31, 2005, 2004 and 2003, are
      derived from audited financial statements included in this Form
      10-K.  The consolidated statement of operations data for the years
      ended December 31, 2002 and 2001 and the consolidated balance sheet data as
      of
      December 31, 2002 and 2001 are derived from audited consolidated financial
      statements that have not been restated, and as a result, may not be comparable
      to subsequent periods. For further discussion, see Note 2 to the Fund’s
      Consolidated Financial Statements included in this Form 10-K.




**December
                    31,**(in
                    thousands)
                
                **2005**
                
                
                **2004**
                
                
                **2003**
                
                
                **2002**
                
                
                **2001**(Restated)
                
                
                (Restated)**Consolidated
                    Statement of Operations Data (1):**Revenues
                
                $
                12,281
                
                
                $
                10,585
                
                
                $
                10,245
                
                
                $
                5,830
                
                
                $
                4,238Net
                    loss
                
                
                (3,959
                )
                
                
                (746
                )
                
                
                (11,026
                )
                
                
                (3,331
                )
                
                
                (3,037
                )Net
                    loss per Investor Share
                
                
                (6
                )
                
                
                (1
                )
                
                
                (17
                )
                
                
                (5
                )
                
                
                (5
                )**Consolidated
                    Balance Sheet Data (1):**Property,
                    plant and equipment, net
                
                
                20,812
                
                
                
                20,171
                
                
                
                22,121
                
                
                
                32,992
                
                
                
                25,961Total
                    assets
                
                
                34,075
                
                
                
                38,889
                
                
                
                47,108
                
                
                
                67,117
                
                
                
                48,835Long-term
                    debt (less current portion)
                
                
                2,609
                
                
                
                1,502
                
                
                
                2,476
                
                
                
                8,002
                
                
                
                -Minority
                    interest
                
                
                6,855
                
                
                
                8,204
                
                
                
                8,327
                
                
                
                14,387
                
                
                
                8,723Shareholders'
                    equity
                
                
                17,749
                
                
                
                19,274
                
                
                
                22,016
                
                
                
                36,316
                
                
                
                39,314







(1)
                Increase in revenue in 2003 and property, plant and equipment and
                total
                assets in 2002, is due to the acquisition of US Hydro in November
                2002, as
                discussed in the Fund’s Consolidated Financial
                Statements.





Quarterly
      financial information is derived from unaudited financial data, which, in the
      opinion of management, reflects all adjustments, which are necessary to present
      fairly the results for such interim periods. It is suggested that the quarterly
      financial data be read in conjunction with the financial statements and the
      notes thereto included in this Form 10-K.





**Nine
                  months eneded September 30,**
              
              
              **Three
                  months eneded September 30,**(in
                  thousands)
              
              **2005**
              
              
              **2004**
              
              
              **2003**
              
              
              **2005**
              
              
              **2004**
              
              
              **2003**(Restated)
              
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)**Consolidated
                  Statement of Operations Data:**Revenues
              
              $
              9,304
              
              
              $
              8,317
              
              
              $
              8,025
              
              
              $
              2,875
              
              
              $
              2,529
              
              
              $
              2,336Net
                  (loss) income
              
              
              (2,591
              )
              
              
              125
              
              
              
              (7,733
              )
              
              
              (1,694
              )
              
              
              (722
              )
              
              
              (4,933
              )Net
                  (loss) income per Investor Share
              
              
              (4
              )
              
              
              -
              
              
              
              (12
              )
              
              
              (3
              )
              
              
              (1
              )
              
              
              (8
              )











17




**September
                    30,**(in
                    thousands)
                
                **2005**
                
                
                **2004**
                
                
                **2003****Consolidated
                    Balance Sheet Data:**
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Property,
                    plant and equipment, net
                
                $
                21,401
                
                
                $
                20,608
                
                
                $
                23,347Total
                    assets
                
                
                35,724
                
                
                
                38,880
                
                
                
                50,965Long-term
                    debt (less current portion)
                
                
                2,916
                
                
                
                1,730
                
                
                
                2,846Minority
                    interest
                
                
                6,917
                
                
                
                8,217
                
                
                
                9,766Shareholders'
                    equity
                
                
                15,920
                
                
                
                19,272
                
                
                
                25,272
 **Six
                    months eneded June 30,**
                
                
                **Three
                    months eneded June 30,**(in
                    thousands)
                
                **2005**
                
                
                **2004**
                
                
                **2003**
                
                
                **2005**
                
                
                **2004**
                
                
                **2003****Consolidated
                    Statement of Operations Data:**
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                6,429
                
                
                $
                5,788
                
                
                $
                5,689
                
                
                $
                3,514
                
                
                $
                3,123
                
                
                $
                2,988Net
                    (loss) income
                
                
                (897
                )
                
                
                847
                
                
                
                (2,800
                )
                
                
                (241
                )
                
                
                1,142
                
                
                
                (617
                )Net
                    (loss) income per Investor Share
                
                
                (1
                )
                
                
                1
                
                
                
                (4
                )
                
                
                -
                
                
                
                2
                
                
                
                (1
                )




**June
                  30,**(in
                  thousands)
              
              **2005**
              
              
              **2004**
              
              
              **2003****Consolidated
                  Balance Sheet Data:**
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)Property,
                  plant and equipment, net
              
              $
              21,502
              
              
              $
              21,078
              
              
              $
              24,008Total
                  assets
              
              
              36,228
              
              
              
              41,704
              
              
              
              57,110Long-term
                  debt (less current portion)
              
              
              3,173
              
              
              
              1,972
              
              
              
              3,118Minority
                  interest
              
              
              6,914
              
              
              
              8,515
              
              
              
              11,836Shareholders'
                  equity
              
              
              17,235
              
              
              
              22,447
              
              
              
              30,831




**Three
                  months eneded March 31,**(in
                  thousands)
              
              **2005**
              
              
              **2004**
              
              
              **2003****Consolidated
                  Statement of Operations Data:**
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)Revenues
              
              $
              2,915
              
              
              $
              2,665
              
              
              $
              2,701Net
                  loss
              
              
              (656
              )
              
              
              (295
              )
              
              
              (2,183
              )Net
                  loss per Investor Share
              
              
              (1
              )
              
              
              -
              
              
              
              (3
              )




**March
                  31,**(in
                  thousands)
              
              **2005**
              
              
              **2004**
              
              
              **2003****Consolidated
                  Balance Sheet Data**
              
              (Restated)
              
              
              (Restated)
              
              
              (Restated)Property,
                  plant and equipment, net
              
              $
              21,693
              
              
              $
              21,585
              
              
              $
              26,857Total
                  assets
              
              
              39,458
              
              
              
              41,602
              
              
              
              58,820Long-term
                  debt (less current portion)
              
              
              1,294
              
              
              
              2,221
              
              
              
              3,317Minority
                  interest
              
              
              8,438
              
              
              
              8,409
              
              
              
              12,184Shareholders'
                  equity
              
              
              18,520
              
              
              
              21,419
              
              
              
              31,478






18


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




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







**Restatement
      of Financial Statements**





As
      previously disclosed in its Form
      8-K/A filed with the SEC on May 22, 2007, the consolidated financial statements
      of the Fund included in the Fund’s Quarterly Reports on Form 10-Q and the Fund’s
      Annual Reports on Form 10-K for each of the periods beginning with the
      three-month period ended March 31, 2003 and continuing through the three and
      nine-month periods ended September 30, 2005 should no longer be relied upon
      and
      that those financial statements should be restated to conform to generally
      accepted accounting principles. The determination to restate these financial
      statements and selected financial data was made by the Fund and the Managing
      Shareholder of the Fund on April 18, 2007, as a result of the identification
      of
      errors, including the purchase accounting for the US Hydro projects, impairment
      of long-lived assets, waiver of management fees payable to the Managing
      Shareholder and accounting for professional services.  Accordingly,
      this Annual Report on Form 10-K contains restated financial statements for
      the
      periods mentioned above.





**Overview**





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




The
      Fund
      has focused primarily on small-scale electricity generation projects using
      renewable sources of fuel and on water treatment facilities in remote locations
      serving hotel resort developments.  These projects allow the Fund to
      develop secure long-term positions in attractive specialty markets for products
      and services provided by its projects and companies.  While the Fund
      may make additional investments in the projects and companies it currently
      owns,
      it does not anticipate future investment in projects or companies outside its
      current portfolio.




As
      of
      December 31, 2005, the projects in which the Fund has investments were located
      in the United States, the United Kingdom and Egypt.  As of that date,
      the Fund had investments in electricity generating projects in the US with
      total
      capacity of 15 megawatts (“MW”), in electricity generating projects in the UK
      with total capacity of 48.7MW and in projects in Egypt with the capacity to
      produce approximately 24,500 cubic meters (approximately 6.5 million gallons)
      of
      potable water per day and electricity generating capacity of
      29.7MW.




The
      Fund’s accompanying consolidated
      financial statements includes the financial statements of Ridgewood US Hydro
      Corporation (“US Hydro”) and Ridgewood Near East Holding LLC
      (“NEH”).  The Fund’s consolidated financial statements also includes
      the Fund’s 30.4% interest in Ridgewood UK LLC (“RUK”) which is accounted for
      under the equity method of accounting as the Fund has the ability to exercise
      significant influence but does not control the operating and financial policies
      of RUK.





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





19




**Critical
      Accounting Policies and Estimates**





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





*Revenue
      Recognition*





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





*Accounts
      Receivable*





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





*Property,
      Plant and Equipment*





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





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





*Impairment
      of Goodwill, Intangibles and Long-Lived Assets*





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





20




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





*Income
      taxes*





The
      Fund’s Egyptian subsidiaries have a
      ten year income tax holiday that expires on December 31,
      2010.  Accordingly, no provision has been made for Egyptian income
      taxes in the Fund’s consolidated financial statements.





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





Except
      for US Hydro, no provision is
      made for US income taxes in the Fund’s 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.





*Foreign
      Currency Translation*





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





*Management
      Fee*





The
      Fund is charged management fees
      from its Managing Shareholder. Unpaid management fees accrue interest at 10%
      per
      annum. The Managing Shareholder has periodically waived its right to receive
      a
      portion of the fees and related interest. Any waived management fees and
      interest are deemed capital contributions at the time of waiver.





**Results
      of Operations and Changes in Financial Condition**





*Year
      ended December 31, 2005 compared to the year ended December 31,
      2004*




Revenues
        increased by $1.7 million, or 16.0%, to $12.3 million in 2005 compared to
        $10.6
        million in 2004. This increase was primarily due to increases in revenues
        from
        the Egyptian operations of $1.3 million, primarily attributable to increases
        in
        water volume sales due to greater tourism in the Fund’s market area.
        Additionally, revenues from US Hydro operations increased by $443,000, or
        8.7%,
        in 2005 compared to 2004 due to higher outputs resulting from higher levels
        of
        precipitation.





Cost
      of
      revenues for 2005 was $8.7 million compared to $8.2 million for 2004, an
      increase of $547,000, or 6.7%. The cost of revenues for Egypt Projects increased
      by approximately $576,000 to $5.6 million in 2005 primarily due to the increase
      in fuel, direct materials and wages resulting from the increase in water volumes
      processed.  The cost of revenues for US Hydro was $3.1 million for
      2005 and 2004 as its costs of revenues are substantially fixed and do not
      fluctuate directly with revenues.





21





Gross
      profit increased by $1.1 million, or 47.6%, to $3.5 million in 2005 from $2.4
      million in 2004. The gross profit of Egyptian operations increased by $677,000
      to $1.1 million in 2005 from $423,000 in 2004, primarily due to the increase
      in
      revenue partially offset by higher fuel and direct material
      costs.   US Hydro gross profit increased by $472,000 to $2.4
      million in 2005 from $1.9 million in 2004, primarily due to the increase in
      revenues.





General
      and administrative expenses increased by $81,000 to $3.5 million in 2005 from
      $3.4 million in 2004.  The increase was primarily attributable to
      higher professional fees and travel expenses relating to the US Hydro
      operations.





The
      management fee due to the Managing Shareholder of $1.6 million for 2005 was
      comparable to the 2004 management fee.  Management fee is paid to the
      Managing Shareholder for certain management, administrative and advisory
      services, office space and other facilities provided to the Fund.  In
      2005, the Managing Shareholder waived its right to receive the management fee
      and any accrued interest, and in 2004, waived its right to receive all but
      $317,000 of the management fee.





Interest
      expense increased by $119,000 to $995,000 in 2005 from $876,000 in 2004,
      primarily attributable to the increase in interest expense on unpaid management
      fees payable to the Managing Shareholder.





In
      2005,
      the Fund recorded an equity loss of $833,000 from its investment in RUK compared
      to an equity loss of $699,000 in 2004.  The increase in equity loss of
      $134,000 was the result of the increase in income tax expense and interest
      expense at RUK resulting from higher outstanding borrowings associated with
      the
      RUK expansion construction program.  This was partially offset by the
      increase in gross profit resulting from higher production in 2005 compared
      to
      2004.





The
      Fund
      recorded a loss on sale of ZAP securities of $956,000 in 2005 compared to a
      gain
      of $2.1 million in 2004.  In 2005, the Fund sold its remaining 537,000
      ZAP shares at a loss.  In 2004, the Fund recorded a gain of $310,000
      resulting from the sale of ZAP securities and a gain of $1.8 million resulting
      from distribution of 772,500 ZAP shares to the Fund’s shareholders.





Other
      income increased by $448,000 from $125,000 in 2004 to $573,000 in 2005. Other
      income in 2005 includes a gain of $589,000 related to recovery of advances
      to
      the Fund’s Dubai operations. Other income in 2004 includes a net gain on sale of
      US Hydro notes receivable of $175,000, representing $200,000 on the sale of
      the
      Lahontan notes receivable, partially offset by legal fees of $25,000 incurred
      on
      the sale of the notes.





In
      2005,
      the Fund recorded income tax expense of $138,000, compared to an income tax
      benefit of $773,000 in 2004. The increase in net income tax expenses of $911,000
      was primarily attributable to the recognition of timing differences between
      book
      and tax basis resulting from the loss on the sale of the Lahontan notes
      receivable and depreciation and amortization expense of US Hydro
      assets.





Minority
      interests in the results of subsidiaries increased by $189,000 from an interest
      in a subsidiary loss of $154,000 in 2004 to an interest in a subsidiary gain
      of
      $35,000 in 2005.  This was primarily due to the increase in the net
      income of US Hydro projects in 2005 as compared to 2004.




Total
      assets at December 31, 2005 were $34.1 million, a decrease of $4.8 million
      from
      the December 31, 2004 balance of $38.9 million. This decrease was primarily
      due
      to a decrease in investments of $4 million due to the losses in RUK and the
      disposition of ZAP shares, and a decrease of $1.6 million in intangibles
      attributable to the periodic amortization of recorded balances, offset by an
      increase in cash and cash equivalents of $1.1 million as discussed below in
      “Liquidity and Capital Resources”. Total liabilities decreased $3.3 million from
      $19.6 million at December 31, 2004 to $16.3 million at December 31, 2005,
      primarily due to decreased long-term debt of $937,000 resulting from normally
      scheduled payments and a decrease in amounts due to affiliates of $2.1 million.
      The decrease in due to affiliates was partially due to forgiveness of management
      fees due to the Managing Shareholder, as discussed above.




*Year
      ended December 31, 2004 compared to the year ended December 31,
      2003*





Revenues
      increased by $340,000, or 3.3%, to $10.6 million in 2004, as compared to $10.2
      million in 2003. Revenues from the Egyptian operations increased by $1.1 million
      to $5.5 million in 2004 from $4.4 million in 2003, primarily due to the increase
      in water volume sales due to greater tourism in the Fund’s market area in 2004
      as compared to 2003. US Hydro revenues decreased by $749,000, or 12.8%, to
      $5.1
      million in 2004 as compared to 2003 due to lower outputs resulting from lower
      levels of precipitation.





22




Cost
      of
      revenues for 2004 was $8.2 million, as compared to $7.4 million for 2003, an
      increase of $735,000, or 9.9%. The cost of revenues for Egyptian operations
      increased by $1.1 million to $5.1 million for the year ended December 31, 2004
      from $4 million for the year ended December 31, 2003, primarily due to the
      increase in fuel and direct materials resulting from increases in water volumes
      processed.  This increase in the cost of revenues was partially offset
      by the decrease in cost of revenues for US Hydro by $274,000, to $3.1 million
      in
      2004 as compared to 2003, attributable to the decrease in amortization expense
      resulting from the write-down of long-lived assets for certain US Hydro projects
      during the fourth quarter of 2003.





Gross
      profit decreased by $395,000, or 14.1%, to $2.4 million in 2004 compared to
      2003. This was primarily attributable to the decrease in gross profit from
      the
      US Hydro operations of $475,000 as compared to 2003 to $2 million in 2004
      resulting from lower revenues and cost of revenues, as discussed
      above.   This difference in 2004 as compared to 2003 was
      partially offset by a slight increase in gross profit from the Egyptian
      operations of $80,000 to $443,000 in 2004, resulting from increased revenue,
      largely offset by increases in cost of revenues, as discussed
      above.





General
      and administrative expenses decreased by $932,000 to $3.4 million in 2004 from
      $4.3 million in 2003. In 2003, the Fund recorded an expense relating to the
      termination of an agreement with a former consultant which resulted in a charge
      of $567,000 which represents the present value of the remaining payment
      obligations.  In addition, bad debt expense decreased by $301,000 in
      2004 as compared to 2003 due to improved recoverability of accounts receivable
      in Egyptian operations.





The
      management fee due to the Managing Shareholder was $1.6 million for each of
      2004
      and 2003.  For 2004, all but $317,000 of the management fee and
      accrued interest was waived; for 2003, all but $150,000 was waived.





In
      2003,
      the Fund recorded a write-down of notes receivable of $3.4 million due to the
      decrease in the estimated future cash flow of the Lahontan Project and the
      settlement of those notes with the obligor, the Truckee-Carson Irrigation
      District (“TCID”).   At the time of the acquisition of US Hydro,
      the Fund valued the obligations under the notes receivable that were tied to
      the
      Lahontan Project at $7.4 million.  In 2003, US Hydro renegotiated the
      TCID payment obligations, which resulted in a settlement between the parties
      in
      2004 under which TCID made a $4 million cash payment to US Hydro in full
      satisfaction of its obligations.





In
      2003, the Fund recorded an impairment of goodwill of $6.4 million under SFAS
      No.
      142.  The goodwill balance resulted from the excess of the US Hydro
      acquisition cost over the fair value of the net assets of US Hydro.





The
      Fund
      recorded impairments of property, plant and equipment of $75,000 and $801,000
      for 2004 and 2003, respectively.  All of the 2004 impairment, and
      $189,000 of the 2003 impairment, was due to decreases in the estimated future
      cash flow of certain US Hydro projects.  The remaining 2003 impairment
      of $612,000 related to impairment of assets acquired in the Sinai
      acquisition.





Interest
      expense decreased by $116,000 to $876,000 in 2004 compared to $992,000 in 2003.
      The decrease was primarily due to repayment of debt that was assumed in the
      US
      Hydro acquisition and of the outstanding borrowings of the Egyptian
      operations.  This was partially offset by the increase in interest
      expense on unpaid management fees payable to the Managing
      Shareholder.





In
      2004,
      the Fund recorded an equity loss of $699,000 from its investment in RUK,
      compared to an equity loss of $610,000 from such investment in 2003. This was
      primarily due to an increase in interest expense at RUK due to higher
      outstanding borrowings associated with the RUK expansion construction program,
      impairment expense and loss on sale-leaseback transactions recognized by RUK
      in
      2004 as compared to 2003.  This decrease was partially offset by the
      increase in gross profit in 2004 as compared to 2003 as a result of RUK
      experiencing increased revenues driven by increased output.





23




In
      2004
      and 2003, the Fund recorded gains on the distribution and sale of ZAP securities
      of $2.1 million and $76,000, respectively.  In 2004, this was
      attributable to gains of $310,000 resulting from the sale of ZAP shares and
      a
      gain of $1.8 million resulting from the distribution of 772,500 ZAP shares
      to
      the Fund’s shareholders.  In 2003, the Fund recorded a gain on the
      sale of 118,000 shares.





Other
      income (expense) increased by $532,000 from an expense of $407,000 in 2003
      to
      income of $125,000 in 2004.  Other income in 2004 includes a net gain
      on sale of a US Hydro note of $175,000.  The gain represents $200,000
      on the sale of the Lahontan note receivable held by US Hydro Projects, partially
      offset by legal fees of $25,000 incurred on the sale of the
      note.  Also, other income in 2004 includes an Egyptian foreign
      exchange loss of $56,000 resulting from the purchase of equipment from various
      international third parties compared to a gain on foreign exchange of $93,000
      in
      2003.  Additionally, the Fund recorded a loss of $499,000 in 2003 from
      the disposition of equipment in its Egyptian operations.





In
      2004,
      the Fund recorded an income tax benefit of $773,000 compared to a $2.5 million
      benefit in 2003.  The decrease in income tax benefit was primarily
      attributable to the increase in current year pre-tax income and the recognition
      of temporary timing differences between the book and tax basis for the
      depreciation and amortization expense of US Hydro operations.





Minority
      interest in the loss of subsidiaries decreased $3.9 million, from $4.1 million
      in 2003 to $154,000 in 2004.  The decrease was due primarily to the
      reduction in losses from 2003 to 2004 at the Fund’s US Hydro
      subsidiary.




Total
      assets at December 31, 2004 were $38.9 million, a decrease of $8.2 million
      from
      the December 31, 2003 balance of $47.1 million. This decrease was primarily
      due
      to a net decrease in notes receivable of $2.5 million (primarily due to the
      collection of the US Hydro note receivable of $4 million and the recording
      of a
      notes receivable of $1.6 million resulting from the termination of a US Hydro
      power purchase agreement), decreases of $2 million in property, plant and
      equipment and $3 million in intangibles, both of which were primarily due to
      periodic amortization and depreciation of recorded balances. Total liabilities
      decreased $5.5 million from $25.1 million at December 31, 2003 to $19.6 million
      at December 31, 2004, primarily due to decreased long-term debt of $4.9 million,
      which was primarily due to the repayment of the US Hydro term loan with the
      proceeds from the collection of the US Hydro note. Additionally, the total
      liabilities decrease includes a decrease of $1.9 million due to the utilization
      of deferred income taxes payable.




*Nine
      months ended September 30, 2005 compared to the nine months ended September
      30,
      2004*





Total
      revenues increased $987,000, or 11.9%, from $8.3 million for the nine months
      ended September 30, 2004 to $9.3 million during the nine months ended September
      30, 2005.  This was primarily due to an increase in revenues from the
      Egyptian operations of $790,000, primarily due to an increase in water volume
      sales due to greater tourism in the Fund’s market area and an increase in
      revenues from US Hydro operations of $197,000 due to the higher outputs
      resulting from greater precipitation.





Cost
      of
      revenues for the nine months ended September 30, 2005 was $6.5 million compared
      to $6.2 million for the same period in 2004. The increase of $266,000, or 4.3%,
      was due to an increase in the cost of revenue from Egyptian operations of
      $372,000 to $4.3 million during the first nine months of 2004, partially offset
      by a decrease in cost of revenues from US Hydro operations of $106,000 to $2.2
      million for the first nine months of 2005.   The increase in
      Egyptian operations in 2005 when compared to 2004 was primarily due to the
      increase in consumables, repairs and maintenance expenses resulting from the
      increase in water volumes processed.  The decrease in cost of revenues
      for US Hydro operations was attributable to the decrease in amortization expense
      resulting from the impairment of intangibles in the fourth quarter of
      2004.





Gross
      profit increased $721,000 from $2.1 million in the first nine months of 2004
      to
      $2.8 million for the same period in 2005.  This gross profit increase
      was primarily due to the increase in gross profit of US Hydro operations of
      $304,000 resulting from the increase in revenues and decrease in amortization
      expenses.  The gross profit of Egyptian operations increased $417,000
      due to the increase in revenues partially offset by increase in consumables,
      repairs and maintenance expenses.





24




General
      and administrative expenses increased $239,000 to $2.8 million for the nine
      months ended September 30, 2005 from $2.6 million for the nine months ended
      September 30, 2004. The increase in expenses was primarily due to the increase
      in accounting and professional fees.





The
      management fee due to the Managing Shareholder was $1.2 million for each of
      the
      nine months ended September 30, 2005 and 2004.





Interest
      expense for the nine months ended September 30, 2005 was $739,000 compared
      to
      $647,000 during the same period in 2004.  The increase was primarily
      due to the expense incurred on the unpaid balance of management fees payable
      to
      the Managing Shareholder.





The
      equity loss from RUK decreased $75,000 to $425,000 for the nine months ended
      September 30, 2005 from $500,000 for the nine months ended September 30,
      2004.  This was primarily due to the increase in gross profit
      resulting from increased output and decrease in professional fees, partially
      offset by the increase in interest expenses at RUK due to higher outstanding
      borrowings associated with the RUK expansion construction program.





The
      Fund
      recorded a loss on distribution and sale of ZAP securities of $708,000 in the
      first nine months of 2005 compared to gain of $2 million during the same period
      in 2004.  In the first nine months of 2005, the Fund sold 432,000 ZAP
      shares at a market price lower than their carrying value.  In the same
      period in 2004, the Fund recorded a gain on distribution of 772,500 ZAP shares
      to the Fund’s shareholders.





Other
      income increased $399,000 from $189,000 in the first nine months of 2004 to
      $588,000 in the first nine months of 2005. In the first nine months of 2005,
      other income included $594,000 of recovery of advances related to the Dubai
      operations. In the first nine months of 2004, other income primarily
      includes a net gain on sale of a US Hydro note of $175,000.





In
      the
      first nine months of 2005, the Fund recorded an income tax expense of $62,000
      compared to an income tax benefit of $723,000 in the first nine months of 2004.
      This change related to income taxes was primarily attributable to the decreases
      in the temporary timing differences between the book and tax basis for the
      depreciation and amortization expense of US Hydro operations.





Minority
      interest in the earnings of subsidiaries was $83,000 for the first nine months
      of 2005 and minority interest in the losses of subsidiaries was $37,000 for
      the
      first nine months of 2004. The increase was attributable to the increase in
      net
      income of US Hydro.





Total
      assets at September 30, 2005 were $35.7 million, a decrease of $3.1 million
      from
      the December 31, 2004 balance of $38.9 million. This decrease was primarily
      due
      to a decrease in investments of $3.3 million due to the losses in RUK and the
      disposition of ZAP shares, and a decrease of $1.2 million in intangibles
      attributable to the periodic amortization of recorded balances, offset by an
      increase in cash and cash equivalents of $1.4 million as discussed below in
      “Liquidity and Capital Resources”. Total liabilities increased $189,000 from
      $19.6 million at December 31, 2004 to $19.8 million at September 30,
      2005.




*Nine
      months ended September 30, 2004 compared to the nine months ended September
      30,
      2003*





Total
      revenues increased $292,000 or 3.6% to $8.3 million for the nine months ended
      September 30, 2004 from $8 million for the nine months ended September 30,
      2003.
      In the first nine months of 2004, revenues from Egyptian operations increased
      by
      $927,000, or 28.4%, primarily due to an increase in volume sales attributable
      to
      increases in tourism in the Fund’s market area compared to the first nine months
      of 2003.  This was partially offset by decrease in revenues of
      $635,000 from US Hydro operations primarily attributable to the lower output
      resulting from decreased precipitation.





Cost
      of
      revenues for the nine months ended September 30, 2004 was $6.2 million, as
      compared to $5.2 million for the same period in 2003, an increase of $1 million
      or 19.4%. This increase was primarily attributable to higher cost of revenues
      from Egyptian operations resulting from higher repairs and maintenance expenses
      of $982,000 in the nine months ended September 30, 2004 associated with greater
      water volumes processed.





25




Gross
      profit decreased by $724,000, or 25.9%, from $2.8 million for the nine months
      ended September 30, 2003 to $2.1 million for the nine months ended September
      30,
      2004. This decrease resulted from a decrease in gross profit from the US Hydro
      operations of $669,000 primarily due to the decrease in revenues, as discussed
      above.  In addition, gross profit from the Egyptian operations
      decreased $55,000 attributable to higher repairs and maintenance expense
      partially offset by increased revenues, as discussed above.





General
      and administrative expenses increased by $426,000 to $2.5 million for the nine
      months ended September 30, 2004 compared to $2.1 million for the nine months
      ended September 30, 2003, primarily due to advances relating to the Fund’s Dubai
      operations.





The
      management fee due to the Managing Shareholder was $1.2 million for each of
      the
      nine months ended September 30, 2004 and 2003.





During
      the first nine months of 2003, the Fund recorded a write-down of notes
      receivable of $3.4 million due to the estimated decrease in the future cash
      flow
      of the Lahontan Project and the settlement of those notes with the obligor,
      the
      TCID.  At the time of the acquisition of US Hydro, the Fund valued the
      obligations under the notes receivable that were tied to the Lahontan Project
      at
      $7.4 million.  In 2003, US Hydro renegotiated TCID payment obligations
      which resulted in a settlement between the parties under which TCID made a
      $4
      million cash payment to US Hydro in full satisfaction of its
      obligations.





During
      the third quarter of 2003, the Fund recorded an impairment of goodwill of $6.4
      million under SFAS No. 142.  The Goodwill balance resulted from the
      excess of the US Hydro acquisition cost over the fair value of the net assets
      of
      US Hydro.





Interest
      expense for the nine months ended September 30, 2004 was $647,000 compared
      to
      $795,000 during the same period in 2003. The decrease of $148,000 was primarily
      due to the repayment of the debt assumed in the US Hydro acquisition and of
      the
      outstanding borrowings of the Egyptian operations. This was partially offset
      by
      the increase in interest expense on unpaid management fees payable to the
      Managing Shareholder.





During
      the first nine months of 2004, the Fund recorded an equity loss of $500,000
      from
      RUK, compared to a recorded equity loss of $522,000 for the same period in
      2003.
      The slight decrease in equity loss was the result of an increase in gross profit
      primarily due to an increased output, partially offset by an increase in
      interest expense at RUK due to higher outstanding borrowings associated with
      the
      RUK expansion construction program.





The
      Fund
      recorded a gain on the distribution and sale of ZAP securities of $2 million
      for
      the nine months ended September 30, 2004, compared to a gain of $76,000 during
      the same period in 2003.  During the second and third quarters of
      2004, the Fund recorded gains from the distribution of 772,500 ZAP shares to
      its
      shareholders.   During the first nine months of 2003, the Fund
      recorded a gain on the sale of 118,000 ZAP shares.





During
      the nine months ended September 30, 2004, the Fund recorded other income of
      $189,000 compared to other expense of $545,000 for the same period in
      2003.  In 2004, other income includes a net gain on sale of the
      Lahontan notes receivable of $175,000 and gain on sale of equipment of
      $6,000.  During the first nine months of 2003, the Egyptian operations
      sold power generation equipment for a loss of $561,000.




During
      the nine months ended September 30, 2004, the Fund recorded an income tax
      benefit of $723,000 compared to a $1.9 million benefit during the same period
      in
      2003.  The decrease in income tax benefit was primarily attributable
      to the increase in current year pre-tax income and the recognition of temporary
      timing differences between the book and tax basis for the depreciation and
      amortization expense of US Hydro operations.





Minority
      interest in the loss of subsidiaries was $37,000 for the nine months ended
      September 30, 2004 compared to the minority interest in the loss of subsidiaries
      of $2.6 million during the nine months ended September 30, 2003.  The
      increase was due primarily to the increase in earnings at US Hydro in
      2004.





26




Total
      assets at September 30, 2004 were $38.9 million, a decrease of $8.2 million
      from
      the December 31, 2003 balance of $47.1 million. This decrease was primarily
      due
      to a net decrease in notes receivable of $4.1 million primarily due to the
      collection of the US Hydro note receivable, decreases of $1.5 million in
      property, plant and equipment and $1.3 million in intangibles, both of which
      were primarily due to periodic amortization and depreciation of recorded
      balances. Total liabilities decreased $5.5 million from $25.1 million at
      December 31, 2003 to $19.6 million at September 30, 2004, primarily due to
      decreased long-term debt of $4.7 million, which was primarily due to the
      repayment of the US Hydro term loan with the proceeds from the collection of
      the
      US Hydro note. Additionally, the decrease in total liabilities included a
      decrease of $2.3 million due to the utilization of deferred income taxes
      payable, offset by an increase in due to affiliates of $1.1
      million.




*Three
      months ended September 30, 2005 compared to the three months ended September
      30,
      2004*





Total
      revenues increased $346,000, or 13.7%, to $2.9 million in the third quarter
      of
      2005, compared to $2.5 million during the third quarter of 2004.  This
      increase in revenues was primarily due to increased revenues from Egyptian
      operations of $488,000, resulting from increased water volume sales due to
      greater tourism in the Fund’s market area.  This increase was
      partially offset by the decrease in revenues from US Hydro of $142,000 due
      to
      the lower outputs resulting from lower precipitation.





Cost
      of
      revenues for the third quarter of 2005 was $2.4 million, an increase of $84,000,
      or 3.5%, compared to third quarter of 2004.  This increase was due to
      an increase in the cost of revenues from Egyptian operations of $109,000 to
      $1.7
      million during the third quarter of 2005, partially offset by the decrease
      in
      cost of revenues from US Hydro operations by $25,000 to $764,000.  The
      increase in Egyptian operations cost of revenues was primarily due to the
      increase in consumables, repairs and maintenance expenses resulting from the
      increase in revenues.  The decrease in cost of revenues for US Hydro
      operations was attributable to the decrease in repairs and maintenance as well
      as decreased amortization expense resulting from the impairment of intangibles
      in the fourth quarter of 2004.





Gross
      profit increased $262,000 from $159,000 in the third quarter of 2004 to $421,000
      during the same period in 2005.  This increase was primarily due to
      the increase of $379,000 in gross profit of the Egypt operations resulting
      from
      the increase in revenues, partially offset by the decrease of $117,000 in gross
      profit of US Hydro operations resulting from the decrease in
      revenues.





General
      and administrative expenses decreased $471,000 to $592,000 in the third quarter
      of 2005 primarily attributable to the decrease in expenses relating to Dubai
      project, which was disposed in the first quarter of 2005.





In
      the
      third quarter of 2005, the Fund recorded an equity loss of $356,000 from RUK
      compared to an equity loss of $189,000 during the same period in
      2004.  The larger equity loss was primarily attributable to increased
      interest expense resulting from higher outstanding borrowings under the UK
      Projects construction advances.





The
      Fund
      recorded loss on distribution and sale of ZAP securities of $568,000 in the
      third quarter of 2005 compared to gain of $591,000 in the third quarter of
      2004.  In third quarter of 2005, the Fund sold 260,000 ZAP
      shares.  During the third quarter of 2004, the Fund recorded a gain
      from the distribution of approximately 273,000 ZAP shares to its
      shareholders.





Minority
      interest in the earnings of subsidiaries decreased from $302,000 in the third
      quarter of 2004 to $70,000 in the third quarter of 2005. The decrease in
      earnings of subsidiaries was primarily due to the increase in gross profit
      provided by the Egypt projects and a decrease in its general and administrative
      expenses, partially offset by the decrease in gross profit provided by the
      US
      Hydro operations.





*Three
      months ended September 30, 2004 compared to the three months ended September
      30,
      2003*





Total
      revenues increased $193,000, or 8.3%, to $2.5 million in the third quarter
      of
      2004 compared to $2.3 million during the same quarter in
      2003.  Revenues from the Egyptian operations increased $200,000
      primarily due to an increase in water volume sales resulting from greater
      tourism in the Fund’s market area.  Revenues from the US Hydro
      operations decreased $7,000.





27




Cost
      of
      revenues increased from $1.8 million in the third quarter of 2003 to $2.4
      million in the third quarter of 2004, an increase of $572,000, or
      31.8%.  The increase in cost of revenues was primarily attributable to
      an increase in cost of revenues from Egyptian operations resulting from higher
      consumables, repairs and maintenance expenses due to increased water volumes
      processed.





Gross
      profit was $159,000 in the third quarter of 2004, a decrease of $379,000, or
      70%, from $538,000 in the third quarter of 2003.  This decrease was
      primarily due to the decrease in gross profit of Egyptian operations by $379,000
      from $474,000 in the third quarter of 2003 to $95,000 during the same period
      in
      2003.  The decrease in gross profit from the Egyptian operations was
      attributed to the increase in consumables, repairs and maintenance expenses
      partially offset by increased revenues, as described above.





General
      and administrative expenses increased $387,000 from $676,000 in the third
      quarter 2003 to $1.1 million in the third quarter of 2004 primarily due to
      an
      increase in advances of $253,000 relating to the Fund’s Dubai operations and
      higher insurance expenses at the Egyptian operations.





In
      the
      third quarter of 2003, the Fund recorded an impairment of goodwill of $6.4
      million. The goodwill impairment resulted from an excess of the US Hydro
      acquisition cost over the fair value of the net assets of US Hydro.





The
      Fund
      recorded a gain on distribution and sale of ZAP securities of $591,000 in the
      third quarter of 2004 as compared to a gain of $76,000 in the third quarter
      of
      2003.  During the third quarter of 2004, Fund recorded a gain from the
      distribution of approximately 273,000 ZAP shares to its
      shareholders.  In 2003, the Fund sold 118,000 ZAP
      securities.





The
      Fund
      recorded an income tax benefit of $49,000 in the third quarter of 2004 compared
      to an income tax benefit of $506,000 during the same period in
      2003.  The decrease in income tax benefit was primarily attributable
      to the decrease in current year pre-tax loss and the recognition of temporary
      timing differences between the book and tax basis for the depreciation and
      amortization expense of the US Hydro operations.





Minority
      interest in the loss of subsidiaries decreased $1.6 million, from $1.8 million
      in the third quarter of 2003 to $302,000 in the third quarter of
      2004.  The decrease was primarily attributable to the impairment of
      goodwill recorded for US Hydro projects in 2003.





*Six
      months ended June 30, 2005 compared to the six months ended June 30,
      2004*





Revenues
      increased $641,000, or 11.1%,
      to $6.4 million for the six months ended June 30, 2005 as compared to $5.8
      million for the six months ended June 30, 2004. Of this increase in revenues,
      $340,000 was due to higher revenues from the US Hydro operations resulting
      from
      the higher outputs due to higher levels of precipitation.  The
      remaining $301,000 increase was due to increased revenues from the Egyptian
      operations due to increased demand resulting from greater tourism in the Fund’s
      market area compared to 2004.





Cost
      of
      revenues increased $182,000, or 4.7%, to $4.1 million for the six months ended
      June 30, 2005 from $3.9 million for the six months ended June 30,
      2004.  The cost of revenues for Egyptian operations increased $263,000
      to $2.5 million for the six months ended June 30, 2005 primarily due to higher
      operating costs including consumables, repairs and maintenance expenses
      associated with greater water volumes processed.  The cost of revenues
      for US Hydro operations decreased $81,000 to $1.5 million for the six months
      ended June 30, 2005 due to a decrease in repairs and maintenance and lower
      amortization expenses resulting from the impairment of intangibles in the fourth
      quarter of 2004.





Gross
      profit increased $459,000, or 24%, in the first half of 2005 to $2.3 million
      from $1.9 million for the first half of 2004. The increase in gross profit
      was
      primarily due to higher revenues at US Hydro and Egyptian operations, partially
      offset by increase in Egypt cost of revenues.





General
      and administrative expenses increased $710,000 to $2.2 million for the six
      months ended June 30, 2005 from $1.5 million for the six months ended June
      30,
      2004. This increase was attributable to the termination of an agreement with
      a
      former consultant in 2005, which resulted in an expense of $927,000,
      representing the present value of future payments to be made under the
      settlement of the agreement, and an increase of $105,000 in higher professional
      fees. This increase was partially offset by a decrease in advances relating
      to
      the Dubai operations which were discontinued in the first quarter of
      2005.





28




The
      management fee due to the Managing Shareholder was $823,000 for each of the
      first six months of 2005 and 2004.





In
      the
      first half of 2005, the Fund recorded an equity loss of $69,000 from RUK
      compared to an equity loss of $311,000 for the first half of 2004. The decrease
      in equity loss was a result of the higher revenues received as a result of
      the
      increased production, partially offset by the increase in interest expense
      at
      RUK due to higher outstanding borrowings associated with the RUK expansion
      construction program.





In
      first
      half of 2005, the Fund recorded a loss on distribution and sale of ZAP
      securities of $140,000 compared to a gain of $1.4 million in the first half
      of
      2004.  In 2005, the Fund sold 172,000 ZAP shares at a price lower than
      their carrying value.  In the first half of 2004, the Fund recorded a
      gain on distribution and sale of approximately 499,000 ZAP shares to the Fund’s
      shareholders.





Other
      income increased $419,000 to $593,000 for the first six months of 2005 from
      $174,000 for the first six months of 2004. For the first six months of 2005,
      other income includes a gain of $599,000 due to the recovery of advances related
      to the Dubai operations. In the first six months of 2004, other income includes
      a net gain on sale of US Hydro note of $175,000.





In
      the
      first half of 2005, the Fund recorded an income tax expense of $62,000 compared
      to income tax benefit of $674,000 in the first half of 2004. The increase in
      income tax expense was primarily attributable to the recognition of temporary
      timing differences between the book and tax basis for the deprecation and
      amortization expense of the US Hydro Projects.





Minority
      interest in the earnings of subsidiaries decreased from $265,000 in the first
      half of 2004 to $153,000 in the first half of 2005. The decrease in the earnings
      of subsidiaries was attributable to the decrease in net income of the US Hydro
      and Egyptian operations.




Total
      assets at June 30, 2005 were $36.2 million, a decrease of $2.7 million from
      the
      December 31, 2004 balance of $38.9 million. This decrease was primarily due
      to a
      decrease in investments of $2.3 million due to the losses in RUK and the
      disposition of ZAP shares, and a decrease of $782,000 in intangibles
      attributable to the periodic amortization of recorded balances, offset by an
      increase in property, plant and equipment of $1.3 million primarily due to
      capital expenditures in the Fund’s Egyptian operations. Total liabilities
      decreased $622,000 from $19.6 million at December 31, 2004 to $18.9 million
      at
      September 30, 2005.




*Six
      months ended June 30, 2004 compared to the six months ended June 30,
      2003*





Total
      revenues increased $99,000, or 1.7%, to $5.8 million for the six months ended
      June 30, 2004 compared to the first six months of 2003. Revenues from US Hydro
      operations totaled $3.3 million for the first six months of 2004, a decrease
      of
      $628,000 from the comparable 2003 period due to lower output resulting from
      decreased precipitation. Revenues from Egyptian operations increased $727,000
      to
      $2.5 million for the first six months of 2004, resulting from an increase in
      volume sales associated with greater tourism in the Fund’s market area in 2004
      as compared to 2003.





Cost
      of
      revenues for the six months ended June 30, 2004 was $3.9 million compared to
      $3.4 million during the same period in 2003. The increase of $444,000, or 12.9%,
      was primarily attributable to the Egyptian operations experiencing higher
      operating costs due to increased water volumes processed during the first half
      of 2004.





Gross
      profit decreased $345,000, or 15.3%, from $2.3 million for the six months ended
      June 30, 2003 to $1.9 million during the same period in 2004. The gross profit
      for US Hydro operations decreased $669,000 to $1.7 million during the first
      six
      months of 2004 due to lower revenues. Gross profit from the Egyptian operations
      increased $324,000 to $236,000 during six months ended June 30, 2004 primarily
      attributed to the increase in revenues resulting from the pickup in tourism,
      as
      noted above.





29




General
      and administrative expenses increased $39,000 to $1.5 million for the six months
      ended June 30, 2004. This was primarily attributable to the increase in
      insurance expense partially offset by decrease in property taxes and
      professional fees.





The
      management fee due to the Managing Shareholder was $823,000 for each of the
      six
      months periods ended June 30, 2004 and 2003.





In
      the
      first six months of 2003, the Fund recorded a write-down of notes receivable
      of
      $3.4 million due to the decrease in estimated future cash flow of the Lahontan
      Project and the settlement of those notes with the obligor, the
      TCID.  At the time of the acquisition of US Hydro, the Fund valued the
      obligations under the notes receivable that were tied to the Lahontan Project
      at
      $7.4 million.  In the first six months of 2003, US Hydro renegotiated
      the TCID payment obligations which resulted in a settlement between the parties
      under which the TCID made a $4 million cash payment to US Hydro in full
      satisfaction of its obligations.





Loss
      from
      operations decreased $3 million from a loss of $3.4 million during the six
      months ended June 30, 2003 to $399,000 during the same period in 2004 was
      primarily attributable to the write-down of notes receivable of $3.4 million
      in
      2003 and by the increase in gross profit of $345,000.





Interest
      expense for the six months ended June 30, 2004 was $446,000 compared to $532,000
      in 2003, a decrease of $86,000.  The decrease was due to repayments of
      the debt assumed in the US Hydro acquisition partially offset by the interest
      recorded on the unpaid balance of the management fees payable to the Managing
      Shareholder.





In
      the
      first half of 2004, the Fund recorded an equity loss of $311,000 from RUK
      compared to an equity loss of $368,000 during the same period in
      2003.  The decrease in equity loss by $57,000 was a result of the
      higher gross profit in 2004 at RUK resulting from increased production,
      partially offset by the increase in interest expense at RUK due to higher
      outstanding borrowings associated with the RUK expansion construction
      program.





In
      the
      first six months of 2004, the Fund recorded a gain of $1.4 million on the
      distribution and sale of approximately 499,000 ZAP shares.





The
      Fund
      recorded other income of $174,000 for the six months ended June 30, 2004
      compared to other expense of $562,000 during the same period in
      2003.****For the six months ended June 30, 2004, other income
      includes a net gain on sale of the Lahontan notes receivable of
      $175,000.  In the first six months of 2003, the Egyptian operations
      sold power generation equipment for a loss of $562,000.





In
      the
      first half of 2004, the Fund recorded an income tax benefit of $674,000 compared
      to an income tax benefit of $1.3 million in the first half of 2003. The decrease
      in income tax benefit was primarily attributable to the recognition of temporary
      timing differences between the book and tax basis for the depreciation and
      amortization expense of US Hydro operations.





Minority
      interest in the earnings of subsidiaries increased by $973,000 from a minority
      interest in subsidiary losses of $708,000 in the first half of 2003 to a
      minority interest in subsidiary earnings of $265,000 during the same period
      in
      2004.  The increase was attributable to greater earnings at the Fund’s
      US Hydro and Egyptian subsidiaries.





Total
      assets at June 30, 2004 were $41.7 million, a decrease of $5.4 million from
      the
      December 31, 2003 balance of $47.1 million. This decrease was primarily due
      to a
      net decrease in notes receivable of $4 million due to the collection of the
      US
      Hydro note receivable. Total liabilities decreased $5.8 million from $25.1
      million at December 31, 2003 to $19.3 million at June 30, 2004, primarily due
      to
      decreased long-term debt of $4.7 million, primarily due to the repayment of
      the
      US Hydro term loan with the proceeds from the collection of the US Hydro note,
      as well as a decrease in deferred taxes payable of $2.2 million due to the
      utilization of deferred income taxes payable.




30





*Three
      months ended June 30, 2005 compared to the three months ended June 30,
      2004*





Total
      revenues increased $391,000, or 12.5%, to $3.5 million in the second quarter
      of
      2005 as compared to the second quarter of 2004.  Revenues from US
      Hydro operations increased $241,000 in the second quarter of 2005 compared
      to
      the second quarter of 2004 due to higher outputs experienced with increased
      precipitation. Revenues from Egyptian operations increased $150,000 primarily
      due to the increase in water volume sales due to greater tourism in the Fund’s
      market area.





Cost
      of
      revenues for the quarters ended June 30, 2005 and 2004 remained flat at $2.1
      million. Increased cost of revenues from Egyptian operations was offset by
      decreased expenses at US Hydro operations.





Gross
      profit increased $361,000 to $1.4 million in the second quarter of 2005 as
      compared to the second quarter of 2004. The increase in gross profit was
      primarily due to higher revenues of the US Hydro operations resulting in
      increased gross profit of $257,000. Gross profit from the Egyptian operations
      increased $104,000 in the second quarter of 2005 from the second quarter of
      2004
      primarily due to higher revenue, partially offset by increase in cost of
      revenues.





General
      and administrative expenses decreased $49,000 to $705,000 for the second quarter
      of 2005 primarily due to expenses relating to the Dubai project which was
      disposed in the first quarter of 2005, partially offset by an increase in
      professional fees.





In
      the
      second quarter of 2005, the Fund recorded equity income of $16,000 from RUK
      compared to an equity loss of $159,000 in the second quarter of 2004. The
      increase in equity income of $175,000 was primarily due to increased capacity
      and revenue in the 2005 quarter, partially offset by higher interest expense
      resulting from higher outstanding RUK borrowings.





The
      Fund
      recorded a loss on the distribution and sale of ZAP securities of $102,000
      in
      the second quarter of 2005 compared to gain of $1.4 million in the second
      quarter of 2004.  In the second quarter of 2005, the Fund sold 80,000
      ZAP shares.  In the second quarter of 2004, the Fund recorded a gain
      on distribution and sale of approximately 499,000 ZAP shares to the Fund’s
      shareholders.





In
      the
      second quarter of 2005, the Fund recorded an income tax expense of $34,000
      compared to an income tax benefit of $356,000 in the second quarter of 2004.
      The
      increase in income tax expense was primarily attributable to the increase in
      current year pre-tax income and recognition of temporary timing differences
      between the book and tax basis for the depreciation and amortization expense
      of
      the US Hydro operations.





*Three
      months ended June 30, 2004 compared to the three months ended June 30,
      2003*





Total
      revenues increased $135,000, or 4.5%, to $3.1 million in the second quarter
      of
      2004 compared to the second quarter of 2003.  Revenues from Egyptian
      operations increased $568,000, or 63.7% during the comparable periods due to
      the
      increase in sales attributable to higher tourism in the Fund’s market area. This
      increase was partially offset by US Hydro revenues decreasing $433,000, or
      20.7%, due to the lower output resulting from decreased
      precipitation.





Cost
      of
      revenues for the second quarter of 2004 was $2.1 million compared to $1.7
      million in the second quarter of 2003, an increase of $341,000, or
      19.5%.  This increase was primarily attributable to higher cost of
      revenues of $349,000 from Egyptian operations resulting from an increase in
      repairs and maintenance expenses.





Gross
      profit decreased $205,000, or 16.5%, from $1.2 million in the second quarter
      of
      2003 to $1 million during the same period in 2004.  Gross profit from
      US Hydro operations decreased $425,000 to $893,000 in the second quarter of
      2004
      compared to the second quarter of 2003 primarily due to decreased
      revenues.  Gross profit from Egyptian operations increased $220,000 to
      $143,000 primarily due to the increase in revenues resulting from increased
      tourism, as discussed above.





31




General
      and administrative expenses increased $199,000 to $754,000 in the second quarter
      of 2004 primarily due to the increase of $112,000 in advances relating to the
      Fund’s Dubai operations and also due to increased insurance expenses for US
      Hydro operations in 2004 as compared to 2003.





In
      the
      second quarter of 2004, the Fund recorded an equity loss of $159,000 from RUK,
      compared to an equity loss of $233,000 in the second quarter of 2003. The
      decrease in equity loss is primarily attributed to higher revenues earned by
      RUK
      partially offset by increased interest expense due to higher outstanding debt
      borrowings.





In
      the
      second quarter of 2004, the Fund recorded a gain of $1.4 million on the
      distribution and sale of approximately 499,000 ZAP shares to the Fund’s
      shareholders.





During
      the second quarter of 2004, the Fund recorded other expense of $7,000 compared
      to $562,000 in the second quarter of 2003.  In the 2004 quarter, the
      Fund recorded a loss of $10,000 on the sale of equipment by its Egyptian
      operations.  In the second quarter of 2003, the Egyptian operations
      sold the power generation equipment at one of its on-site hotels for a net
      loss
      of $562,000.





In
      the
      second quarter of 2004, the Fund recorded an income tax benefit of $356,000
      compared to an income tax benefit of $126,000 in the second quarter of 2003.
      The
      increase in income tax benefit was primarily attributable to the decrease in
      pre-tax income and the recognition of temporary timing differences between
      the
      book and tax basis for depreciation and amortization expense of the US Hydro
      operations.





Minority
      interest in the loss of subsidiaries increased $183,000, from $44,000 minority
      interest in loss in the second quarter of 2003 to $139,000 minority interest
      in
      earnings in the second quarter of 2004.  The increase in earnings of
      subsidiaries is primarily due to the decrease in other expenses and the increase
      in income tax benefit, which were partially offset by the increase in general
      and administrative expenses and a decrease of gross profit provided by US
      Hydro.





*Three
      months ended March 31, 2005 compared to the three months ended March 31,
      2004*





Total
      revenues increased $250,000, or 9.4%, to $2.9 million in the first quarter
      of
      2005 as compared to $2.7 in the first quarter of 2004. Revenues from US Hydro
      operations increased $99,000 to $1.7 million as a result of higher outputs
      due
      to increased precipitation; revenues from Egyptian operations increased $151,000
      primarily due to increased water volume sales due to greater tourism in the
      Fund’s market area.





Cost
      of
      revenues for the first quarter of 2005 was $1.9 million compared to $1.8 million
      in the first quarter of 2004, an increase of $153,000 or 8.5%. This increase
      was
      primarily attributable to higher cost of revenues of $217,000 from Egyptian
      operations, partially offset by a decrease in the cost of revenues for US Hydro
      operations of $64,000. The increase in Egyptian operations cost of revenues
      was
      primarily due to higher consumable expenses and the offsetting decrease in
      US
      Hydro cost of revenues were attributable to lower repair and maintenance
      expenses.





Gross
      profit increased 10% from $877,000 in the first quarter of 2004 to $975,000
      in
      the first quarter of 2005.  This increase of $98,000 was primarily due
      to the increase in the gross profit of US Hydro projects of $164,000, offset
      by
      the decrease in gross profit of Egyptian operations by $66,000.





General
      and administrative expenses increased $759,000 to $1.5 million for the first
      three months of 2005. The increase is primarily due to the termination agreement
      with a former consultant which resulted in a charge of $927,000, which
      represents the present value of the future discounted payments. This was
      partially offset by a decrease in advances relating to the Dubai operations
      of
      $110,000 in the first three months of 2005, when compared to the first three
      months of 2004.





Other
      income increased $390,000 from $181,000 in the first three months of 2004 to
      $571,000 during the same period in 2005.  In the first quarter of
      2005, other income includes recovery of amounts related to the Dubai project
      totaling $595,000.   In the first quarter of 2004, other income
      includes a net gain on the sale of US Hydro note of $175,000.





32




The
      Fund
      recorded income tax expense of $28,000 in the first quarter of 2005 compared
      to
      a tax benefit of $318,000 during the same period in 2004. The increase in income
      tax expense was primarily attributable to the recognition of temporary timing
      differences between the book and tax basis for the depreciation and amortization
      expense of the US Hydro operations.





The
      Fund
      recorded $30,000 of minority interest in the earnings of subsidiaries in the
      first quarter of 2005 as compared with the minority interest in the loss of
      subsidiaries of $126,000 in the first quarter of 2004.   This
      increase was primarily due to higher general and administrative expenses and
      lower gross profit provided by the Egypt projects as well as the increase in
      tax
      expense of US Hydro operations.





Total
      assets at March 31, 2005 were $39.5 million, an increase of $569,000 from the
      December 31, 2004 balance of $38.9 million. Current assets increased by $545,000
      due to increases in accounts receivables and balances due from affiliates.
      Total
      liabilities increased $1.3 million from $19.6 million at December 31, 2004
      to
      $20.9 million at March 31, 2005. This increase in total liabilities was
      primarily due to an increase of $913,000 in other liabilities, primarily
      resulting from recording a charge of $927,000 in the first quarter of 2004
      from
      a termination agreement with a former employee.




*Three
      months ended March 31, 2004 compared to the three months ended March 31,
      2003*





Total
      revenues decreased $36,000, or 1.3%, to $2.7 million in the first quarter of
      2004 when compared to the first quarter of 2003. The revenues from US Hydro
      operations decreased by $195,000 to $1.6 million in the first three months
      of
      2004 due to lower output resulting from a decrease in
      precipitation.  This was partially offset by the increase in Egyptian
      revenues by $159,000 to $1.1 million in the first three months of 2004 resulting
      from an increase in volume sales associated with greater tourism in the Fund’s
      market area compared to a drop-off in 2003 due to the war in Iraq.





Cost
      of
      revenues for the first quarter of 2004 was $1.8 million compared to $1.7 million
      in the first quarter of 2003. The increase of $103,000, or 6.1%, in cost of
      revenues was due to US Hydro and Egyptian operations experiencing higher
      operating costs, consisting mainly of repairs and maintenance
      expenses.  This was partially offset by the decrease in amortization
      expense in the first quarter of 2004 due to impairment of intangibles during
      the
      fourth quarter of 2003.





Gross
      profit decreased $139,000, or 13.7%, from $1 million in the first quarter of
      2003 to $877,000 in the first quarter of 2004.  US Hydro gross profit
      decreased $243,000 to $784,000 in the first quarter of 2004 due to lower
      revenues and increased repairs and maintenance expenses.  Gross profit
      from the Egyptian operations increased $104,000 to $93,000 in the first quarter
      of 2004 due to increased revenues resulting from the pickup in tourism compared
      to the same period in 2003.





General
      and administrative expenses decreased $160,000 to $735,000 for the first three
      months of 2004 primarily due to the decrease in provision for doubtful accounts,
      professional fees and property tax expenses.





The
      management fee due to the Managing Shareholder was $411,000 in each of the
      first
      quarters of 2004 and 2003.





In
      the
      first three months of 2003, the Fund recorded a write-down of notes receivable
      of $3.4 million due to a projected decrease in the estimated future cash flow
      of
      the related Lahontan Project.





In
      the
      first quarter of 2004, the Fund recorded an equity loss of $152,000 from RUK,
      compared to an equity loss of $135,000 in the first quarter of 2003. The
      decrease in equity loss was a result of the increase in gross profit, partially
      offset by the increase in interest expense at RUK due to higher outstanding
      borrowings associated with the RUK expansion construction program.





In
      the
      first quarter of 2004, the Fund recorded other income of $181,000 which includes
      a net gain of $175,000 on the sale of the note receivable held by US
      Hydro.





33




In
      the
      first quarter of 2004, the Fund recorded income tax benefit of $318,000 compared
      to an income tax benefit of $1.2 million in the first quarter of 2003. The
      decrease in income tax benefit was primarily attributable to the recognition
      of
      temporary timing differences between the book and tax basis for the depreciation
      and amortization expense of US Hydro operations.





Minority
      interest in the earnings of subsidiaries increased $790,000 from a minority
      interest in subsidiary losses of $664,000 in the first quarter of 2003 to a
      minority interest in subsidiary earnings of $126,000 in the first quarter of
      2004.  The increase was primarily due to the increase in earnings of
      US Hydro and of the Fund’s Egyptian operations.




Total
      assets at March 31, 2004 were $41.6 million, a decrease of $5.5 million from
      the
      December 31, 2003 balance of $47.1 million. This decrease was primarily due
      to a
      net decrease in notes receivable of $3.9 million primarily due to the collection
      of the $4 million US Hydro note receivable. Total liabilities decreased $4.9
      million from $25.1 million at December 31, 2003 to $20.2 million at March 31,
      2004, primarily due to decreased long-term debt of $4.2 million, primarily
      due
      to the repayment of the US Hydro term loan with the proceeds from the collection
      of the US Hydro note, as well as a decrease in deferred taxes payable of $1.8
      million due to the utilization of deferred income taxes payable.




**Liquidity
      and Capital Resources**





*Year
      ended December 31, 2005 compared to the year ended December 31,
      2004*





At
      December 31, 2005, the Fund had cash
      and cash equivalents of $1.9 million, an increase of $1.1 million from December
      31, 2004. The cash flows for the year 2005 were $5.2 million provided by
      operating activities, $49,000 provided by investing activities, $4.1 million
      used in financing activities and a $44,000 positive effect of foreign exchange
      on cash and cash equivalents.





In
      2005,
      the Fund’s operating activities generated cash of $5.2 million compared to $2.4
      million in 2004, an increase of $2.8 million, primarily due to the increase
      in
      profitability of the Egypt and US Hydro operations.





In
      2005,
      investing activities provided $49,000, compared to $3.8 million in 2004. The
      decrease was primarily due to increased capital expenditures of $1.7 million,
      a
      decrease in collection from notes receivable of $330,000, and a decrease in
      proceeds from the sale of ZAP securities of $598,000.  In addition,
      the decrease in 2005 cash provided by investing activities was also due to
      the
      $4 million in proceeds from the sale of US Hydro notes in 2004, partially offset
      by a decrease of $2.8 million in the Fund’s investment in ZAP securities when
      comparing 2005 to 2004.





In
      2005, the Fund used $4.1 million of
      cash in financing activities, primarily as a result of $1.1 million used for
      bank loan repayments and $3 million of cash distributions to shareholders.
      In
      2004, the Fund used $6.2 million of cash in financing activities, $4.9 million
      of which was used for bank loan repayments and $1.3 million used for
      distributions to shareholders.





*Year
      ended December 31, 2004 compared to the year ended December 31,
      2003*





At
      December 31, 2004, the Fund had cash and cash equivalents of $769,000, a
      decrease of $32,000 from December 31, 2003. The cash flows for the year 2004
      were $2.4 million provided by operating activities, $3.9 million provided by
      investing activities, $6.2 million used in financing activities and a $5,000
      positive effect of foreign exchange on cash and cash equivalents.





In
      2004,
      the Fund’s operating activities generated cash of $2.4 million compared to $2.1
      million in 2003, an increase of $289,000 primarily due to increase in
      revenue.





In
      2004,
      investing activities provided $3.8 million compared to $1.3 million in 2003,
      an
      increase of $2.5 million. The increase was primarily due to proceeds of $4
      million from the sale of the US Hydro note receivable and $1.4 million in
      proceeds from the sale of ZAP securities partially offset by the additional
      investment of $2.8 million in ZAP securities.





34





In
      2004, the Fund used $6.2 million of cash in financing activities, a result
      of
      $4.9 million used for bank loan repayments (including $4 million of proceeds
      received from sale of the US Hydro note) and $1.3 million used for distributions
      to shareholders. In 2003, the Fund used $3.3 million of cash in financing
      activities, primarily the result of $2 million used to repay bank loans and
      $1.3
      million used for distributions to shareholders.





*Nine
      months ended September 30, 2005 compared to the nine months ended September
      30,
      2004*





At
      September 30, 2005, the Fund had cash and cash equivalents of $2.2 million,
      an
      increase of $1.4 million from December 31, 2004. The cash flows for the first
      nine months of 2005 were $4.8 million provided by operating activities, $9,000
      used in investing activities, $3.4 million used in financing activities and
      a
      $44,000 positive effect of foreign exchange on cash and cash
      equivalents.





Cash
      provided by operating activities for the nine months ended September 30, 2005
      was $4.8 million as compared to $1.6 million for the nine months ended September
      30, 2004. The increase in cash flow from operating activities compared to 2004
      was primarily due to the increase in other liabilities resulting from the
      termination agreement of a consultant in Egypt. In addition, the increase in
      cash flow was also due to the decrease in short-term receivables from affiliates
      and in other current assets resulting from the decrease in prepayments made
      by
      the Egyptian operations for equipment.





Cash
      used
      in investing activities was $9,000 during the first nine months of 2005 as
      compared to $4.3 million provided by these activities in the first nine months
      of 2004. The decrease was due to $4 million of proceeds from the sale of the
      US
      Hydro note receivable, which occurred in the first nine months of 2004.
      Additionally, in the first nine months of 2005 as compared to the same period
      in
      2004, there was a $1.5 million increase in capital expenditures and a $226,000
      decrease in collections of note receivable, partially offset by a $1.1 million
      of investment in ZAP securities in the first nine months of 2004 and an increase
      of $353,000 in distributions from RUK in the first nine months of
      2005.





Cash
      used in financing activities for the first nine months of 2005 was $3.4 million
      compared to $5.6 million for the first nine months of 2004.  In 2005,
      cash used in financing activities includes $997,000 in cash distributions to
      shareholders, $1.7 million in US Hydro cash distributions to its minority
      shareholder and $757,000 in repayments of bank loans.  In 2004,
      financing activities includes $997,000 in cash distributions to shareholders
      and
      $4.6 million in repayment of bank loans.





*Nine
      months ended September 30, 2004 compared to the nine months ended September
      30,
      2003*





At
      September 30, 2004, the Fund had cash and cash equivalents of $1.1 million,
      an
      increase of $307,000 from December 31, 2003. The cash flows for the first nine
      months of 2004 were $1.6 million provided by operating activities, $4.3 million
      provided by investing activities, $5.6 million used in financing activities
      and
      $10,000 negative effect of foreign exchange on cash and cash
      equivalents.





Cash
      provided by operating activities for the nine months ended September 30, 2004
      was $1.6 million as compared to $1.6 million for the nine months ended September
      30, 2003. The increase in cash flow was primarily due to the increase in
      revenue.





Cash
      provided by investing activities increased to $4.3 million during the first
      nine
      months of 2004 as compared to $745,000 in the first nine months of 2003. The
      increase of $3.6 million in cash flow from investing activities was due to
      the
      $4 million received from the sale of the US Hydro note receivable, increase
      in
      collection from notes receivable of $121,000, an increase in proceeds from
      sale
      of ZAP securities of $539,000 and an increase of $77,000 in distribution from
      RUK.   This increase was partially offset by an additional
      investment in ZAP securities of $1.1 million.





Cash
      used
      in financing activities for the first nine months of 2004 was $5.6 million
      compared to $2.1 million for the first nine months of 2003. The decrease in
      cash
      flow from financing activities was due to the increase of $3.2 million
      repayments of principal on US Hydro and Egyptian debt and an increase of
      $332,000 in cash distributions to shareholders.





35




*Six
      months ended June 30, 2005 compared to the six months ended June 30,
      2004*





At
      June
      30, 2005, the Fund had cash and cash equivalents of $1.2 million, an increase
      of
      $424,000 from December 31, 2004. The increase was the result of $3.7 million
      provided by operating activities, $408,000 used in investing activities, $2.9
      million used in financing activities and the $33,000 positive effect of foreign
      exchange on cash and cash equivalents





Cash
      provided by operating activities for the six months ended June 30, 2005 was
      $3.7
      million as compared to $2.1 million for the six months ended June 30, 2004.
      The
      increase in cash flow compared to 2004 was primarily due to the increase in
      revenue and also due to increase in other liabilities resulting from the
      termination agreement of a consultant in Egypt.





Cash
      used
      in investing activities was $408,000 during the first six months of 2005 as
      compared to cash provided of $3.2 million in the first six months of 2004.
      The
      decrease was primarily due to a $1.4 million increase in capital expenditures
      and a $133,000 decrease in collections on notes receivable from 2005 to 2004
      and
      the $4 million proceeds from the sale of the US Hydro note receivable in
      2004.  This was partially offset by $1.1 million of investment in ZAP
      securities in the first six months of 2004, $424,000 of proceeds from the sale
      of investment in ZAP securities in 2005, and a $365,000 increase in
      distributions from RUK in the first six months of 2005 as compared to the
      same period in 2004.





Cash
      used
      in financing activities for the first half of 2005 was $2.9 million compared
      to
      $5 million for the first half of 2004.  In 2005, cash used in
      financing activities includes $665,000 in cash distributions to shareholders,
      $1.7 million in US Hydro cash distribution to minority shareholders and $547,000
      in repayments of bank loans.  In 2004, financing activities includes
      $665,000 in cash distributions to shareholders and $4.4 million in repayment
      of
      bank loans.





*Six
      months ended June 30, 2004 compared to the six months ended June 30,
      2003*





At
      June
      30, 2004, the Fund had cash and cash equivalents of $1.1 million, an increase
      of
      $261,000 from December 31, 2003. The increase was the result of $2.1 million
      provided by the operating activities, $3.2 million provided by the investing
      activities, $5 million used in the financing activities and $10,000 negative
      effect of foreign exchange on cash and cash equivalents.





Cash
      provided by operating activities for the six months ended June 30, 2004 was
      $2.1
      million as compared to $921,000 for the six months ended June 30,
      2003.  The increase in cash provided by operating activities was
      primarily due to the increase in short term advances from affiliates and accrued
      expenses partially offset by the increase in accounts payable and decrease
      in
      accounts receivable.





Cash
      provided by investing activities was $3.2 million during the first six months
      of
      2004 as compared to a use of $100,000 in the first six months of 2003. The
      increase in operating cash inflows was primarily due to the following 2004
      activity: $4 million from the sale of the US Hydro note receivable held by
      U.S.
      Hydro, $353,000 distribution from RUK and $193,000 collections on note
      receivable. This was partially offset by an investment in ZAP securities of
      $1.1
      million in 2004 and an increase in capital expenditure of $151,000.





Cash
      used
      in financing activities for the first half of 2004 increased to $5 million
      from
      $908,000 in the first half of 2003. The decrease in 2004 cash flow from
      financing activities was primarily due to the repayment of principal on the
      US
      Hydro debt and distribution to shareholders.





*Three
      months ended March 31, 2005 compared to the three months ended March 31,
      2004*





At
      March
      31, 2005, the Fund had cash and cash equivalents of $608,000, a decrease of
      $161,000 from December 31, 2004. The decrease was primarily the result of
      $840,000 provided by operating activities, $469,000 used in the investing
      activities, $568,000 used in financing activities and the $36,000 positive
      effect of foreign exchange on cash and cash equivalents.





36




Cash
      provided by operating activities for the three months ended March 31, 2005
      was
      $840,000 compared to $1.1 million for the three months ended March 31,
      2004.  The decrease in cash flow in 2005 compared to 2004 was
      primarily due to a decrease in short-term payable to affiliates and accrued
      expenses partially offset by increase in other liabilities resulting from the
      termination agreement of a consultant in Egypt.





Cash
      used
      in investing activities for the three months ended March 31, 2005 was $469,000
      compared to cash provided of $4 million for the three months ended March 31,
      2004.  In the first three months of 2005, cash used in investing
      activities included $1 million of deposits made on purchase of equipment by
      the
      Egyptian operations, partially offset by $359,000 in distributions from RUK
      and
      $264,000 in proceeds from the sale of investment in ZAP
      securities.  In the first three months of 2004, investing activities
      primarily includes $4 million in proceeds from the sale of the US Hydro note
      receivable.





Cash
      used
      in financing activities for the first quarter of 2005 was $568,000 compared
      to
      $4.4 million in the first quarter of 2004. In the first quarter of 2005, cash
      used in financing activities includes $332,000 in cash distributions to
      shareholders and $236,000 of repayments under bank loans.  In the
      first quarter of 2004, financing activities includes $332,000 in cash
      distributions to shareholders and $4.1 million of bank loan
      repayments.





*Three
      months ended March 31, 2004 compared to three months ended March 31,
      2003*





At
      March
      31, 2004, the Fund had cash and cash equivalents of $1.4 million, an increase
      of
      $614,000 from December 31, 2003. The increase was the result of $1.1 million
      provided by the operating activities, $4 million provided by investing
      activities, $4.4 million used in the financing activities and the $6,000
      negative effect of foreign exchange on cash and cash equivalents.





Cash
      provided by operating activities for the three months ended March 31, 2004
      was
      $1.1 million as compared to $380,000 for the three months ended March 31, 2003.
      The increase of $686,000 in cash flow from operating activities was primarily
      the result of the increase in short term advances to affiliates.





Cash
      provided by investing activities was $4 million during the first three months
      of
      2004 as compared to a use of $38,000 in the first three months of 2003. This
      increase of $4 million was primarily due to the sale of the US Hydro note
      receivable and collection of other notes receivable.





Cash
      used
      in financing activities for the first quarter of 2004 was $4.4 million compared
      to $557,000 in the first quarter of 2003. The increase of $3.9 million in the
      first quarter of 2004 as compared to the first quarter of 2003 was primarily
      due
      to the increase in repayment of principal on the US Hydro debt of $4 million
      and
      cash distributions to shareholders of $332,000.





**Off-Balance
      Sheet Arrangements**





The
      Fund has not entered into any
      off-balance sheet arrangements that either have, or are reasonable likely to
      have, a material adverse current or future effect on the Fund’s financial
      condition, revenues or expenses, result of operations, liquidity, capital
      expenditure or capital resources that are material to the Fund.





37




**Contractual
      Obligations and Commitments**





The
      following table provides a summary
      of the Fund’s share of contractual obligations as of December 31, 2005 (in
      thousands).







**2006**
              
              
              **2007**
              
              
              **2008**
              
              
              **2009**
              
              
              **2010**
              
              
              **Thereafter**
              
              
              **Total**Long-term
                  debtSinai   (1)
              
              $
              217
              
              
              $
              285
              
              
              $
              372
              
              
              $
              465
              
              
              $
              624
              
              
              $
              296
              
              
              $
              2,259REFI   (2)
              
              
              541
              
              
              
              135
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              676US
                  Hydro  (3)
              
              
              432
              
              
              
              432
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              864Minimum
                  lease payment  (4)
              
              
              695
              
              
              
              700
              
              
              
              710
              
              
              
              721
              
              
              
              732
              
              
              
              4,764
              
              
              
              8,322Consulting
                  agreement settlement  (5)
              
              
              75
              
              
              
              83
              
              
              
              92
              
              
              
              101
              
              
              
              112
              
              
              
              917
              
              
              
              1,380




1)
            The
                Sinai loan bears interest at 11.0% per annum. The provision of the
                loan
                restricts Sinai from paying dividends to its shareholders or obtaining
                credit from other banks.  As the loan has been in default since
                2003, in April 2005, Sinai entered into a new agreement in order
                to 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.





2)
            During
                the third quarter of 2002, REFI executed a term loan agreement with
                its
                principal bank. The bank provided a loan of 12.5 million Egyptian
                pounds
                (approximately $2 million), maturing March 31, 2007. The loan is
                repayable
                in quarterly installments of 781,000 Egyptian pounds (approximately
                $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, 2005, 2004
                and 2003).





3)
            Of
                the original eight US Hydro projects, six were financed by a single
                term
                loan. The borrower under the term loan is an intermediate, wholly-owned
                subsidiary of US Hydro whose only assets are the projects that were
                financed.  The Fund has a choice of variable or fixed interest
                rates on the term loan. Variable rate is LIBOR (3.83% 2.38% and 1.16%
                at
                December 31, 2005, 2004 and 2003, respectively) plus 1.75% 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 $1.0 million, 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 2.75%. The variable rates of 5.58%,
                4.13% and 2.91% were the effective interest rates at December 31,
                2005,
                2004 and 2003, respectively. This credit facility is collateralized
                by the
                assets of the projects financed including, where appropriate, the
                interest
                in projects held in the form of notes
                receivable.





As
      additional compensation to the lender, 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.  The Fund is also required to make an additional
      annual payment of 50% of excess cash flow, as defined.  No additional
      payments were required for the years ended December 31, 2005, 2004 and
      2003.





4)
            The
                facility at Union Falls has leased the site at its facility under
                a
                non-cancelable long-term lease which terminates in 2024. Rent expense
                at
                this site for the years ended December 31, 2005, 2004 and 2003 was
                $185,000, $170,000 and $160,000, respectively.  The facility of
                US Hydro at the Box Canyon dam in Siskiyou County, California is
                owned
                subject to a ground lease which the Fund treats for financial reporting
                purposes as an operating lease.  The lease terminates on
                December 31, 2010, at which time the Fund is obligated to transfer
                the
                facility at the site to the Siskiyou County Flood Control and Water
                Conservation District.  The lease payment for Box Canyon was
                $500,000 for each of the years ended December 31, 2005, 2004 and
                2003.





5)
            In
                February 2003, a complaint was filed against NEH by a corporation
                claiming
                breach of a consulting contract.  In November 2003, the parties
                reached an agreement, whereby, NEH paid the corporation a one-time
                payment
                of $281,000, 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
                over a
                period of ten years.  In addition, in April 2005, NEH agreed to
                a settlement with another individual, whereby NEH will make quarterly
                payments of $30,000 for so long as the Egypt projects remain
                operational.  In the event that the Egypt projects are sold, an
                amount equal to the present value of the subsequent ten-years of
                payments
                would be made in settlement of the remaining obligation.  NEH
                recorded a liability of $927,000 during the first quarter of 2005
                to
                reflect this obligation.





38




**Recent
      Accounting Pronouncements**




*SFAS
      143 and FIN 47*





In
      June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      143, *Accounting for Asset Retirement Obligations*, on the accounting for
      obligations associated with the retirement of long-lived assets. SFAS No. 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 No. 143 is effective for fiscal years
      beginning after June 15, 2002. Furthermore, in March 2005, the FASB issued
      FASB Interpretation No. 47 (“FIN 47”), *Accounting for Conditional Asset
      Retirement Obligations, an interpretation of FASB Statement No. 143*,
      which clarifies the term “conditional asset retirement obligation” as used in
      SFAS No. 143. Specifically, FIN 47 provides that an asset retirement
      obligation is conditional when the timing and/or method of settling the
      obligation is conditioned on a future event. Accordingly, an entity is required
      to recognize a liability for the fair value of a conditional asset retirement
      obligation if the fair value of the liability can be reasonably estimated.
      Uncertainty about the timing and/or method of settlement of a conditional asset
      retirement obligation should be factored into the measurement of the liability
      when sufficient information exists. This interpretation also clarifies when
      an
      entity would have sufficient information to reasonably estimate the fair value
      of an asset retirement obligation. FIN 47 is effective for fiscal years ending
      after December 15, 2005. The Fund adopted SFAS No. 143 effective January 1,
      2003, with no material impact on its 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.
      SFAS
      No. 145 is effective for interim periods beginning after May 15, 2002. The
      Fund
      adopted SFAS No. 145 effective January 1, 2003, with no material impact on
      its
      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. SFAS No. 146 is effective for fiscal years ending
      after December 31, 2002. The Fund adopted SFAS No. 146 effective January 1,
      2003, with no material impact on its consolidated financial
      statements.





*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.





39




*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 its 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 No. 149 effective July 1, 2003, with no material impact on its 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.
      SFAS
      No. 150 is effective for interim periods beginning after June 15, 2003. The
      Fund
      adopted SFAS No. 150 effective July 1, 2003, with no material impact on its
      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 No.
      153
      effective June 15, 2005, with no material impact on its consolidated financial
      statements.





*SFAS
      154*





In
      May
      2005, the FASB issued SFAS No. 154, *Accounting Changes and Error
      Corrections*.  SFAS No. 154 replaces APB Opinion No. 20,
*Accounting Changes*, and SFAS No. 3, *Reporting Accounting Changes in
      Interim Financial Statements*. This statement changes the requirements
      for the
      accounting for, and reporting of, a change in accounting principle and applies
      to all voluntary changes in accounting principle, as well as changes pursuant
      to
      accounting pronouncements that do not include transition
      rules.   Under SFAS No. 154, changes in accounting principle must
      be applied retrospectively to prior periods’ financial statements, or the
      earliest practicable date,as the required method for reporting a change
      in accounting principle.  The Fund adopted SFAS No. 154 effective
      December 15, 2005, with no material impact on its consolidated financial
      statements.





40




**ITEM
      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**




**Overview
      Regarding Market Risks**




The
      Fund
      is exposed to certain market risks associated with interest rates, foreign
      exchange rates and commodity prices. The Fund does not utilize financial
      instruments and other contracts to hedge against such fluctuations and does
      not
      enter into derivative instruments for trading or speculative
      purposes.  The Fund does not anticipate any changes to its market risk
      exposure other than as described in connection with the RUK investment below
      and
      does not anticipate any changes in the management of these risks.




**Interest
      Rate Risks**




The
      Fund
      is exposed to risk resulting from changes in interest rates as a result of
      its
      projects use of fixed-rate and variable-rate debt.  Such debt takes
      the form of term loans of intermediate length maturities and is consistent
      with
      the long-life nature of the assets of the Fund.  The Fund’s
      investments in financial instruments consist only of short-term investments
      of
      working capital that are either bank deposits or have characteristics similar
      to
      those of bank deposits.  The Fund does not expect any material loss
      from such investments and therefore believes its potential interest rate
      exposure is not material.  Trade accounts receivable and accounts
      payable are carried at their fair market value.




**Foreign
      Exchange Rate Risk**




The
      Fund
      is exposed to foreign currency risk and other foreign operating risks that
      arise
      from investments in foreign subsidiaries and affiliates. A key component of
      this
      risk is that these foreign subsidiaries and affiliates utilize currencies other
      than the US dollar which is the consolidated reporting currency of the
      Fund.  As a general matter, the foreign operations of the Fund match
      the currency of their assets and revenues to the currency of their obligations
      and expenses in order to minimize currency risk within such foreign
      operations.




Although
      the Fund invests in long-lived projects and businesses, it is a finite-life
      investment vehicle and liquidation of investments, including foreign
      investments, is part of the strategy of the Fund.  The ultimate effect
      of currency fluctuations on the Fund will, therefore, be heavily weighted toward
      the applicable exchange rate(s) at the time of liquidation and repatriation
      of
      the proceeds of any sale.  The Fund does not hedge the currency risk
      associated with holding its investments in foreign entities.




**Commodity
      Price Risk**




The
      Fund
      is exposed to the impact of market fluctuations in the price of electricity
      as a
      result of its investment in US Hydro. Although the majority of the electricity
      sales of the Fund are made pursuant to long-term contracts with fixed prices,
      a
      portion of electricity sales are made at market prices prevailing at the time
      of
      generation.  This subjects the operating results of the Fund to the
      volatility of electricity prices in competitive markets and the Fund does not
      hedge its electricity price risk.




41




**Description
      of Long-Tem Debt Obligations of the Fund**




The
      following schedule summarizes the interest rate risk of the Fund’s long-term
      debt obligations at December 31, 2005 by identifying the schedule over which
      payments required by these obligations are expected to be made (converted to
      thousands of US dollars). The fair value of the obligations, calculated using
      current rates for loans with similar maturities, does not differ materially
      from
      the amounts presented below.




2006
                
                
                2007
                
                
                2008
                
                
                2009
                
                
                2010
                
                
                Thereafter
                
                
                TotalLong-term
                    DebtFixed
                    Rate Principal Payment Obligation(Egyptian
                    Pound Denominated)1
                
                $
                217
                
                
                $
                285
                
                
                $
                372
                
                
                $
                465
                
                
                $
                624
                
                
                $
                296
                
                
                $
                2,259Average
                    Interest Rate
                
                
                7.57
                %
                
                
                7.57
                %
                
                
                7.57
                %
                
                
                7.57
                %
                
                
                7.57
                %
                
                
                7.57
                %
                
                
                7.57
                %Variable
                    Rate Principal Payment Obligation(Egyptian
                    Pound Denominated)2
                
                $
                541
                
                
                $
                135
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                676Average
                    Interest Rate
                
                
                n/a
                
                
                
                n/a
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                n/aVariable
                    Rate Principal Payment Obligation(USD
                    Denominated)3
                
                $
                432
                
                
                $
                432
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                864Average
                    Interest Rate
                
                
                n/a
                
                
                
                n/a
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                n/a




1
            Amounts
                are attributable to the borrowings of the Fund’s Egyptian operation, and
                not the Fund itself.  The borrowings above are stated gross and are
                subject to minority interests.The
                Fund’s interest, after taking into account minority interests, is
                approximately 45.2%.





2
            Amounts
                are attributable to the borrowings of the Fund’s Egyptian operation, and
                not the Fund itself.  The borrowings above are stated gross and are
                subject to minority interests.  The Fund’s interest, after taking
                into account minority interests, is 68.1%.  The future interest
                payments on this loan will be determined by interest rates in the
                period
                in which the payment obligation accrues as determined by a formula
                set out
                in the loan agreement.





3
            Amounts
                are attributable to the borrowings of the Fund’s US Hydro operation, and
                not the Fund itself.  The US Hydro borrowings above are stated gross
                and are subject to minority interests.  The Fund’s interest in US
                Hydro, after taking into account minority interests, is 70.8%.  The
                future interest payments on this loan will be determined by interest
                rates
                in the period in which the payment obligation accrues as determined
                by a
                formula set out in the loan
                agreement.





**UK
      Market Risk Disclosures**




The
      investment of the Fund in RUK is accounted for by the Fund using the equity
      method of accounting so instruments of RUK affecting the market risk of the
      Fund
      are not consolidated into the financial statements of the Fund.




Prior
      to
      the Sale in 2007, RUK had a UK pound sterling-denominated term loan facility
      a
      portion of which bore interest at fixed rates with the remaining portion bearing
      interest at variable rates set from time-to-time based on a premium over widely
      recognized indices.  RUK was also exposed to commodity price risk with
      respect to the output of the RO projects, which do not sell their output under
      long-term agreements with the NFPA.  The output of these,
      non-contracted projects qualify under the UK government’s RO incentive program
      and since April 1, 2003, the output of these projects was sold under a series
      of
      one-year offtake arrangements at fixed prices.  The contracts were
      specific to the plants whose output had been contracted for, the contracts
      did
      not provide for cash or other net settlement and there were no penalties for
      failure to deliver the contracted output.




This
      market risk for the RUK items was eliminated at the time of the Sale and did
      not
      materially impact the operating results of the Fund.




42




**ITEM
      8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**




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




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




As
      reported on a Form 8-K filed with the SEC on June 14, 2006, the Managing
      Shareholder of the Fund dismissed Perelson Weiner, LLP (“Perelson Weiner”) as
      the Fund’s independent registered public accountants effective June 8, 2006.
      Perelson Weiner was engaged as the independent accountants of the Fund as of
      January 14, 2004 after the Fund dismissed PricewaterhouseCoopers LLP (“PWC”) as
      its independent accountants, as reported on a Form 8-K filed by the Fund with
      the SEC on January 20, 2004.




For
      the
      period January 14, 2004 through June 8, 2006, there were no
      (1) disagreements with Perelson Weiner on any matter of accounting
      principles or practices, financial statement disclosure, or auditing scope or
      procedures, which disagreements if not resolved to their satisfaction would
      have
      caused them to make reference to the subject matter of the disagreements in
      their report on the Fund’s financial statements, or (2) “reportable events,” as
      defined in Item 304(a)(1)(v) of Regulation S-K, other than as
      follows:




Perelson
      Weiner identified the following material deficiencies in disclosure controls
      and
      procedures, which are reportable events: (i) a lack of automation and
      integration in the Fund’s accounting and financial reporting software, which
      caused the Fund to be unable to timely comply with its financial reporting
      responsibilities, (ii) a lack of sufficient personnel with relevant experience
      to maintain and operate the Fund’s accounting and financial reporting software
      and to develop and administer additional disclosure controls and procedures
      to
      enable the Fund to comply on a timely basis with its financial reporting
      obligations, (iii) disclosure controls and procedures that were insufficient
      to
      enable the Fund to meet its financial reporting and disclosure obligations
      in an
      accurate and timely manner, and (iv) deficiencies in the Fund’s disclosure
      controls and procedures for its foreign operations, including insufficient
      procedures relating to the preparation of financial statements for the Fund’s
      U.K. operations and insufficient administration and reporting of contractual
      relationships in connection with the Fund’s Egyptian operations, resulting in
      the Fund’s inability to timely receive audited financial statements relating to
      its U.K. and Egyptian operations.




For
      the
      year ended December 31, 2002 and for the period through January 14, 2004, there
      were no (1) disagreements with PWC on any matter of accounting principles
      or practices, financial statement disclosure, or auditing scope or procedures,
      which disagreements if not resolved to their satisfaction would have caused
      them
      to make reference to the subject matter of the disagreements in their report
      on
      the Fund’s financial statements, or (2) “reportable events,” as defined in Item
      304(a)(1)(v) of Regulation S-K.




As
      reported on a Form 8-K filed on July 13, 2006, the Managing Shareholder of
      the
      Fund appointed Grant Thornton LLP as the Fund’s independent registered public
      accounting firm effective July 12, 2006.




43




**ITEM
      9A.  CONTROLS AND PROCEDURES**




In
      accordance with Rule 13a-15(b) of the Exchange Act, the Fund’s management, with
      the participation of its Chief Executive Officer and Chief Financial Officer,
      evaluates the effectiveness of the Fund’s disclosure controls and procedures. A
      system of disclosure controls and procedures is designed to ensure that
      information required to be disclosed by a registrant in reports filed with
      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 a registrant is accumulated and communicated to senior
      management so as to allow timely decisions regarding required disclosure. A
      review of these controls and procedures was done by the Fund as of December
      31,
      2003 and revealed material weaknesses in the Fund’s disclosure controls and
      procedures. Additional reviews were conducted as of the end of each of the
      periods ended March 31, 2004, June 30, 2004, September 30, 2004, December 31,
      2004, March 31, 2005, June 30, 2005, September 30, 2005 and December 31, 2005.
      Those reviews indicated the continued existence of the following material
      weaknesses:




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




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




As
      a
      result of these weaknesses, the Fund has not timely met its reporting
      obligations under the Exchange Act. Additionally, upon further examination
      of
      the Fund’s previously issued financial statements, various accounting errors
      were identified. As reported under Item 4.02 of the Form 8-K/A filed by the
      Fund
      on May 22, 2007, management of the Fund concluded that the Fund’s previously
      issued financial statements for periods ending subsequent to January 1, 2003
      should no longer be relied upon and should be restated to correct for identified
      errors detected by management.




The
      primary cause of the above weaknesses was a lack of sufficiently qualified
      personnel. Since the December 31, 2004 review, the Fund has implemented the
      following to address the above weaknesses:




·
            Increased
                the number of degreed accountants. Additional staff expansion is
                underway.




·
            Engaged
                a national accounting firm to review procedures and controls over
                financial reporting. The firm made a report to the Managing Shareholder
                in
                May 2006, which has implemented some of the firm’s recommendations, and is
                in the process of evaluating the remaining
                recommendations.




·
            In
                August 2006, engaged a national accounting firm to supply accounting
                personnel to assist while personnel hiring is underway. The work
                performed
                by the firm is under the direct supervision of the Fund’s Chief Financial
                Officer and Controller.




·
            In
                May 2007, the Fund appointed a new Chief Financial Officer who is
                a
                Certified Public Accountant with approximately 29 years of professional
                accounting experience, including prior experiences as a financial
                officer
                of publicly traded companies.




The
      Fund
      believes that the completion of the expansion of the accounting and financial
      reporting staff and implementation of recommended procedures will mitigate
      the
      above weaknesses. However, due to the Fund’s delinquencies in meeting its filing
      deadlines under the Exchange Act, the Fund expects these deficiencies to
      continue to be material weaknesses at least until such time as the Fund is
      no
      longer delinquent in its Exchange Act filings.




44




In
      its
      previously filed Forms 10-K and Forms 10-Q, the Fund also reported material
      weaknesses regarding system automation and identification of material
      transactions. The Fund also reported the changes in internal control that had
      been implemented to address those weaknesses. As a result of the implemented
      controls, the Fund no longer considers those items to be material
      weaknesses.




Fund
      management, under the supervision of its Chief Executive Officer, has evaluated
      the effectiveness of the Fund’s disclosure controls and procedures as of the end
      of each of the periods covered by this report pursuant to Rule 13a-15(b) under
      the Exchange Act and concluded that, as of the end of each of the periods
      covered by this report, because of the material weaknesses noted above, the
      Fund’s disclosure controls and procedures did not provide reasonable assurance
      of effectiveness.




**ITEM
      9B.  OTHER INFORMATION; UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS; DEFAULTS UPON SENIOR SECURITIES**




None.




**PART
      III**




**ITEM
      10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
      REGISTRANT**




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




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




**Name,
                Age and Position with Registrant**
            **Officer
                Since**Randall
                D. Holmes, 60President
                and Chief Executive Officer
            2004Robert
                E. Swanson, 60Chairman
            1997Jeffrey
                H. Strasberg, 49Executive
                Vice President and Chief Financial Officer (1)
            2007Daniel
                V. Gulino, 46Senior
                Vice President and General Counsel
            2000Douglas
                R. Wilson, 47Executive
                Vice President and Chief Financial Officer (1)
            2005


(1)
      Mr.
      Strasberg replaced Mr. Wilson as Executive Vice President and Chief Financial
      Officer on May 2, 2007.




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




**Randall
      D. Holmes** has served as President and Chief Executive Officer of the
      Fund since January 2006 and served as Chief Operating Officer of the Fund from
      January 2004 until January 2006.  Mr. Holmes has also served as the
      President and Chief Operating Officer of the Managing Shareholder, and
      affiliated Power Trusts and LLCs since January 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.  Immediately
      prior to being appointed Chief Operating Officer, Mr. Holmes was counsel to
      Downs Rachlin Martin PLLC (“DRM”).  DRM is one of the primary outside
      counsel to the Fund, the Managing Shareholder and its affiliates.  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.




45




**Robert
      E. Swanson** has served as Chairman of the Fund, the Managing Shareholder
      and affiliated Power Trusts and LLCs since their inception. From their inception
      until January 2006, Mr. Swanson also served as their Chief Executive
      Officer.  Mr. Swanson is the controlling member of the Managing
      Shareholder, as well as Ridgewood Energy and Ridgewood Capital, affiliates
      of
      the Fund. Mr. Swanson has been President and registered principal of Ridgewood
      Securities since its formation in 1982, has served as the Chairman of the Board
      of Ridgewood Capital since its organization in 1998 and has served as President
      and Chief Executive Officer of Ridgewood Energy since its inception in 1982.
      Mr.
      Swanson is a member of the New York State and New Jersey State Bars, the
      Association of the Bar of the City of New York and the New York State Bar
      Association. He is a graduate of Amherst College and Fordham University Law
      School.




**Jeffrey
      H. Strasberg** has served as Executive Vice President of the Fund, the
      Managing Shareholder, and affiliated Power Trusts and LLCs since May 2007.
      Mr.
      Strasberg also serves as Senior Vice President and Chief Financial Officer
      of
      Ridgewood Capital and affiliated LLCs and Ridgewood Securities and has done
      so
      since April 2005. Mr. Strasberg joined Ridgewood Capital in 1998 where his
      initial responsibilities were to serve as interim Chief Financial Officer of
      various portfolio companies in which Ridgewood Capital Funds had interests.
      Mr.
      Strasberg is a Certified Public Accountant and a graduate of the University
      of
      Florida.




**Daniel
      V. Gulino** has served as Senior Vice President and General Counsel of
      the Fund, the Managing Shareholder and affiliated Power Trusts and LLCs since
      2000. Mr. Gulino also serves as Senior Vice President and General Counsel of
      Ridgewood Energy, Ridgewood Capital, Ridgewood Securities and affiliated Trusts
      and LLCs and has done so since 2000. Mr. Gulino is a member of the New Jersey
      State and Pennsylvania State Bars. He is a graduate of Fairleigh Dickinson
      University and Rutgers School of Law.




**Douglas
      R. Wilson** served as Executive Vice President and Chief Financial
      Officer of the Fund, the Managing Shareholder and affiliated Power Trusts and
      LLCs from April 2005 until May 2007.  Mr. Wilson continues to serve
      the Managing Shareholder as Executive Vice President and Chief Development
      Officer.  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 trusts and entities
      managed by Ridgewood Capital LLC. From May of 2002, until its sale in 2007,
      Mr.
      Wilson has served as a Director, CEO and Finance Director for CLPE Holdings.
      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.







**Board
      of Directors and Board Committees**




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




**Managing
      Shareholder**




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




46




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




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




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




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Fund’s
      executive officers and directors, and persons who own more than 10% of a
      registered class of the Fund’s equity securities, to file reports of ownership
      and changes in ownership with the SEC. Based on a review of the copies of
      reports furnished or otherwise available to the Fund, the Fund believes that
      the filing requirements were not met during the years ended December 31,
      2005, 2004 and 2003; however, all such required reports have since been
      filed with the SEC.




**Code
      of Ethics**




In
      March
      2004, the Managing Shareholder, for itself and for the Fund and its affiliates
      adopted a Code of Ethics applicable to the principal executive officer,
      principal financial officer, principal accounting officer or controller (or
      any
      persons performing similar functions), of each such entity.  A copy of
      the Code of Ethics was filed as Exhibit 14 to the Annual Report on Form 10-K
      filed by the Fund with the SEC on March 1, 2006 and is incorporated herein
      by
      reference.




**ITEM
      11.  EXECUTIVE COMPENSATION**




Except
        as
        noted below, the executive officers of the Fund do not receive compensation
        directly from the Fund. They provide managerial services to the Fund in
        accordance with the terms of the Fund’s LLC operating agreement with the
        Managing Shareholder.  The Managing Shareholder, or affiliated
        management companies, determines and pays the compensation of these
        officers.  Each of the executive officers of the Fund also serves as
        an executive officer of the Managing Shareholder and other funds managed
        by the
        Managing Shareholder and its affiliates.




47




Prior
        to
        becoming executive officers of the Fund, Randall D. Holmes and Douglas R.
        Wilson
        became vested participants in a CLP management incentive program. Additionally,
        Mr. Wilson continued serving as an officer with CLP after becoming an executive
        officer of the Fund.  Bonus amounts presented below represent
        compensation received by Messrs. Holmes and Wilson from CLP during years
        in
        which they were also executive officers of the Fund.  Bonus amounts
        represent formula-based payments under the CLP management incentive program.
        Mr.
        Wilson’s salary was paid pursuant to the terms of his Service Agreement with
        CLP, as discussed below. The compensation described in this table does not
        include benefits generally available to other CLP salaried
        employees.
  Annual
                  CompensationName
                  and Principal Position
              
              Year
              
              Salary
                ($)
              
              Bonus
                (S)Randall
                  D. Holmes
              
              2005
              
              -
              
              26,399President
                  and Chief Executive Officer (1)
              
              2004
              
              -
              
              23,341Douglas
                  R. Wilson
              
              2005
              
              163,472
              
              116,749Former
                  Executive Vice President and Chief Financial Officer
                  (2)
  (1)
              Mr.
                  Holmes became an executive officer of the Fund in January
                  2004.
  (2)
              Mr.
                  Wilson served as an executive officer of the Fund from April 2005
                  to May
                  2007.
  Upon
        the
        sale of CLP in February 2007 (as discussed under Item 1. “Business”) each
        of Mr. Wilson’s employment with CLP and Messrs. Holmes’ and Wilson’s
        participation in the CLP management plan, was terminated.
  The
        Managing Shareholder is entitled to receive management fees from the Fund
        and
        may determine to use a portion of the proceeds from the management fee to
        pay
        compensation to executive officers of the Fund. See Item 13. “Certain
        Relationships and Related Transactions” for more information regarding Managing
        Shareholder compensation and payments to affiliated entities.
  **Employment
        Contracts, Termination of Employment and Change of Control Arrangements**
  In
        October 2004, Douglas R. Wilson, who at such time was not serving as an
        executive officer of the Fund or of the Managing Shareholder but who
        subsequently served as the Chief Financial Officer of each of the Fund and
        the
        Managing Shareholder, entered into a Service Agreement with CLP pursuant
        to
        which Mr. Wilson served as Chief Executive Officer and Finance Director of
        CLP
        Envirogas Limited (“Envirogas”), a subsidiary of CLP.  The Service
        Agreement provided for a term that was originally to expire on December 31,
        2005, but was later extended until termination of the agreement in
        February 2007, as discussed below.  The Services Agreement
        provided for Mr. Wilson to receive a base salary of £250,000, except that upon
        his appointment as an executive officer of the Fund, Mr. Wilson’s annual salary
        payable by CLP was reduced to £75,000 per annum.   Mr. Wilson
        entered into a Compromise Agreement with CLP, dated February 22, 2007, pursuant
        to which the Service Agreement and Mr. Wilson’s employment with Envirogas were
        terminated by mutual agreement as of such date.


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




The
      following table sets forth information with respect to the beneficial ownership
      of the Fund’s Investor Shares as of December 31, 2005 (no person owns more than
      5%) by:




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


·
            all
                of the executive officers of the Fund as a
                group.





Beneficial
      ownership is determined in
      accordance with SEC rules and includes voting or investment power with respect
      to the securities. Except as indicated by footnote, and subject to applicable
      community property laws, the persons named in the table below have sole voting
      and investment power with respect to all Investor Shares shown as beneficially
      owned by them. Percentage of beneficial ownership is based on 658.1067 Investor
      Shares outstanding at December 31, 2005. Other than the below, no officer and
      director owns any shares of the Fund.





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





*           Represents
      less than one percent.





48


(1)
            Does
                not include a Management Share in the Fund representing the beneficial
                interests and management rights of the Managing Shareholder in its
                capacity as the Managing Shareholder.  The management share
                owned by the Managing Shareholder is the only issued and outstanding
                management share of the Fund.  The management rights of the
                Managing Shareholder are described in further detail in Item 1.
                “Business”. 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
      Fund
      operates pursuant to the terms of a management agreement (“Management
      Agreement”).  Under the terms of the Management Agreement, the
      Managing Shareholder provides certain management, administrative and advisory
      services, and office space to the Fund.  In return, the Fund is
      obligated to pay the Managing Shareholder an annual management fee equal to
      2.5%
      of the total contributed capital of the Fund, or approximately $1,645,000
      annually, as compensation for such services. The management fee is to be paid
      in
      monthly installments and, to the extent that the Fund does not pay the
      management fee on a timely basis, the Fund accrues interest at an annual rate
      of
      10% on the unpaid balance.





The
      Managing Shareholder waived its right to receive its management fee for 2005.
      For 2004 and 2003, the Managing Shareholder waived 50% of the management fee
      due
      in such years (or approximately $823,000 in each year). The Fund recorded these
      waived management fees as deemed capital contributions in the periods in which
      the fees were accrued.  The shareholders of the Fund other than the
      Managing Shareholder were allocated 99% of each contribution and the Managing
      Shareholder was allocated 1% so that the amount of the contribution allocated
      offset the amount of the expense initially accrued. For the years ended December
      31, 2004 and 2003, the Fund made management fee payments to the Managing
      Shareholder of approximately $317,000 and $150,000,
      respectively.  Unpaid management fees that accrued during the years
      ended December 31, 2004, 2003 and 2002 of approximately $506,000, $673,000
      and
      $446,000, respectively, were forgiven by the Managing Shareholder in the fourth
      quarter of 2005 and were recorded as capital contributions at that time in
      the
      manner described above.





For
      the
      years ended December 31, 2005, 2004 and 2003, the Fund accrued interest expense
      of approximately $262,000, $187,000 and $131,000, respectively, on accrued
      but
      unpaid management fees.  Such interest has been either waived or
      forgiven by the Managing Shareholder in the same manner and timing described
      above with respect to the management fees giving rise to the interest
      accrual.





Under
      the
      Management Agreement with the Managing Shareholder, Ridgewood Power Management
      (“RPM”), an entity related to the Managing Shareholder through common ownership,
      provides management, purchasing, engineering, planning and administrative
      services to the projects operated by the Fund.  RPM charges the
      projects at its cost for these services and for the allocable amount of certain
      overhead items.  Allocations of costs are on the basis of identifiable
      direct costs or in proportion to amounts invested in projects managed by
      RPM.  During the years ended December 31, 2005, 2004 and 2003, RPM
      charged the US Hydro Projects $581,189, $489,110 and $432,070, respectively,
      for
      overhead items allocated in proportion to the amount invested in projects
      managed. In addition, RPM charged the US Hydro Projects $3,234,104, $2,968,435
      and $2,962,140, respectively, for all of the direct operating and non-operating
      expenses incurred during such periods.





Under
      the
      Declaration of Trust, the Managing Shareholder is entitled to receive,
      concurrently with the shareholders of the Fund other than the Managing
      Shareholder, 1% of all distributions from operations made by the Fund in a
      year
      until the shareholders have received distributions in that year equal to 12%
      of
      their equity contribution.  Thereafter, the Managing Shareholder is
      entitled to receive 25% of the distributions for the remainder of the
      year.  The Managing Shareholder is entitled to receive 1% of the
      proceeds from dispositions of Fund property until the shareholders other than
      the Managing Shareholder, have received cumulative distributions equal to their
      original investment (“Payout”).  After Payout, the Managing
      Shareholder is entitled to receive 25% of all remaining distributions of the
      Fund. Distributions to the Managing Shareholder were $13,297 for each of the
      three years ended December 31, 2005, 2004 and 2003. The Fund has not yet reached
      Payout.





49




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





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





On
      June
      26, 2003, the Managing Shareholder, entered into a Revolving Credit and Security
      Agreement with Wachovia Bank, National Association.  The agreement, as
      amended, allows the Managing Shareholder to obtain loans and letters of credit
      of up to $6,000,000 for the benefit of 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 to provide guarantees.





Prior
      to
      becoming an Executive Officer of the Fund, Randall Holmes became an owning
      member of SHG Dubai Holdings, LLC, a 40% owner of Ridgewood Water Management
      FZCO (“RWM”), an affiliate of the Fund. During the years 2003 and 2004, REFI
      advanced $577,914 and $1,217,635 to RWM, which was used for development efforts.
      During the year ended December 31, 2005, RWM returned $594,094 to REFI. Mr.
      Holmes has not received any compensation from RWM.





**ITEM
      14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES**




The
      following table presents fees and
      services rendered by Grant Thornton LLP, the Fund’s principal accountant, for
      the years ended December 31, 2005, 2004 and 2003 (in thousands).




2005
            
            
            2004
            
            
            2003Audit
                Fees*
            
            $
            664
            
            
            $
            664
            
            
            $
            888Audit-Related
                Fees
            
            
            -
            
            
            
            -
            
            
            
            -Tax
                Fees
            
            
            -
            
            
            
            -
            
            
            
            -All
                Other Fees
            
            
            -
            
            
            
            -
            
            
            
            -Total
            
            $
            664
            
            
            $
            664
            
            
            $
            888


*
      These
      fees are being borne by the Managing Shareholder.




The
      above
      table excludes fees for services rendered by Perelson Weiner LLP, the Fund’s
      original principal accountant for the Fund’s 2004 and 2003 audits. Total fees
      for services rendered by Perelson Weiner LLP for the Fund’s original 2004 audit
      and for 2004 tax services totaled $85,000 and $51,000, respectively. Total
      Perelson Weiner fees for services for the Fund’s 2003 audit and for 2003 tax
      services totaled $33,000 and $51,000, respectively.




**Audit
      Committee Pre-Approval Policy**




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




50




**PART
      IV**




**ITEM
      15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**




(a)           **Financial
      Statements**




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





(b)           **Exhibits**





Exhibits
      required by Section 601 of Regulation S-K.





Exhibit
                No.
            Description3
            (i)(A)
            
            Certificate
                of Trust of the Registrant (incorporated by reference to the Registrant’s
                Registration Statement on Form 10 filed with the SEC on April 30,
                1999).3
            (i)(B)
            
            Amendment
                No. 1 to Certificate of Trust (incorporated by reference to the
                Registrant’s Registration Statement on Form 10 filed with the SEC on April
                30, 1999).3
            (i)(C)
            *
            Certificate
                of Amendment to the Certificate of Trust of the Registrant dated
                December
                18, 2003.3
            (i)(D)
            
            Declaration
                of Trust of the Registrant (incorporated by reference to the Registrant’s
                Registration Statement on Form 10 filed with the SEC on April 30,
                1999).3
            (i)(E)
            
            Amendment
                No. 1 to the Declaration of Trust (incorporated by reference to the
                Registrant’s definitive proxy statement filed with the SEC on November 5,
                2001).3
            (i)(F)
            *
            Amendment
                of the Declaration of Trust of the Registrant effective January 1,
                2005.10.1
            
            
            Stock
                and Warrant Purchase Agreement for ZAP Power Systems, Inc., dated
                March
                29, 1999 (incorporated by reference to the Registrant’s Registration
                Statement on Form 10 filed with the SEC on April 30,
                1999).10.2
            
            
            Warrant
                for Purchase of Common Stock of ZAP Power Systems, Inc., dated March
                29,
                1999 (incorporated by reference to the Registrant’s Registration Statement
                on Form 10 filed with the SEC on April 30, 1999).10.3
            
            
            Investors’
                Rights Agreement with ZAP Power Systems, Inc., dated March 29, 1999
                (incorporated by reference to the Registrant’s Registration Statement on
                Form 10 filed with the SEC on April 30, 1999).10.4
            
            
            Milestone
                letter agreement with ZAP Power Systems, Inc., dated March 29, 1999
                (incorporated by reference to the Registrant’s Registration Statement on
                Form 10 filed with the SEC on April 30,
                1999).





51




Exhibit
              No.
            Description10.5
            
            
            Letter
                agreement re board representation with ZAP Power Systems, Inc., dated
                March 29, 1999 (incorporated by reference to the Registrant’s Registration
                Statement on Form 10 filed with the SEC on April 30,
                1999).10.6
            
            #
            Management
                Agreement between the Fund and Managing Shareholders, dated February
                9,
                1998 (incorporated by reference to the Registrant’s Registration Statement
                on Form 10 filed with the SEC on April 30, 1999).10.7
            
            #
            Key
                Employees’ Incentive Plan (incorporated by reference to the Registrant’s
                Registration Statement on Form 10 filed with the SEC on April 30,
                1999).10.8
            
            
            Operating
                Agreement of Ridgewood Near East Holding LLC., dated September 30,
                1999
                (incorporated by reference to the Annual Report on Form 10-K filed
                by the
                Registrant with the SEC on March 1, 2006).10.9
            
            
            Form
                of contracts and agreements between affiliates of CLPE Holdings Ltd.
                and
                each of (i) Ridgewood Renewable PowerBank I, LLC, (ii) Ridgewood
                Renewable
                PowerBank II, LLC, (iii) Ridgewood Renewable PowerBank III, LLC and
                (iv)
                Ridgewood Renewable PowerBank IV, LLC (incorporated by reference
                to the
                Annual Report on Form 10-K filed by the Registrant with the SEC on
                March
                1, 2006).10.10
            
            *#
            The
                CLPE Holdings Management Incentive Plan dated August 6,
                2003.10.11
            
            
            Agreement
                made on January 23, 2007 by and among Ridgewood UK LLC, Arbutus Energy
                Limited, Ridgewood ROC 2003 LLC, Ridgewood ROC II 2003 LLC, Ridgewood
                ROC
                III 2003 LLC, Ridgewood ROC IV 2004 LLC, and MEIF LG Energy Limited
                (incorporated by reference to Exhibit 10.1 to the Form 8-K filed
                by the
                Registrant with the SEC on January 29, 2007).10.12
            
            
            Sellers
                Agreement entered into as of January 23, 2007 by and among Ridgewood
                UK,
                LLC, and Ridgewood ROC 2003 LLC, Ridgewood ROC II 2003 LLC, Ridgewood
                ROC
                III 2003 LLC, Ridgewood ROC IV 2004 LLC, Arbutus Energy Limited,
                Ridgewood
                Renewable Powerbank LLC, Ridgewood Renewable Powerbank II LLC, Ridgewood
                Renewable Powerbank III LLC, Ridgewood Renewable Powerbank IV LLC,
                Ridgewood Electric Power Trust V, The Ridgewood Power Growth Fund,
                Ridgewood Renewable Power LLC and Ridgewood Management Corporation
                (incorporated by reference to Exhibit 10.2 to the Form 8-K filed
                by the
                Registrant with the SEC on January 29, 2007).10.13
            
            *#
            Service
                Agreement dated October 1, 2004 between Douglas R. Wilson and CLPE
                Holdings Limited.10.14
            
            *#
            Deed
                of Waiver dated January 22, 2007 between Douglas R. Wilson and CLPE
                Holdings Limited relating to a bonus entitlement under The CLPE Holdings
                Management Incentive Plan.10.15
            
            *#
            Deed
                of Waiver dated January 22, 2007 between Randall D. Holmes and CLPE
                Holdings Limited relating to a bonus entitlement under The CLPE Holdings
                Management Incentive Plan.10.16
            
            *#
            Compromise
                Agreement dated February 22, 2007 between Douglas R. Wilson and CLPE
                Holdings Limited.14
            
            
            Code
                of Ethics, adopted on March 1, 2004 (incorporated by reference to
                the
                Annual Report on Form 10-K filed by the Registrant with the SEC on
                March
                1, 2006).21
            
            *
            Subsidiaries
                of the Registrant.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 Jeffrey H. Strasberg, Chief Financial Officer of the Registrant,
                pursuant to Securities Exchange Act Rule
                13a-14(a).





52


Exhibit
              No.
            
            
            Description32
            
            *
            Certifications
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                The Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief
                Executive Officer of the Registrant, and Jeffrey H. Strasberg, Chief
                Financial Officer of the Registrant.99.1
            
            *
            Financial
                statements of Ridgewood UK, LLC.


_____________________


*
            Filed
                herewith.








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








(c)           **Financial
      Statement Schedules**





See
      Financial Statements and accompanying notes included in this
      report.




53




**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**Date: 
                August 17, 2007
            By:
            /s/ 
              Randall D.
              HolmesRandall
              D. HolmesChief
              Executive Officer(Principal
              Executive Officer)




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






**Signature**
            **Capacity**
            **Date**




/s/
                Randall D.
                Holmes
            
            Chief
                Executive
                Officer
            
            August
                  17, 2007Randall
                D. Holmes
            
            (Principal
                Executive Officer)/s/
Jeffrey
                H. Strasberg
            
            Executive
                Vice
                President and Chief Financial Officer
            
            August
                  17, 2007Jeffrey
                  H. Strasberg
            
            (Principal
                Financial and Accounting Officer)**RIDGEWOOD
              RENEWABLE POWER LLC**(Managing
              Shareholder)/s/
                Randall D.
                Holmes
            
            Chief
                  Executive Officer of Managing Shareholder
            
            August
                  17, 2007Randall
                D.
                Holmes







54




**THE
        RIDGEWOOD POWER GROWTH FUND**
 
 **INDEX
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 
  **Page**Report
                    of Independent Registered Public Accounting Firm
                F-2Consolidated
                    Balance Sheets at December 31, 2005, 2004 and 2003
                F-3Consolidated
                    Statements of Operations and Comprehensive Loss for the three
                    years ended
                    December 31, 2005
                F-4Consolidated
                    Statements of Changes in Shareholders’ Equity (Deficit)for
                    the three years ended December 31, 2005
                F-5Consolidated
                    Statements of Cash Flows for the three years ended December 31,
                    2005
                F-6Consolidated
                    Balance Sheets (unaudited) at September 30, 2005, June 30,
                    2005,March
                    31, 2005
                F-7Consolidated
                    Balance Sheets (unaudited) at September 30, 2004, June 30,
                    2004,March
                    31, 2004
                F-8Consolidated
                    Balance Sheets (unaudited) at September 30, 2003, June 30, 2003,
                    March 31,
                    2003
                F-9Consolidated
                    Statements of Operations and Comprehensive (Loss)
                    Income (unaudited) for the three and nine months
                    endedSeptember
                    30, 2005, 2004 and 2003
                F-10Consolidated
                    Statements of Operations and Comprehensive (Loss)
                    Income (unaudited) for the three and six months endedJune
                    30, 2005, 2004 and 2003
                F-11Consolidated
                    Statements of Operations and Comprehensive Loss (unaudited) for
                    the three months endedMarch
                    31, 2005, 2004 and 2003
                F-12Consolidated
                    Statements of Changes in Shareholders’ Equity (Deficit) (unaudited) for
                    the threemonths,
                    six months and nine months ended March 31,  June
                    30,  September 30, for2003,
                    2004 and 2005
                F-13Consolidated
                    Statements of Cash Flows (unaudited) for the nine months ended
                    September
                    30, 2005,2004
                    and 2003
                F-14Consolidated
                    Statements of Cash Flows (unaudited) for the six months ended
                    June 30,
                    2005,2004
                    and 2003
                F-15Consolidated
                    Statements of Cash Flows (unaudited) for the three months ended
                    March 31,
                    2005,2004
                    and 2003
                F-16Notes
                    to Consolidated Financial Statements
                F-17
  F-1
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 
 The
        Managing Shareholder and Shareholders
 **The
        Ridgewood Power Growth Fund**
 
 
 We
        have
        audited the accompanying consolidated balance sheets of The Ridgewood Power
        Growth Fund (a Delaware business trust) as of December 31, 2005, 2004 and
        2003,
        and the related consolidated statements of operations, changes in shareholders’
equity, and cash flows for each of the three years in the period ended December
        31, 2005.**These consolidated financial statements are the
        responsibility of the Fund's management.**Our responsibility is to
        express an opinion on these consolidated financial statements based on our
        audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).**Those standards
        require that we plan and perform the audit to obtain reasonable assurance
        about
        whether the financial statements are free of material
        misstatement.**The Fund is not required to have, nor were we
        engaged to perform an audit of its internal control over financial
        reporting.**Our audit included consideration of internal control
        over financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Fund’s internal control over financial
        reporting.**Accordingly, we express no such
        opinion.**An audit also includes examining, on a test basis,
        evidence supporting the amounts and disclosures in the financial statements,
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement
        presentation.**We believe that our audits provide a reasonable
        basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of The Ridgewood Power Growth
        Fund as of December 31, 2005, 2004 and 2003, and the results of its operations
        and its cash flows for each of the three years in the period ended December
        31,
        2005, in conformity with accounting principles generally accepted in the
        United
        States of America.
 
 The
        accompanying consolidated financial statements as of and for the years ended
        December 31, 2004 and 2003 have been restated as discussed in Note 2 to the
        consolidated financial statements.
 
 
 
 
 /s/
        GRANT
        THORNTON LLP  Edison,
        New Jersey
 August
        17, 2007
 
 
  F-2
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Balance SheetsDecember
                    31,*(in
                    thousands, except share amounts)*
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)ASSETSCurrent
                    assetsCash
                    and cash equivalents
                
                $
                1,906
                
                
                $
                769
                
                
                $
                801Accounts
                    receivable, net of allowance
                
                
                1,367
                
                
                
                1,040
                
                
                
                1,065Notes
                    receivable - current portion
                
                
                140
                
                
                
                131
                
                
                
                4,269Due
                    from affiliates
                
                
                733
                
                
                
                1,567
                
                
                
                1,914Deferred
                    income taxes - current portion
                
                
                429
                
                
                
                443
                
                
                
                1,380Inventory
                
                
                640
                
                
                
                563
                
                
                
                482Prepaid
                    expenses and other current assets
                
                
                227
                
                
                
                559
                
                
                
                182Total
                    current assets
                
                
                5,442
                
                
                
                5,072
                
                
                
                10,093Notes
                    receivable - noncurrent portion
                
                
                1,500
                
                
                
                1,636
                
                
                
                -Investments
                
                
                192
                
                
                
                4,240
                
                
                
                4,225Property,
                    plant and equipment, net
                
                
                20,812
                
                
                
                20,171
                
                
                
                22,121Goodwill
                
                
                227
                
                
                
                227
                
                
                
                227Intangibles,
                    net
                
                
                5,897
                
                
                
                7,484
                
                
                
                10,442Other
                    assets
                
                
                5
                
                
                
                59
                
                
                
                -Total
                    assets
                
                $
                34,075
                
                
                $
                38,889
                
                
                $
                47,108LIABILITIES
                    AND SHAREHOLDERS' EQUITYCurrent
                    liabilties:Accounts
                    payable
                
                $
                1,311
                
                
                $
                544
                
                
                $
                551Accrued
                    expenses
                
                
                230
                
                
                
                633
                
                
                
                484Long-term
                    debt - current portion
                
                
                1,190
                
                
                
                3,234
                
                
                
                7,130Due
                    to affiliates
                
                
                881
                
                
                
                3,000
                
                
                
                1,892Total
                    current liabilities
                
                
                3,612
                
                
                
                7,411
                
                
                
                10,057Long-term
                    debt - noncurrent portion
                
                
                2,609
                
                
                
                1,502
                
                
                
                2,476Other
                    liabilities
                
                
                1,735
                
                
                
                802
                
                
                
                649Deferred
                    income taxes, net
                
                
                1,515
                
                
                
                1,696
                
                
                
                3,583Minority
                    interest
                
                
                6,855
                
                
                
                8,204
                
                
                
                8,327Total
                    liabilities
                
                
                16,326
                
                
                
                19,615
                
                
                
                25,092Commitments
                    and contingenciesShareholders’
                    equity:Shareholders’
                    equity (658.1067 Investor Shares issued and
                  outstanding)
                
                
                18,111
                
                
                
                19,619
                
                
                
                22,356Managing
                    Shareholder's accumulated deficit (1 management
                  share
                    issued and outstanding)
                
                
                (362
                )
                
                
                (345
                )
                
                
                (340
                )Total
                    shareholders’ equity
                
                
                17,749
                
                
                
                19,274
                
                
                
                22,016Total
                    liabilities and shareholders’ equity
                
                $
                34,075
                
                
                $
                38,889
                
                
                $
                47,108
 
 *The
        accompanying notes are an integral part of these financial
        statements.*
  F-3
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Operations and Comprehensive LossYears
                    ended December 31,*(in
                    thousands)*
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Revenues
                
                $
                12,281
                
                
                $
                10,585
                
                
                $
                10,245Cost
                    of revenues
                
                
                8,721
                
                
                
                8,174
                
                
                
                7,439Gross
                    profit
                
                
                3,560
                
                
                
                2,411
                
                
                
                2,806Operating
                    expensesGeneral
                    and administrative expenses
                
                
                3,484
                
                
                
                3,403
                
                
                
                4,335Management
                    fee to the Managing Shareholder
                
                
                1,645
                
                
                
                1,645
                
                
                
                1,645Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411Impairment
                    of Goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433Impairment
                    of property, plant and equipment
                
                
                79
                
                
                
                75
                
                
                
                801Impairment
                    of intangibles
                
                
                23
                
                
                
                22
                
                
                
                1,918Total
                    operating expenses
                
                
                5,231
                
                
                
                5,145
                
                
                
                18,543Loss
                    from operations
                
                
                (1,671
                )
                
                
                (2,734
                )
                
                
                (15,737
                )Other
                    income (expense):Interest
                    income
                
                
                96
                
                
                
                20
                
                
                
                58Interest
                    expense
                
                
                (995
                )
                
                
                (876
                )
                
                
                (992
                )Equity
                    in loss from RUK
                
                
                (833
                )
                
                
                (699
                )
                
                
                (610
                )(Loss)
                    gain on distribution and sale of investment in ZAP
                    securities
                
                
                (956
                )
                
                
                2,111
                
                
                
                76Gain
                    on termination of electric power sales contract
                
                
                -
                
                
                
                380
                
                
                
                -Other
                    income (expense), net
                
                
                573
                
                
                
                125
                
                
                
                (407
                )Total
                    other income (expense), net
                
                
                (2,115
                )
                
                
                1,061
                
                
                
                (1,875
                )Loss
                    before income tax expense (benefit) and minority interest
                
                
                (3,786
                )
                
                
                (1,673
                )
                
                
                (17,612
                )Income
                    tax expense (benefit)
                
                
                138
                
                
                
                (773
                )
                
                
                (2,509
                )Loss
                    before minority interest
                
                
                (3,924
                )
                
                
                (900
                )
                
                
                (15,103
                )Minority
                    interest in the (earnings) loss of subsidiaries
                
                
                (35
                )
                
                
                154
                
                
                
                4,077Net
                    loss
                
                
                (3,959
                )
                
                
                (746
                )
                
                
                (11,026
                )Foreign
                    currency translation adjustment
                
                
                483
                
                
                
                292
                
                
                
                (3,475
                )Unrealized
                    (loss) gain on investment in ZAP securities
                
                
                (251
                )
                
                
                111
                
                
                
                45Comprehensive
                    loss
                
                $
                (3,727
                )
                
                $
                (343
                )
                
                $
                (14,456
                )Managing
                    Shareholder - Net  loss
                
                $
                (40
                )
                
                $
                (7
                )
                
                $
                (110
                )Shareholders
                    - Net loss
                
                $
                (3,919
                )
                
                $
                (739
                )
                
                $
                (10,916
                )Net
                    loss per Investor Share
                
                $
                (6
                )
                
                $
                (1
                )
                
                $
                (17
                )
  *The
          accompanying notes are an integral part of these financial
          statements.*
  F-4
  The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Changes in Shareholders' Equity (Deficit)Years
                    ended December 31, 2005, 2004 and 2003*(in
                    thousands)*
                
                Share
                
                
                Retained
                
                
                Accumulated
                    Other
                
                
                Total
                    Shareholders'Capital
                
                
                Earnings
                    (Deficit)
                
                
                Comprehensive
                    Loss
                
                
                Equity**Shareholders:**Shareholders'
                    balance January 1, 2003, restated
                
                $
                56,818
                
                
                $
                (14,838
                )
                
                $
                (4,942
                )
                
                $
                37,038Net
                    loss
                
                
                -
                
                
                
                (10,916
                )
                
                
                -
                
                
                
                (10,916
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (3,439
                )
                
                
                (3,439
                )Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                45
                
                
                
                45Cash
                    distributions
                
                
                -
                
                
                
                (1,316
                )
                
                
                -
                
                
                
                (1,316
                )Capital
                    contribution
                
                
                944
                
                
                
                -
                
                
                
                -
                
                
                
                944Shareholders'
                    balance December 31, 2003, restated
                
                
                57,762
                
                
                
                (27,070
                )
                
                
                (8,336
                )
                
                
                22,356Net
                    loss
                
                
                -
                
                
                
                (739
                )
                
                
                -
                
                
                
                (739
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                288
                
                
                
                288Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                110
                
                
                
                110Distribution
                    of ZAP shares
                
                
                -
                
                
                
                (2,079
                )
                
                
                -
                
                
                
                (2,079
                )Cash
                    distributions
                
                
                -
                
                
                
                (1,316
                )
                
                
                -
                
                
                
                (1,316
                )Capital
                    contribution
                
                
                999
                
                
                
                -
                
                
                
                -
                
                
                
                999Shareholders'
                    balance December 31, 2004, restated
                
                
                58,761
                
                
                
                (31,204
                )
                
                
                (7,938
                )
                
                
                19,619Net
                    loss
                
                
                -
                
                
                
                (3,919
                )
                
                
                -
                
                
                
                (3,919
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                479
                
                
                
                479Unrealized
                    loss on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                (248
                )
                
                
                (248
                )Cash
                    distributions
                
                
                -
                
                
                
                (1,316
                )
                
                
                -
                
                
                
                (1,316
                )Capital
                    contribution
                
                
                3,496
                
                
                
                -
                
                
                
                -
                
                
                
                3,496Shareholders'
                    balance December 31, 2005
                
                $
                62,257
                
                
                $
                (36,439
                )
                
                $
                (7,707
                )
                
                $
                18,111Total
                    Managing*(in
                    thousands)*
                
                Share
                
                
                Retained
                
                
                Accumulated
                    Other
                
                
                Shareholder'sCapital
                
                
                Earnings
                    (Deficit)
                
                
                Comprehensive
                    Loss
                
                
                Equity**Managing
                    Shareholder:**Managing
                    Shareholder's balance January 1, 2003, restated
                
                $
                9
                
                
                $
                (150
                )
                
                $
                (50
                )
                
                $
                (191
                )Net
                    loss
                
                
                -
                
                
                
                (110
                )
                
                
                -
                
                
                
                (110
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (36
                )
                
                
                (36
                )Cash
                    distributions
                
                
                -
                
                
                
                (13
                )
                
                
                -
                
                
                
                (13
                )Capital
                    contributions
                
                
                10
                
                
                
                -
                
                
                
                -
                
                
                
                10Managing
                    Shareholder's balance December 31, 2003, restated
                
                
                19
                
                
                
                (273
                )
                
                
                (86
                )
                
                
                (340
                )Net
                    loss
                
                
                -
                
                
                
                (7
                )
                
                
                -
                
                
                
                (7
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                4
                
                
                
                4Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                1
                
                
                
                1Cash
                    distributions
                
                
                -
                
                
                
                (13
                )
                
                
                -
                
                
                
                (13
                )Capital
                    contributions
                
                
                10
                
                
                
                -
                
                
                
                -
                
                
                
                10Managing
                    Shareholder's balance December 31, 2004, restated
                
                
                29
                
                
                
                (293
                )
                
                
                (81
                )
                
                
                (345
                )Net
                    loss
                
                
                -
                
                
                
                (40
                )
                
                
                -
                
                
                
                (40
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                4
                
                
                
                4Unrealized
                    loss on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                (3
                )
                
                
                (3
                )Cash
                    distributions
                
                
                -
                
                
                
                (13
                )
                
                
                -
                
                
                
                (13
                )Capital
                    contributions
                
                
                35
                
                
                
                -
                
                
                
                -
                
                
                
                35Managing
                    Shareholder's balance December 31, 2005
                
                $
                64
                
                
                $
                (346
                )
                
                $
                (80
                )
                
                $
                (362
                )
  *The
        accompanying notes are an integral part of these financial
        statements.*
 F-5
  The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Cash FlowsYears
                    ended December 31,*(in
                    thousands)*
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Cash
                    flows from operating activities:Net
                    loss
                
                $
                (3,959
                )
                
                $
                (746
                )
                
                $
                (11,026
                )Adjustments
                    to reconcile net loss to net cash provided byoperating
                    activities:Depreciation
                    and amortization
                
                
                3,770
                
                
                
                3,731
                
                
                
                3,880Provision
                    for bad debts
                
                
                1,599
                
                
                
                156
                
                
                
                457Management
                    fees forgiveness
                
                
                1,907
                
                
                
                1,009
                
                
                
                954Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411Impairment
                    of Goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433Impairment
                    of property, plant and equipment, net
                
                
                79
                
                
                
                75
                
                
                
                801Impairment
                    of intangibles
                
                
                23
                
                
                
                22
                
                
                
                1,918Equity
                    interest in loss of RUK
                
                
                833
                
                
                
                699
                
                
                
                610Gain
                    on distribution and sale of investment in ZAP securities
                
                
                956
                
                
                
                (2,111
                )
                
                
                (76
                )Gain
                    on termination of electric power sales contracts
                
                
                -
                
                
                
                (380
                )
                
                
                -(Gain)
                    loss on sale of equipment
                
                
                (4
                )
                
                
                (6
                )
                
                
                499Gain
                    on sale of US Hydro note, net
                
                
                -
                
                
                
                (175
                )
                
                
                -Deferred
                    income taxes, net
                
                
                (168
                )
                
                
                (949
                )
                
                
                (2,773
                )Minority
                    interest in loss of subsidiaries
                
                
                35
                
                
                
                (154
                )
                
                
                (4,077
                )Changes
                    in operating assets and liabilitiesAccounts
                    receivable
                
                
                (1,894
                )
                
                
                (126
                )
                
                
                (232
                )Inventory
                
                
                (41
                )
                
                
                (76
                )
                
                
                (306
                )Prepaid
                    expenses and other current assets
                
                
                353
                
                
                
                (370
                )
                
                
                55Other
                    assets
                
                
                55
                
                
                
                (59
                )
                
                
                46Accounts
                    payable
                
                
                748
                
                
                
                (12
                )
                
                
                67Accrued
                    expenses
                
                
                (403
                )
                
                
                149
                
                
                
                (484
                )Due
                    to/from affiliates, net
                
                
                368
                
                
                
                1,615
                
                
                
                1,281Other
                    liabilities
                
                
                928
                
                
                
                84
                
                
                
                649Total
                    adjustments
                
                
                9,144
                
                
                
                3,122
                
                
                
                13,113Net
                    cash provided by operating activities
                
                
                5,185
                
                
                
                2,376
                
                
                
                2,087Cash
                    flows from investing activities:Capital
                    expenditures
                
                
                (2,038
                )
                
                
                (372
                )
                
                
                (315
                )Proceeds
                    from sale of equipment
                
                
                82
                
                
                
                109
                
                
                
                389Collections
                    from Notes receivable
                
                
                134
                
                
                
                464
                
                
                
                200Proceeds
                    from sale of Note receivable, net
                
                
                -
                
                
                
                3,975
                
                
                
                -Investment
                    in ZAP securities
                
                
                -
                
                
                
                (2,814
                )
                
                
                -Proceeds
                    from sale of investment in ZAP securities
                
                
                806
                
                
                
                1,404
                
                
                
                118Distributions
                    from RUK
                
                
                1,065
                
                
                
                1,043
                
                
                
                938Net
                    cash provided by investing activities
                
                
                49
                
                
                
                3,809
                
                
                
                1,330
 Cash
                    flows from financing activities:Repayments
                    under bank loan
                
                
                (1,137
                )
                
                
                (4,892
                )
                
                
                (1,978
                )Cash
                    distributions to shareholders
                
                
                (1,330
                )
                
                
                (1,330
                )
                
                
                (1,330
                )Cash
                    distributions to minority interest
                
                
                (1,674
                )
                
                
                -
                
                
                
                -Net
                    cash used in financing activities
                
                
                (4,141
                )
                
                
                (6,222
                )
                
                
                (3,308
                )Effect
                    of exchange rate on cash and cash equivalents
                
                
                44
                
                
                
                5
                
                
                
                (228
                )Net
                    increase (decrease) in cash and cash equivalents
                
                
                1,137
                
                
                
                (32
                )
                
                
                (119
                )Cash
                    and cash equivalents, beginning of year
                
                
                769
                
                
                
                801
                
                
                
                920Cash
                    and cash equivalents, end of year
                
                $
                1,906
                
                
                $
                769
                
                
                $
                801Supplemental
                    disclosure of cash flow information:Interest
                    paid
                
                $
                448
                
                
                $
                595
                
                
                $
                808Income
                    tax paid
                
                
                491
                
                
                
                102
                
                
                
                167Supplemental
                    disclosure of noncash investing activities:Distribution of ZAP securities to shareholders
                
                $
                -
                
                
                $
                2,079
                
                
                $
                -Dividend
                    receivable
                
                
                -
                
                
                
                -
                
                
                
                343Operating
                    assets and liabilities included in business acquisitions,including
                    purchase price adjustments:Deferred
                    income tax assets
                
                $
                -
                
                
                $
                -
                
                
                $
                1,435Goodwill
                
                
                -
                
                
                
                -
                
                
                
                5,709Accounts
                    payable and accrued expenses
                
                
                -
                
                
                
                -
                
                
                
                1,100Deferred
                    income tax liabilities
                
                
                -
                
                
                
                -
                
                
                
                7,144
 
 *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-6
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Balance Sheets (unaudited)*(in
                    thousands, except share amounts)*
                
                2005September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETS
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Current
                    assetsCash
                    and cash equivalents
                
                $
                2,169
                
                
                $
                1,193
                
                
                $
                608Accounts
                    receivable, net of allowance
                
                
                1,001
                
                
                
                1,301
                
                
                
                1,436Notes
                    receivable - current portion
                
                
                125
                
                
                
                131
                
                
                
                137Due
                    from affiliates
                
                
                790
                
                
                
                626
                
                
                
                2,100Deferred
                    income taxes - current portion
                
                
                340
                
                
                
                310
                
                
                
                386Inventory
                
                
                485
                
                
                
                539
                
                
                
                601Prepaid
                    expenses and other current assets
                
                
                354
                
                
                
                147
                
                
                
                349Total
                    current assets
                
                
                5,264
                
                
                
                4,247
                
                
                
                5,617Notes
                    receivable - noncurrent portion
                
                
                1,554
                
                
                
                1,582
                
                
                
                1,612Investments
                
                
                919
                
                
                
                1,916
                
                
                
                3,160Property,
                    plant and equipment, net
                
                
                21,401
                
                
                
                21,502
                
                
                
                21,693Goodwill
                
                
                227
                
                
                
                227
                
                
                
                227Intangibles,
                    net
                
                
                6,311
                
                
                
                6,702
                
                
                
                7,093Other
                    assets
                
                
                48
                
                
                
                52
                
                
                
                56Total
                    assets
                
                $
                35,724
                
                
                $
                36,228
                
                
                $
                39,458LIABILITIES
                    AND SHAREHOLDERS' EQUITYCurrent
                    liabilties:Accounts
                    payable
                
                $
                608
                
                
                $
                595
                
                
                $
                498Accrued
                    expenses
                
                
                566
                
                
                
                492
                
                
                
                338Long-term
                    debt - current portion
                
                
                1,271
                
                
                
                1,178
                
                
                
                3,391Due
                    to affiliates
                
                
                4,236
                
                
                
                3,387
                
                
                
                3,645Total
                    current liabilities
                
                
                6,681
                
                
                
                5,652
                
                
                
                7,872Long-term
                    debt - noncurrent portion
                
                
                2,916
                
                
                
                3,173
                
                
                
                1,294Other
                    liabilities
                
                
                1,740
                
                
                
                1,735
                
                
                
                1,714Deferred
                    income taxes, net
                
                
                1,550
                
                
                
                1,519
                
                
                
                1,620Minority
                    interest
                
                
                6,917
                
                
                
                6,914
                
                
                
                8,438Total
                    liabilities
                
                
                19,804
                
                
                
                18,993
                
                
                
                20,938Commitments
                    and contingenciesShareholders’
                    equity:Shareholders’
                    equity (658.1067 Investor Shares issued andoutstanding)
                
                
                16,300
                
                
                
                17,601
                
                
                
                18,874Managing
                    Shareholder's accumulated deficit (1 managementshare
                    issued and outstanding)
                
                
                (380
                )
                
                
                (366
                )
                
                
                (354
                )Total
                    shareholders’ equity
                
                
                15,920
                
                
                
                17,235
                
                
                
                18,520Total
                    liabilities and shareholders’ equity
                
                $
                35,724
                
                
                $
                36,228
                
                
                $
                39,458
 
 *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-7
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Balance Sheets (unaudited)*(in
                    thousands, except share amounts)*
                
                2004September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETS
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Current
                    assetsCash
                    and cash equivalents
                
                $
                1,108
                
                
                $
                1,062
                
                
                $
                1,415Accounts
                    receivable, net of allowance
                
                
                1,021
                
                
                
                1,024
                
                
                
                1,436Notes
                    receivable - current portion
                
                
                143
                
                
                
                271
                
                
                
                369Due
                    from affiliates
                
                
                1,553
                
                
                
                1,396
                
                
                
                1,401Inventory
                
                
                501
                
                
                
                412
                
                
                
                461Prepaid
                    expenses and other current assets
                
                
                783
                
                
                
                202
                
                
                
                484Total
                    current assets
                
                
                5,109
                
                
                
                4,367
                
                
                
                5,566Investments
                
                
                3,692
                
                
                
                6,426
                
                
                
                4,197Property,
                    plant and equipment, net
                
                
                20,608
                
                
                
                21,078
                
                
                
                21,585Goodwill
                
                
                227
                
                
                
                227
                
                
                
                227Intangibles,
                    net
                
                
                9,179
                
                
                
                9,600
                
                
                
                10,021Other
                    assets
                
                
                65
                
                
                
                6
                
                
                
                6Total
                    assets
                
                $
                38,880
                
                
                $
                41,704
                
                
                $
                41,602LIABILITIES
                    AND SHAREHOLDERS' EQUITYCurrent
                    liabilties:Accounts
                    payable
                
                $
                532
                
                
                $
                335
                
                
                $
                472Accrued
                    expenses
                
                
                963
                
                
                
                770
                
                
                
                639Long-term
                    debt - current portion
                
                
                3,201
                
                
                
                3,222
                
                
                
                3,233Due
                    to affiliates
                
                
                2,947
                
                
                
                2,385
                
                
                
                2,730Total
                    current liabilities
                
                
                7,643
                
                
                
                6,712
                
                
                
                7,074Long-term
                    debt - noncurrent portion
                
                
                1,730
                
                
                
                1,972
                
                
                
                2,221Other
                    liabilties
                
                
                712
                
                
                
                691
                
                
                
                670Deferred
                    income taxes, net
                
                
                1,306
                
                
                
                1,367
                
                
                
                1,809Minority
                    interest
                
                
                8,217
                
                
                
                8,515
                
                
                
                8,409Total
                    liabilities
                
                
                19,608
                
                
                
                19,257
                
                
                
                20,183Commitments
                    and contingenciesShareholders’
                    equity:Shareholders’
                    equity (658.1067 Investor Shares issued
                  and
                    outstanding)
                
                
                19,618
                
                
                
                22,767
                
                
                
                21,764Managing
                    Shareholder's accumulated deficit
                  (1
                    management share issued and outstanding)
                
                
                (346
                )
                
                
                (320
                )
                
                
                (345
                )Total
                    shareholders’ equity
                
                
                19,272
                
                
                
                22,447
                
                
                
                21,419Total
                    liabilities and shareholders’ equity
                
                $
                38,880
                
                
                $
                41,704
                
                
                $
                41,602
 *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-8
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Balance Sheets (unaudited)*(in
                    thousands, except share amounts)*
                
                2003September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETS
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Current
                    assetsCash
                    and cash equivalents
                
                $
                973
                
                
                $
                641
                
                
                $
                543Accounts
                    receivable, net of allowance
                
                
                984
                
                
                
                1,346
                
                
                
                1,627Notes
                    receivable - current portion
                
                
                200
                
                
                
                200
                
                
                
                200Due
                    from affiliates
                
                
                1,920
                
                
                
                2,168
                
                
                
                1,792Deferred
                    income taxes - current portion
                
                
                215
                
                
                
                381
                
                
                
                134Inventory
                
                
                318
                
                
                
                275
                
                
                
                262Prepaid
                    and other current assets
                
                
                422
                
                
                
                350
                
                
                
                342Total
                    current assets
                
                
                5,032
                
                
                
                5,361
                
                
                
                4,900Notes
                    receivable - noncurrent portion
                
                
                4,304
                
                
                
                4,633
                
                
                
                3,800Investments
                
                
                5,147
                
                
                
                5,789
                
                
                
                5,450Property,
                    plant and equipment, net
                
                
                23,347
                
                
                
                24,008
                
                
                
                26,857Goodwill
                
                
                227
                
                
                
                2,732
                
                
                
                2,732Intangibles,
                    net
                
                
                12,862
                
                
                
                13,365
                
                
                
                13,868Deferred
                    income taxes
                
                
                -
                
                
                
                1,184
                
                
                
                1,184Other
                    assets
                
                
                46
                
                
                
                38
                
                
                
                29Total
                    assets
                
                $
                50,965
                
                
                $
                57,110
                
                
                $
                58,820LIABILITIES
                    AND SHAREHOLDERS' EQUITYCurrent
                    liabilties:Accounts
                    payable
                
                $
                750
                
                
                $
                965
                
                
                $
                1,533Accrued
                    expenses
                
                
                94
                
                
                
                1,242
                
                
                
                1,287Long-term
                    debt - current portion
                
                
                7,338
                
                
                
                7,633
                
                
                
                8,024Due
                    to affiliates
                
                
                1,795
                
                
                
                1,485
                
                
                
                997Total
                    current liabilities
                
                
                9,977
                
                
                
                11,325
                
                
                
                11,841Long-term
                    debt - noncurrent portion
                
                
                2,846
                
                
                
                3,118
                
                
                
                3,317Deferred
                    income taxes, net
                
                
                3,104
                
                
                
                -
                
                
                
                -Minority
                    interest
                
                
                9,766
                
                
                
                11,836
                
                
                
                12,184Total
                    liabilities
                
                
                25,693
                
                
                
                26,279
                
                
                
                27,342Commitments
                    and contingenciesShareholders’
                    equity:Shareholders’
                    equity (658.1067 Investor Shares issued
                  and
                    outstanding)
                
                
                25,579
                
                
                
                31,082
                
                
                
                31,723Managing
                    Shareholder's accumulated deficit
                  (1
                    management share issued and outstanding)
                
                
                (307
                )
                
                
                (251
                )
                
                
                (245
                )Total
                    shareholders’ equity
                
                
                25,272
                
                
                
                30,831
                
                
                
                31,478Total
                    liabilities and shareholders’ equity
                
                $
                50,965
                
                
                $
                57,110
                
                
                $
                58,820
 
 *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-9
  The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Operations and Comprehensive (Loss)
                    Income (unaudited)*(in
                    thousands)*
                
                Nine
                    Months Ended September 30,
                
                
                Three
                    Months Ended September 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                9,304
                
                
                $
                8,317
                
                
                $
                8,025
                
                
                $
                2,875
                
                
                $
                2,529
                
                
                $
                2,336Cost
                    of revenues
                
                
                6,511
                
                
                
                6,245
                
                
                
                5,229
                
                
                
                2,454
                
                
                
                2,370
                
                
                
                1,798Gross
                    profit
                
                
                2,793
                
                
                
                2,072
                
                
                
                2,796
                
                
                
                421
                
                
                
                159
                
                
                
                538Operating
                    expenses:General
                    and administrative expenses
                
                
                2,791
                
                
                
                2,552
                
                
                
                2,126
                
                
                
                592
                
                
                
                1,063
                
                
                
                676Management
                    fee to the Managing Shareholder
                
                
                1,234
                
                
                
                1,234
                
                
                
                1,234
                
                
                
                411
                
                
                
                411
                
                
                
                411Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411
                
                
                
                -
                
                
                
                -
                
                
                
                -Impairment
                    of Goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433
                
                
                
                -
                
                
                
                -
                
                
                
                6,433Total
                    operating expenses
                
                
                4,025
                
                
                
                3,786
                
                
                
                13,204
                
                
                
                1,003
                
                
                
                1,474
                
                
                
                7,520Loss
                    from operations
                
                
                (1,232
                )
                
                
                (1,714
                )
                
                
                (10,408
                )
                
                
                (582
                )
                
                
                (1,315
                )
                
                
                (6,982
                )Other
                    income (expense):Interest
                    income
                
                
                70
                
                
                
                52
                
                
                
                46
                
                
                
                22
                
                
                
                26
                
                
                
                15Interest
                    expense
                
                
                (739
                )
                
                
                (647
                )
                
                
                (795
                )
                
                
                (275
                )
                
                
                (201
                )
                
                
                (263
                )Equity
                    in loss from RUK
                
                
                (425
                )
                
                
                (500
                )
                
                
                (522
                )
                
                
                (356
                )
                
                
                (189
                )
                
                
                (154
                )(Loss)
                    gain on distribution and sale of ZAP
                  securities
                
                
                (708
                )
                
                
                1,985
                
                
                
                76
                
                
                
                (568
                )
                
                
                591
                
                
                
                76Other
                    income (expense), net
                
                
                588
                
                
                
                189
                
                
                
                (545
                )
                
                
                (5
                )
                
                
                15
                
                
                
                17Total
                    other (expense) income, net
                
                
                (1,214
                )
                
                
                1,079
                
                
                
                (1,740
                )
                
                
                (1,182
                )
                
                
                242
                
                
                
                (309
                )Loss
                    before income tax expense (benefit) and minority interest
                
                
                (2,446
                )
                
                
                (635
                )
                
                
                (12,148
                )
                
                
                (1,764
                )
                
                
                (1,073
                )
                
                
                (7,291
                )Income
                    tax expense (benefit)
                
                
                62
                
                
                
                (723
                )
                
                
                (1,855
                )
                
                
                -
                
                
                
                (49
                )
                
                
                (506
                )(Loss)
                    income before minority interest
                
                
                (2,508
                )
                
                
                88
                
                
                
                (10,293
                )
                
                
                (1,764
                )
                
                
                (1,024
                )
                
                
                (6,785
                )Minority
                    interest in the (earnings) loss of subsidiaries
                
                
                (83
                )
                
                
                37
                
                
                
                2,560
                
                
                
                70
                
                
                
                302
                
                
                
                1,852Net
                    (loss) income
                
                
                (2,591
                )
                
                
                125
                
                
                
                (7,733
                )
                
                
                (1,694
                )
                
                
                (722
                )
                
                
                (4,933
                )Foreign
                    currency translation adjustment
                
                
                508
                
                
                
                (99
                )
                
                
                (3,657
                )
                
                
                138
                
                
                
                (5
                )
                
                
                (112
                )Unrealized
                    (loss) gain on investment in ZAP securities
                
                
                (272
                )
                
                
                305
                
                
                
                480
                
                
                
                573
                
                
                
                (1,611
                )
                
                
                150Comprehensive
                    (loss) income
                
                $
                (2,355
                )
                
                $
                331
                
                
                $
                (10,910
                )
                
                $
                (983
                )
                
                $
                (2,338
                )
                
                $
                (4,895
                )Managing
                    Shareholder - Net (loss) income
                
                $
                (26
                )
                
                $
                1
                
                
                $
                (77
                )
                
                $
                (17
                )
                
                $
                (7
                )
                
                $
                (49
                )Shareholders
                    - Net (loss) income
                
                $
                (2,565
                )
                
                $
                124
                
                
                $
                (7,656
                )
                
                $
                (1,677
                )
                
                $
                (715
                )
                
                $
                (4,884
                )Net
                    (loss) income per Investor Share
                
                $
                (4
                )
                
                $
                -
                
                
                $
                (12
                )
                
                $
                (3
                )
                
                $
                (1
                )
                
                $
                (8
                )
  *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-10
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Operations and Comprehensive (Loss)
                    Income (unaudited)*(in
                    thousands)*
                
                Six
                    Months Ended June 30,
                
                
                Three
                    Months Ended June 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                6,429
                
                
                $
                5,788
                
                
                $
                5,689
                
                
                $
                3,514
                
                
                $
                3,123
                
                
                $
                2,988Cost
                    of revenues
                
                
                4,057
                
                
                
                3,875
                
                
                
                3,431
                
                
                
                2,117
                
                
                
                2,087
                
                
                
                1,746Gross
                    profit
                
                
                2,372
                
                
                
                1,913
                
                
                
                2,258
                
                
                
                1,397
                
                
                
                1,036
                
                
                
                1,242Operating
                    expenses:General
                    and administrative expenses
                
                
                2,199
                
                
                
                1,489
                
                
                
                1,450
                
                
                
                705
                
                
                
                754
                
                
                
                555Management
                    fee to the Managing Shareholder
                
                
                823
                
                
                
                823
                
                
                
                823
                
                
                
                412
                
                
                
                412
                
                
                
                412Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411
                
                
                
                -
                
                
                
                -
                
                
                
                -Total
                    operating expenses
                
                
                3,022
                
                
                
                2,312
                
                
                
                5,684
                
                
                
                1,117
                
                
                
                1,166
                
                
                
                967(Loss)
                    income from operations
                
                
                (650
                )
                
                
                (399
                )
                
                
                (3,426
                )
                
                
                280
                
                
                
                (130
                )
                
                
                275Other
                    income (expense):Interest
                    income
                
                
                48
                
                
                
                26
                
                
                
                31
                
                
                
                23
                
                
                
                25
                
                
                
                14Interest
                    expense
                
                
                (464
                )
                
                
                (446
                )
                
                
                (532
                )
                
                
                (263
                )
                
                
                (198
                )
                
                
                (281
                )Equity
                    in (loss) income from RUK
                
                
                (69
                )
                
                
                (311
                )
                
                
                (368
                )
                
                
                16
                
                
                
                (159
                )
                
                
                (233
                )(Loss)
                    gain on distribution and sale of ZAP
                  securities
                
                
                (140
                )
                
                
                1,394
                
                
                
                -
                
                
                
                (102
                )
                
                
                1,394
                
                
                
                -Other
                    income (expense), net
                
                
                593
                
                
                
                174
                
                
                
                (562
                )
                
                
                22
                
                
                
                (7
                )
                
                
                (562
                )Total
                    other income (expense), net
                
                
                (32
                )
                
                
                837
                
                
                
                (1,431
                )
                
                
                (304
                )
                
                
                1,055
                
                
                
                (1,062
                )(Loss)
                    income before income tax expense (benefit) and minority
                    interest
                
                
                (682
                )
                
                
                438
                
                
                
                (4,857
                )
                
                
                (24
                )
                
                
                925
                
                
                
                (787
                )Income
                    tax expense (benefit)
                
                
                62
                
                
                
                (674
                )
                
                
                (1,349
                )
                
                
                34
                
                
                
                (356
                )
                
                
                (126
                )(Loss)
                    income before minority interest
                
                
                (744
                )
                
                
                1,112
                
                
                
                (3,508
                )
                
                
                (58
                )
                
                
                1,281
                
                
                
                (661
                )Minority
                    interest in the (earnings) loss of subsidiaries
                
                
                (153
                )
                
                
                (265
                )
                
                
                708
                
                
                
                (183
                )
                
                
                (139
                )
                
                
                44Net
                    (loss) income
                
                
                (897
                )
                
                
                847
                
                
                
                (2,800
                )
                
                
                (241
                )
                
                
                1,142
                
                
                
                (617
                )Foreign
                    currency translation adjustment
                
                
                370
                
                
                
                (94
                )
                
                
                (3,545
                )
                
                
                (148
                )
                
                
                (103
                )
                
                
                (365
                )Unrealized
                    (loss) gain on investment in ZAP securities
                
                
                (845
                )
                
                
                1,916
                
                
                
                330
                
                
                
                (563
                )
                
                
                1,896
                
                
                
                333Comprehensive
                    (loss) income
                
                $
                (1,372
                )
                
                $
                2,669
                
                
                $
                (6,015
                )
                
                $
                (952
                )
                
                $
                2,935
                
                
                $
                (649
                )Managing
                    Shareholder - Net (loss) income
                
                $
                (9
                )
                
                $
                8
                
                
                $
                (28
                )
                
                $
                (2
                )
                
                $
                11
                
                
                $
                (6
                )Shareholders
                    - Net (loss) income
                
                $
                (888
                )
                
                $
                839
                
                
                $
                (2,772
                )
                
                $
                (239
                )
                
                $
                1,131
                
                
                $
                (611
                )Net
                    (loss) income per Investor Share
                
                $
                (1
                )
                
                $
                1
                
                
                $
                (4
                )
                
                $
                -
                
                
                $
                2
                
                
                $
                (1
                )
 *The
          accompanying notes are an integral part of these financial
          statements.*
 
 F-11
  The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Operations and Comprehensive
                    Loss (unaudited)*(in
                    thousands)*
                
                Three
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                2,915
                
                
                $
                2,665
                
                
                $
                2,701Cost
                    of revenues
                
                
                1,940
                
                
                
                1,788
                
                
                
                1,685Gross
                    profit
                
                
                975
                
                
                
                877
                
                
                
                1,016Operating
                    expenses:General
                    and administrative expenses
                
                
                1,494
                
                
                
                735
                
                
                
                895Management
                    fee to the Managing Shareholder
                
                
                411
                
                
                
                411
                
                
                
                411Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411Total
                    operating expenses
                
                
                1,905
                
                
                
                1,146
                
                
                
                4,717Loss
                    from operations
                
                
                (930
                )
                
                
                (269
                )
                
                
                (3,701
                )Other
                    income (expense):Interest
                    income
                
                
                25
                
                
                
                1
                
                
                
                17Interest
                    expense
                
                
                (201
                )
                
                
                (248
                )
                
                
                (251
                )Equity
                    in loss from RUK
                
                
                (85
                )
                
                
                (152
                )
                
                
                (135
                )Loss
                    on sale of investment in ZAP securities
                
                
                (38
                )
                
                
                -
                
                
                
                -Other
                    income, net
                
                
                571
                
                
                
                181
                
                
                
                -Total
                    other income (expense), net
                
                
                272
                
                
                
                (218
                )
                
                
                (369
                )Loss
                    before income tax expense (benefit) and minority interest
                
                
                (658
                )
                
                
                (487
                )
                
                
                (4,070
                )Income
                    tax expense (benefit)
                
                
                28
                
                
                
                (318
                )
                
                
                (1,223
                )Loss
                    before minority interest
                
                
                (686
                )
                
                
                (169
                )
                
                
                (2,847
                )Minority
                    interest in the loss (earnings) of subsidiaries
                
                
                30
                
                
                
                (126
                )
                
                
                664Net
                    loss
                
                
                (656
                )
                
                
                (295
                )
                
                
                (2,183
                )Foreign
                    currency translation adjustment
                
                
                518
                
                
                
                9
                
                
                
                (3,181
                )Unrealized
                    (loss) gain on investment in ZAP securities
                
                
                (282
                )
                
                
                20
                
                
                
                (4
                )Comprehensive
                    loss
                
                $
                (420
                )
                
                $
                (266
                )
                
                $
                (5,368
                )Managing
                    Shareholder - Net loss
                
                $
                (7
                )
                
                $
                (3
                )
                
                $
                (22
                )Shareholders
                    - Net loss
                
                $
                (649
                )
                
                $
                (292
                )
                
                $
                (2,161
                )Net
                    loss per Investor Share
                
                $
                (1
                )
                
                $
                -
                
                
                $
                (3
                )
  *The
          accompanying notes are an integral part of these financial
          statements.*
 F-12
 The
                      Ridgewood Power Growth FundConsolidated
                      Statements of Changes in Shareholders' Equity (Deficit)Three
                      Months, Six Months and Nine Months Ended March, June and September
                      for
                      2003, 2004 and 2005 (unaudited)*(in
                      thousands)*
                  
                  Share
                  
                  
                  Retained
                  
                  
                  Accumulated
                      Other
                  
                  
                  Total
                      Shareholders'Capital
                  
                  
                  Earnings
                      (Deficit)
                  
                  
                  Comprehensive
                      Loss
                  
                  
                  Equity**Shareholders:****Three
                      months ended 03/31/03**Shareholders'
                      balance January 1, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (14,839
                  )
                  
                  $
                  (4,942
                  )
                  
                  $
                  37,037Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (2,161
                  )
                  
                  
                  -
                  
                  
                  
                  (2,161
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,149
                  )
                  
                  
                  (3,149
                  )Unrealized
                      loss on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4
                  )
                  
                  
                  (4
                  )Shareholders'
                      balance March 31, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (17,000
                  )
                  
                  $
                  (8,095
                  )
                  
                  $
                  31,723**Six
                      months ended 06/30/03**Shareholders'
                      balance January 1, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (14,839
                  )
                  
                  $
                  (4,942
                  )
                  
                  $
                  37,037Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (2,772
                  )
                  
                  
                  -
                  
                  
                  
                  (2,772
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,510
                  )
                  
                  
                  (3,510
                  )Unrealized
                      gain on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  327
                  
                  
                  
                  327Shareholders'
                      balance June 30, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (17,611
                  )
                  
                  $
                  (8,125
                  )
                  
                  $
                  31,082**Nine
                      months ended 09/30/03**Shareholders'
                      balance January 1, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (14,839
                  )
                  
                  $
                  (4,942
                  )
                  
                  $
                  37,037Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (7,656
                  )
                  
                  
                  -
                  
                  
                  
                  (7,656
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,620
                  )
                  
                  
                  (3,620
                  )Unrealized
                      gain on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  476
                  
                  
                  
                  476Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (658
                  )
                  
                  
                  -
                  
                  
                  
                  (658
                  )Shareholders'
                      balance September 30, 2003, restated
                  
                  $
                  56,818
                  
                  
                  $
                  (23,153
                  )
                  
                  $
                  (8,086
                  )
                  
                  $
                  25,579**Three
                      months ended 03/31/04**Shareholders'
                      balance January 1, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (27,070
                  )
                  
                  $
                  (8,336
                  )
                  
                  $
                  22,356Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (292
                  )
                  
                  
                  -
                  
                  
                  
                  (292
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  9
                  
                  
                  
                  9Unrealized
                      gain on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  20
                  
                  
                  
                  20Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (329
                  )
                  
                  
                  -
                  
                  
                  
                  (329
                  )Shareholders'
                      balance March 31, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (27,691
                  )
                  
                  $
                  (8,307
                  )
                  
                  $
                  21,764**Six
                      months ended 06/30/04**Shareholders'
                      balance January 1, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (27,070
                  )
                  
                  $
                  (8,336
                  )
                  
                  $
                  22,356Net
                      income
                  
                  
                  -
                  
                  
                  
                  839
                  
                  
                  
                  -
                  
                  
                  
                  839Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (93
                  )
                  
                  
                  (93
                  )Unrealized
                      gain on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,897
                  
                  
                  
                  1,897Distribution
                      of ZAP shares
                  
                  
                  -
                  
                  
                  
                  (1,574
                  )
                  
                  
                  -
                  
                  
                  
                  (1,574
                  )Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (658
                  )
                  
                  
                  -
                  
                  
                  
                  (658
                  )Shareholders'
                      balance June 30, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (28,463
                  )
                  
                  $
                  (6,532
                  )
                  
                  $
                  22,767**Nine
                      months ended 09/30/04**Shareholders'
                      balance January 1, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (27,070
                  )
                  
                  $
                  (8,336
                  )
                  
                  $
                  22,356Net
                      income
                  
                  
                  -
                  
                  
                  
                  124
                  
                  
                  
                  -
                  
                  
                  
                  124Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (98
                  )
                  
                  
                  (98
                  )Unrealized
                      gain on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  302
                  
                  
                  
                  302Distribution
                      of ZAP shares
                  
                  
                  -
                  
                  
                  
                  (2,079
                  )
                  
                  
                  -
                  
                  
                  
                  (2,079
                  )Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (987
                  )
                  
                  
                  -
                  
                  
                  
                  (987
                  )Shareholders'
                      balance September 30, 2004, restated
                  
                  $
                  57,762
                  
                  
                  $
                  (30,012
                  )
                  
                  $
                  (8,132
                  )
                  
                  $
                  19,618**Three
                      months ended 03/31/05**Shareholders'
                      balance January 1, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (31,205
                  )
                  
                  $
                  (7,938
                  )
                  
                  $
                  19,618Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (649
                  )
                  
                  
                  -
                  
                  
                  
                  (649
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  513
                  
                  
                  
                  513Unrealized
                      loss on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (279
                  )
                  
                  
                  (279
                  )Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (329
                  )
                  
                  
                  -
                  
                  
                  
                  (329
                  )Shareholders'
                      balance March 31, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (32,183
                  )
                  
                  $
                  (7,704
                  )
                  
                  $
                  18,874**Six
                      months ended 06/30/05**Shareholders'
                      balance January 1, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (31,205
                  )
                  
                  $
                  (7,938
                  )
                  
                  $
                  19,618Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (888
                  )
                  
                  
                  -
                  
                  
                  
                  (888
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  366
                  
                  
                  
                  366Unrealized
                      loss on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (837
                  )
                  
                  
                  (837
                  )Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (658
                  )
                  
                  
                  -
                  
                  
                  
                  (658
                  )Shareholders'
                      balance June 30, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (32,751
                  )
                  
                  $
                  (8,409
                  )
                  
                  $
                  17,601**Nine
                      months ended 09/30/05**Shareholders'
                      balance January 1, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (31,205
                  )
                  
                  $
                  (7,938
                  )
                  
                  $
                  19,618Net
                      loss
                  
                  
                  -
                  
                  
                  
                  (2,565
                  )
                  
                  
                  -
                  
                  
                  
                  (2,565
                  )Foreign
                      currency translation adjustment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  503
                  
                  
                  
                  503Unrealized
                      loss on investment in ZAP securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (269
                  )
                  
                  
                  (269
                  )Cash
                      distributions
                  
                  
                  -
                  
                  
                  
                  (987
                  )
                  
                  
                  -
                  
                  
                  
                  (987
                  )Shareholders'
                      balance September 30, 2005, restated
                  
                  $
                  58,761
                  
                  
                  $
                  (34,757
                  )
                  
                  $
                  (7,704
                  )
                  
                  $
                  16,300
 **Managing
                  Shareholder:****Three
                    months ended 03/31/03**Managing
                    Shareholders'  balance January 1, 2003, restated
                
                $
                9
                
                
                $
                (150
                )
                
                $
                (50
                )
                
                $
                (191
                )Net
                    loss
                
                
                -
                
                
                
                (22
                )
                
                
                -
                
                
                
                (22
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (32
                )
                
                
                (32
                )Managing
                    Shareholder's balance March 31, 2003, restated
                
                $
                9
                
                
                $
                (172
                )
                
                $
                (82
                )
                
                $
                (245
                )**Six
                    months ended 06/30/03**Managing
                    Shareholder's balance January 1, 2003, restated
                
                $
                9
                
                
                $
                (150
                )
                
                $
                (50
                )
                
                $
                (191
                )Net
                    loss
                
                
                -
                
                
                
                (28
                )
                
                
                -
                
                
                
                (28
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (35
                )
                
                
                (35
                )Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                3
                
                
                
                3Managing
                    Shareholder's balance June 30, 2003, restated
                
                $
                9
                
                
                $
                (178
                )
                
                $
                (82
                )
                
                $
                (251
                )**Nine
                    months ended 09/30/03**Managing
                    Shareholder's balance January 1, 2003, restated
                
                $
                9
                
                
                $
                (150
                )
                
                $
                (50
                )
                
                $
                (191
                )Net
                    loss
                
                
                -
                
                
                
                (77
                )
                
                
                -
                
                
                
                (77
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (37
                )
                
                
                (37
                )Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                5
                
                
                
                5Cash
                    distributions
                
                
                -
                
                
                
                (7
                )
                
                
                -
                
                
                
                (7
                )Managing
                    Shareholder's balance September 30, 2003, restated
                
                $
                9
                
                
                $
                (234
                )
                
                $
                (82
                )
                
                $
                (307
                )**Three
                    months ended 03/31/04**Managing
                    Shareholder's balance January 1, 2004, restated
                
                $
                18
                
                
                $
                (273
                )
                
                $
                (84
                )
                
                $
                (339
                )Net
                    loss
                
                
                -
                
                
                
                (3
                )
                
                
                -
                
                
                
                (3
                )Cash
                    distributions
                
                
                -
                
                
                
                (3
                )
                
                
                -
                
                
                
                (3
                )Managing
                    Shareholder's balance March 31, 2004, restated
                
                $
                18
                
                
                $
                (279
                )
                
                $
                (84
                )
                
                $
                (345
                )**Six
                    months ended 06/30/04**Managing
                    Shareholder's balance January 1, 2004, restated
                
                $
                18
                
                
                $
                (273
                )
                
                $
                (84
                )
                
                $
                (339
                )Net
                    income
                
                
                -
                
                
                
                8
                
                
                
                -
                
                
                
                8Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (1
                )
                
                
                (1
                )Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                19
                
                
                
                19Cash
                    distributions
                
                
                -
                
                
                
                (7
                )
                
                
                -
                
                
                
                (7
                )Managing
                    Shareholder's balance June 30, 2004, restated
                
                $
                18
                
                
                $
                (272
                )
                
                $
                (66
                )
                
                $
                (320
                )**Nine
                    months ended 09/30/04**Managing
                    Shareholder's balance January 1, 2004, restated
                
                $
                18
                
                
                $
                (273
                )
                
                $
                (84
                )
                
                $
                (339
                )Net
                    income
                
                
                -
                
                
                
                1
                
                
                
                -
                
                
                
                1Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                (1
                )
                
                
                (1
                )Unrealized
                    gain on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                3
                
                
                
                3Cash
                    distributions
                
                
                -
                
                
                
                (10
                )
                
                
                -
                
                
                
                (10
                )Managing
                    Shareholder's balance September 30, 2004, restated
                
                $
                18
                
                
                $
                (282
                )
                
                $
                (82
                )
                
                $
                (346
                )**Three
                    months ended 03/31/05**Managing
                    Shareholder's balance January 1, 2005, restated
                
                $
                29
                
                
                $
                (295
                )
                
                $
                (80
                )
                
                $
                (346
                )Net
                    loss
                
                
                -
                
                
                
                (7
                )
                
                
                -
                
                
                
                (7
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                5
                
                
                
                5Unrealized
                    loss on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                (3
                )
                
                
                (3
                )Cash
                    distributions
                
                
                -
                
                
                
                (3
                )
                
                
                -
                
                
                
                (3
                )Managing
                    Shareholder's balance March 31, 2005, restated
                
                $
                29
                
                
                $
                (305
                )
                
                $
                (78
                )
                
                $
                (354
                )**Six
                    months ended 06/30/05**Managing
                    Shareholder's balance January 1, 2005, restated
                
                $
                29
                
                
                $
                (295
                )
                
                $
                (80
                )
                
                $
                (346
                )Net
                    loss
                
                
                -
                
                
                
                (9
                )
                
                
                -
                
                
                
                (9
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                4
                
                
                
                4Unrealized
                    loss on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                (8
                )
                
                
                (8
                )Cash
                    distributions
                
                
                -
                
                
                
                (7
                )
                
                
                -
                
                
                
                (7
                )Managing
                    Shareholder's balance June 30, 2005, restated
                
                $
                29
                
                
                $
                (311
                )
                
                $
                (84
                )
                
                $
                (366
                )**Nine
                    months ended 09/30/05**Managing
                    Shareholder's balance January 1, 2005, restated
                
                $
                29
                
                
                $
                (295
                )
                
                $
                (80
                )
                
                $
                (346
                )Net
                    loss
                
                
                -
                
                
                
                (26
                )
                
                
                -
                
                
                
                (26
                )Foreign
                    currency translation adjustment
                
                
                -
                
                
                
                -
                
                
                
                5
                
                
                
                5Unrealized
                    loss on investment in ZAP securities
                
                
                -
                
                
                
                -
                
                
                
                (3
                )
                
                
                (3
                )Cash
                    distributions
                
                
                -
                
                
                
                (10
                )
                
                
                -
                
                
                
                (10
                )Managing
                    Shareholder's balance September 30, 2005, restated
                
                $
                29
                
                
                $
                (331
                )
                
                $
                (78
                )
                
                $
                (380
                )
  *The
        accompanying notes are an integral part of these financial
        statements.*
 F-13
 
 The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Cash Flows (unaudited)Nine
                    Months Ended September 30,*(in
                    thousands)*
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Cash
                    flows from operating activities:Net
                    (loss) income
                
                $
                (2,591
                )
                
                $
                125
                
                
                $
                (7,733
                )Adjustments
                    to reconcile net (loss) income to net cash provided
                  by
                    operating activities:Depreciation
                    and amortization
                
                
                2,856
                
                
                
                2,809
                
                
                
                2,901Provision
                    for doubtful accounts
                
                
                -
                
                
                
                -
                
                
                
                120Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411Impairment
                    of Goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433Equity
                    in loss of RUK
                
                
                425
                
                
                
                500
                
                
                
                522Loss
                    (gain) on distribution and sale of  ZAP
                    securities
                
                
                708
                
                
                
                (1,985
                )
                
                
                (76
                )(Gain)
                    loss on sale of equipment
                
                
                (5
                )
                
                
                (6
                )
                
                
                561Gain
                    on sale of US Hydro note, net
                
                
                -
                
                
                
                (175
                )
                
                
                -Deferred
                    income taxes, net
                
                
                (44
                )
                
                
                (896
                )
                
                
                (2,087
                )Minority
                    interest in earning (loss) from subsidiaries
                
                
                83
                
                
                
                (37
                )
                
                
                (2,560
                )Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                75
                
                
                
                36
                
                
                
                173Inventory
                
                
                113
                
                
                
                (26
                )
                
                
                (136
                )Prepaid
                    expenses and other current assets
                
                
                226
                
                
                
                (610
                )
                
                
                (191
                )Other
                    assets
                
                
                11
                
                
                
                (59
                )
                
                
                5Accounts
                    payable
                
                
                55
                
                
                
                (10
                )
                
                
                176Accrued
                    expenses
                
                
                (127
                )
                
                
                477
                
                
                
                (873
                )Due
                    from/to affiliates, net
                
                
                2,056
                
                
                
                1,418
                
                
                
                947Other
                    liabilities
                
                
                934
                
                
                
                64
                
                
                
                -Total
                    adjustments
                
                
                7,366
                
                
                
                1,500
                
                
                
                9,326Net
                    cash provided by operating activities
                
                
                4,775
                
                
                
                1,625
                
                
                
                1,593Cash
                    flows from investing activities:Capital
                    expenditures
                
                
                (1,898
                )
                
                
                (369
                )
                
                
                (341
                )Proceeds
                    from sale of equipment
                
                
                52
                
                
                
                91
                
                
                
                147Collections
                    from notes receivable
                
                
                95
                
                
                
                321
                
                
                
                200Distributions
                    from RUK
                
                
                1,051
                
                
                
                698
                
                
                
                621Investment
                    in ZAP securities
                
                
                -
                
                
                
                (1,064
                )
                
                
                -Proceeds
                    from sale of investment in ZAP securities
                
                
                709
                
                
                
                657
                
                
                
                118Proceeds
                    from sale of  note receivable, net
                
                
                -
                
                
                
                3,975
                
                
                
                -Net
                    cash provided by investing activities
                
                
                9
                
                
                
                4,309
                
                
                
                745Cash
                    flows from financing activities:Repayments
                    under bank loans
                
                
                (757
                )
                
                
                (4,620
                )
                
                
                (1,399
                )Distribution
                    to minority interest
                
                
                (1,674
                )
                
                
                -
                
                
                
                -Distribution
                    to shareholders
                
                
                (997
                )
                
                
                (997
                )
                
                
                (665
                )Net
                    cash used in financing activities
                
                
                (3,428
                )
                
                
                (5,617
                )
                
                
                (2,064
                )Effect
                    of exchange rate on cash and cash equivalents
                
                
                44
                
                
                
                (10
                )
                
                
                (221
                )Net
                    increase in cash and cash equivalents
                
                
                1,400
                
                
                
                307
                
                
                
                53Cash
                    and cash equivalents, beginning of period
                
                
                769
                
                
                
                801
                
                
                
                920Cash
                    and cash equivalents, end of period
                
                $
                2,169
                
                
                $
                1,108
                
                
                $
                973Supplemental
                    disclosure:Interest
                    paid
                
                $
                246
                
                
                $
                231
                
                
                $
                421Income
                    tax paid
                
                
                376
                
                
                
                -
                
                
                
                167
 *The
        accompanying notes are an integral part of these financial
        statements.*
 
 F-14
  The
                    Ridgewood Power Growth FundConsolidated
                    Statements of Cash Flows (unaudited)Six
                    Months Ended June 30,(in
                    thousands)
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Cash
                    flows from operating activities:Net
                    (loss) income
                
                $
                (897
                )
                
                $
                847
                
                
                $
                (2,800
                )Adjustments
                    to reconcile net (loss) income to net cash provided by
                  operating
                    activities:Depreciation
                    and amortization
                
                
                1,873
                
                
                
                1,836
                
                
                
                1,959Provision
                    for bad debts
                
                
                -
                
                
                
                -
                
                
                
                151Write-down
                    of Notes receivable
                
                
                -
                
                
                
                -
                
                
                
                3,411Equity
                    in loss of RUK
                
                
                69
                
                
                
                311
                
                
                
                368Loss
                    (gain) on distribution and sale of ZAP securities
                
                
                140
                
                
                
                (1,394
                )
                
                
                -(Gain)
                    loss on sale of equipment
                
                
                (5
                )
                
                
                10
                
                
                
                579Gain
                    on sale of US Hydro note, net
                
                
                -
                
                
                
                (175
                )
                
                
                -Deferred
                    income taxes, net
                
                
                (44
                )
                
                
                (836
                )
                
                
                (1,566
                )Minority
                    interest in earning (loss) of subsidiaries
                
                
                153
                
                
                
                265
                
                
                
                (708
                )Changes
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                (236
                )
                
                
                32
                
                
                
                (201
                )Inventory
                
                
                52
                
                
                
                63
                
                
                
                (66
                )Prepaid
                    expenses and other current assets
                
                
                430
                
                
                
                (28
                )
                
                
                (119
                )Other
                    assets
                
                
                7
                
                
                
                -
                
                
                
                (34
                )Accounts
                    payable
                
                
                48
                
                
                
                (207
                )
                
                
                388Accrued
                    expenses
                
                
                (192
                )
                
                
                286
                
                
                
                (744
                )Due
                    from/to affiliates, net
                
                
                1,357
                
                
                
                1,008
                
                
                
                303Other
                    liabilities
                
                
                930
                
                
                
                43
                
                
                
                -Total
                    adjustments
                
                
                4,582
                
                
                
                1,214
                
                
                
                3,721Net
                    cash provided by operating activities
                
                
                3,685
                
                
                
                2,061
                
                
                
                921Cash
                    flows from investing activities:Capital
                    expenditures
                
                
                (1,662
                )
                
                
                (277
                )
                
                
                (126
                )Collections
                    on notes receivable
                
                
                60
                
                
                
                193
                
                
                
                -Proceeds
                    from sale of  investment in ZAP securities
                
                
                424
                
                
                
                -
                
                
                
                -Proceeds
                    from sale of  note receivable, net
                
                
                -
                
                
                
                3,975
                
                
                
                -Proceeds
                    from sale of equipment
                
                
                52
                
                
                
                49
                
                
                
                26Distribution
                    from RUK
                
                
                718
                
                
                
                353
                
                
                
                -Investment
                    in ZAP securities
                
                
                -
                
                
                
                (1,064
                )
                
                
                -Net
                    cash  (used in) provided by investing activities
                
                
                (408
                )
                
                
                3,229
                
                
                
                (100
                )Cash
                    flows from financing activities:Distribution
                    to shareholders
                
                
                (665
                )
                
                
                (665
                )
                
                
                -Distribution
                    to minority shareholder
                
                
                (1,674
                )
                
                
                -
                
                
                
                -Repayments
                    under bank loans
                
                
                (547
                )
                
                
                (4,354
                )
                
                
                (908
                )Net
                    cash used in financing activities
                
                
                (2,886
                )
                
                
                (5,019
                )
                
                
                (908
                )Effect
                    of exchange rate on cash and cash equivalents
                
                
                33
                
                
                
                (10
                )
                
                
                (192
                )Net
                    increase (decrease) in cash and cash equivalents
                
                
                424
                
                
                
                261
                
                
                
                (279
                )Cash
                    and cash equivalents, beginning of period
                
                
                769
                
                
                
                801
                
                
                
                920Cash
                    and cash equivalents, end of period
                
                $
                1,193
                
                
                $
                1,062
                
                
                $
                641Supplemental
                    disclosure:Interest
                    paid
                
                $
                219
                
                
                $
                167
                
                
                $
                293Income
                    tax paid
                
                
                336
                
                
                
                -
                
                
                
                118
 
 The
        accompanying notes are an integral part of
        these financial statements.
 
 F-15
 The
                      Ridgewood Power Growth FundConsolidated
                      Statements of Cash Flows (unaudited)Three
                      Months Ended March 31,(in
                      thousands)
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Cash
                      flows from operating activities:Net
                      loss
                  
                  $
                  (656
                  )
                  
                  $
                  (295
                  )
                  
                  $
                  (2,183
                  )Adjustments
                      to reconcile net loss to net cash provided by
                    operating
                      activities:Depreciation
                      and amortization
                  
                  
                  932
                  
                  
                  
                  870
                  
                  
                  
                  1,027Provision
                      for bad debts
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  161Write-down
                      of Notes receivable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,411Equity
                      in loss of RUK
                  
                  
                  85
                  
                  
                  
                  152
                  
                  
                  
                  135Loss
                      on sale of investment in ZAP securities
                  
                  
                  38
                  
                  
                  
                  -
                  
                  
                  
                  -Gain
                      on sale of US Hydro note, net
                  
                  
                  -
                  
                  
                  
                  (175
                  )
                  
                  
                  -Deferred
                      income taxes, net
                  
                  
                  (20
                  )
                  
                  
                  (394
                  )
                  
                  
                  (1,318
                  )Minority
                      interest in (loss) earning of subsidiaries
                  
                  
                  (30
                  )
                  
                  
                  126
                  
                  
                  
                  (664
                  )Changes
                      in operating assets and liabilities:Accounts
                      receivable
                  
                  
                  (367
                  )
                  
                  
                  (375
                  )
                  
                  
                  (448
                  )Inventory
                  
                  
                  (7
                  )
                  
                  
                  17
                  
                  
                  
                  (64
                  )Prepaid
                      expenses and other current assets
                  
                  
                  227
                  
                  
                  
                  (309
                  )
                  
                  
                  (112
                  )Other
                      assets
                  
                  
                  3
                  
                  
                  
                  -
                  
                  
                  
                  22Accounts
                      payable
                  
                  
                  (66
                  )
                  
                  
                  (75
                  )
                  
                  
                  920Accrued
                      expenses
                  
                  
                  (346
                  )
                  
                  
                  156
                  
                  
                  
                  (727
                  )Due
                      from/to affiliates, net
                  
                  
                  138
                  
                  
                  
                  1,347
                  
                  
                  
                  220Other
                      liabilities
                  
                  
                  909
                  
                  
                  
                  21
                  
                  
                  
                  -Total
                      adjustments
                  
                  
                  1,496
                  
                  
                  
                  1,361
                  
                  
                  
                  2,563Net
                      cash  provided by operating activities
                  
                  
                  840
                  
                  
                  
                  1,066
                  
                  
                  
                  380Cash
                      flows from investing activities:Capital
                      expenditures
                  
                  
                  (152
                  )
                  
                  
                  (67
                  )
                  
                  
                  (38
                  )Deposits
                      on equipment
                  
                  
                  (1,008
                  )
                  
                  
                  -
                  
                  
                  
                  -Proceeds
                      from sale of  note receivable
                  
                  
                  -
                  
                  
                  
                  3,975
                  
                  
                  
                  -Proceeds
                      from sale of  equipment
                  
                  
                  44
                  
                  
                  
                  -
                  
                  
                  
                  -Collections
                      on  notes receivable
                  
                  
                  24
                  
                  
                  
                  96
                  
                  
                  
                  -Proceeds
                      from sale of investment in ZAP securities
                  
                  
                  264
                  
                  
                  
                  -
                  
                  
                  
                  -Distribution
                      from RUK
                  
                  
                  359
                  
                  
                  
                  -
                  
                  
                  
                  -Net
                      cash (used in) provided by investing activities
                  
                  
                  (469
                  )
                  
                  
                  4,004
                  
                  
                  
                  (38
                  )Cash
                      flows from financing activities:Distribution
                      to shareholders
                  
                  
                  (332
                  )
                  
                  
                  (332
                  )
                  
                  
                  -Repayments
                      under bank loans
                  
                  
                  (236
                  )
                  
                  
                  (4,118
                  )
                  
                  
                  (557
                  )Net
                      cash used in financing activities
                  
                  
                  (568
                  )
                  
                  
                  (4,450
                  )
                  
                  
                  (557
                  )Effect
                      of exchange rate on cash and cash equivalents
                  
                  
                  36
                  
                  
                  
                  (6
                  )
                  
                  
                  (162
                  )Net
                      (decrease) increase in cash and cash equivalents
                  
                  
                  (161
                  )
                  
                  
                  614
                  
                  
                  
                  (377
                  )Cash
                      and cash equivalents, beginning of period
                  
                  
                  769
                  
                  
                  
                  801
                  
                  
                  
                  920Cash
                      and cash equivalents, end of period
                  
                  $
                  608
                  
                  
                  $
                  1,415
                  
                  
                  $
                  543Supplemental
                      disclosureInterest
                      paid
                  
                  $
                  96
                  
                  
                  $
                  101
                  
                  
                  $
                  45Income
                      tax paid
                  
                  
                  280
                  
                  
                  
                  -
                  
                  
                  
                  14
  *The
          accompanying notes are an integral part of these financial
          statements.*
 
 F-16
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(**
 1.  DESCRIPTION
        OF
        BUSINESS
 
 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 concluded its offering in April 2000.  The objective of the Fund
        is to provide benefits to its shareholders through a combination of
        distributions of operating cash flow and capital appreciation.  The
        Managing Shareholders of the Fund are Ridgewood Renewable Power LLC (“RRP”) and
        Ridgewood Power VI LLC (“Power VI”) (collectively, the “Managing
        Shareholder”).  Effective January 1, 2001, Power VI assigned and
        delegated all of its rights and responsibilities to RRP and since that time
        has
        been an entity with only nominal activity.
 
 The
        Fund
        has been organized to invest primarily in independent power generation
        facilities, water desalinization plants and other infrastructure projects
        both
        in the US and abroad.  The projects to be owned by the Fund may have
        characteristics that qualify the projects for government
        incentives.  Among the possible incentives are ancillary revenue
        opportunities related to the fuel used by the power plants or tax incentives
        provided to projects in remote locations.
 
 The
        Fund’s accompanying consolidated financial statements includes the financial
        statements of Ridgewood US Hydro Corporation (“US Hydro”) and Ridgewood Near
        East Holding LLC (“NEH”).  The Fund’s consolidated financial
        statements also includes the Fund’s 30.4% interest in Ridgewood UK (“RUK”) which
        is accounted for under the equity method of accounting as the Fund has the
        ability to exercise significant influence but does not control the operating
        and
        financial policies of RUK.
 
 The
        Fund
        owns 70.8% interest in US Hydro and the remaining 29.2% minority interest
        is
        owned by Ridgewood Electric Power Trust V (“Trust V”).  In addition,
        the Fund owns a 68.1% interest in NEH and the remaining minority interest
        is
        owned by Trust V (14.1%) and Ridgewood Egypt Fund (“Egypt Fund”)
        (17.8%).  The interests of Trust V and Egypt Fund are presented as
        minority interest in the consolidated balance sheets and statements of
        operations.
 
 The
        Managing Shareholder performs (or arranges for the performance of) the operation
        and maintenance of the projects owned by the Fund and the management and
        administrative services required for Fund operations. Among other services,
        the
        Managing Shareholder administers the accounts and handles relations with
        the
        shareholders, including tax and other financial information. The Managing
        Shareholder also provides the Fund with office space, equipment and facilities
        and other services necessary for its operation.
 
 
 **2.  RESTATEMENT
        OF FINANCIAL STATEMENTS**
 
 The
        Fund
        has identified a series of adjustments including
        the purchase accounting for US Hydro projects, impairment of long-lived assets,
        waiver of management fees payable to the Managing Shareholder of the Fund
        and
        accounting for professional services, which have resulted in the
        restatement of the previously issued financial statements for the quarters
        ended
        March 31, June 30 and September 30, of 2005, 2004 and 2003, and for the years
        ended December 31, 2004 and 2003.
 
 The
        tables below present the changes in financial statement line items between
        the
        Fund’s previously reported and restated balance sheets, statements of operations
        and cash flows.  Explanatory comments follow the tables.
  F-17
 
 **Balance
                    Sheets**
                
                December
                    31,2004
                
                
                2003ASSETSAccounts
                    receivable, net of allowance
                
                $
                (119
                )
                
                $
                10
                
                (C)Due
                    from affiliates
                
                
                (518
                )
                
                
                (577
                )
                (B)(K)(P)Deferred
                    income taxes - current portion
                
                
                443
                
                
                
                (55
                )
                (D)(P)Prepaid
                    expenses and other current assets
                
                
                -
                
                
                
                (16
                )
                (M)(P)Investments
                
                
                156
                
                
                
                515
                
                (A)(B)Property,
                    plant and equipment, net
                
                
                (507
                )
                
                
                (481
                )
                (D)(E)(F)(L)Goodwill
                
                
                (4,265
                )
                
                
                (4,926
                )
                (D)(F)Intangibles,
                    net
                
                
                (5,605
                )
                
                
                (5,228
                )
                (D)(E)(F)(G)Other
                    assets
                
                
                -
                
                
                
                (6
                )
                (P)Total
                
                $
                (10,415
                )
                
                $
                (10,764
                )LIABILITES
                    AND SHAREHOLDERS' EQUITYAccounts
                    payable
                
                $
                (1
                )
                
                $
                (54
                )
                (P)Accrued
                    expenses
                
                
                42
                
                
                
                (192
                )
                (H)(N)(O)(P)Due
                    to affiliates
                
                
                -
                
                
                
                4
                
                (P)Deferred
                    rent
                
                
                (259
                )
                
                
                (135
                )
                (P)Other
                    liabilities
                
                
                259
                
                
                
                135
                
                (P)Deferred
                    income taxes, net
                
                
                (1,891
                )
                
                
                (2,243
                )
                (D)(P)Minority
                    interest
                
                
                (2,588
                )
                
                
                (2,582
                )
                (C)(D)(E)(F)(G)(H)(K)(L)(M)(N)(O)Shareholders’
                    equity
                
                
                (5,977
                )
                
                
                (5,697
                )Total
                
                $
                (10,415
                )
                
                $
                (10,764
                )Years
                    ended December 31,**Statement
                    of Operations**
                
                2004
                
                
                2003Cost
                    of revenues, increase
                
                $
                (172
                )
                
                $
                (296
                )
                (E)(L)(P)General
                    and administrative expenses, increase
                
                
                (359
                )
                
                
                (1,033
                )
                (C)(H)(K)(L)(N)(O)(P)Management
                    fee to the Managing Shareholder, increase
                
                
                (822
                )
                
                
                (822
                )
                (I)Write-down
                    of Notes receivable, increase
                
                
                -
                
                
                
                (3,411
                )
                (G)Impairment
                    of Goodwill, decrase (increase)
                
                
                661
                
                
                
                (5,877
                )
                (F)Impairment
                    of plant, property and equipment, (increase) decrease
                
                
                (640
                )
                
                
                1,694
                
                (F)(J)(L)(P)Impairment
                    of intangibles, increase
                
                
                (22
                )
                
                
                (1,918
                )
                (F)(P)Provision
                    for bad debts, decrease
                
                
                42
                
                
                
                536
                
                (P)Loss
                    from operations (increase)
                
                
                (1,312
                )
                
                
                (11,127
                )Interest
                    expense, increase
                
                
                (187
                )
                
                
                (131
                )
                (I)Equity
                    in loss from RUK, (increase) decrease
                
                
                (146
                )
                
                
                17
                
                (B)Loss
                    on distribution and sale of investment in ZAP securities,
                    increase
                
                
                (308
                )
                
                
                (43
                )
                (A)Gain
                    on termination of electric power sales contract, increase
                
                
                380
                
                
                
                -
                
                (G)(P)Gain
                    on sale of US Hydro note, decrease
                
                
                (175
                )
                
                
                -
                
                (P)Loss
                    on sale of equipment, (increase) decrease
                
                
                (6
                )
                
                
                500
                
                (P)Other
                    expenses, net, decrease (increase)
                
                
                215
                
                
                
                (500
                )
                (C)(M)(P)Income
                    tax benefit, increase
                
                
                145
                
                
                
                1,455
                
                (D)Minority
                    interest in the loss of subsidiaries, increase
                
                
                2
                
                
                
                2,593
                
                (C)(D)(E)(F)(G)(H)(J)(K)(L)(M)(N)(O)Net
                    loss, (increase)
                
                $
                (1,392
                )
                
                $
                (7,236
                )Managing
                    Shareholder - Net  loss
                
                $
                (14
                )
                
                $
                (72
                )Shareholders
                    - Net loss
                
                $
                (1,378
                )
                
                $
                (7,164
                )Net
                    loss per Investor Share
                
                $
                (2
                )
                
                $
                (11
                )**Cash
                    Flows**
                
                Years
                    ended December 31,2004
                
                
                2003Cash
                    used in operating activities
                
                $
                (63
                )
                
                $
                (45
                )Cash
                    provided by investing activities
                
                
                815
                
                
                
                45Cash
                    used in financing activities
                
                
                (750
                )
                
                
                -Effect
                    of exchange rate on cash and cash equivalents
                
                
                (2
                )
                
                
                -
 (A)
              Originally,
                  the Fund did not properly record the value of ZAP shares and warrants
                  received in connection with the bankruptcy reorganization of ZAP
                  in
                  exchange for a loan receivable from ZAP held by the Fund.  The
                  loan receivable from ZAP had been previously written off prior
                  to the time
                  of the bankruptcy of ZAP and, therefore, the Fund should have,
                  at the time
                  of receipt in 2002, taken the value of the securities received
                  into income
                  to the extent of the lesser of the original basis in the loan receivable
                  on the books of the Fund and the fair market value of the securities
                  received.  As a result, in 2004 the Fund recorded an adjustment
                  by increasing investment in ZAP, loss on distribution and sale
                  of ZAP
                  securities and shareholders’ equity by $341, $308 and $649,
                  respectively.  In 2003, the Fund recorded an adjustment by
                  increasing investment in ZAP, loss on sale and distribution of
                  ZAP
                  securities and shareholders’ equity by $538, $42 and $580,
                  respectively.
  F-18
  (B)
              The
                  Fund did not properly recognize its minority investment in RUK
                  due to
                  differences between generally accepted accounting principles in
                  the United
                  States (“US GAAP”) and those of the United Kingdom (“UK GAAP”),
                  recognition of impairment and corrections of errors in the timing
                  of
                  certain income and expense items for the years ended December 31,
                  2004 and
                  2003.  The differences include the capitalization and
                  amortization of construction period interest under US GAAP versus
                  the
                  expensing of such interest under UK GAAP. In addition, certain
                  assets
                  characterized as goodwill under UK GAAP will be characterized as
                  intangible assets under US GAAP and are, therefore, also subject
                  to
                  amortization but at a different rate.  As a result, in 2004 the
                  Fund decreased the investment in RUK, equity in gain from RUK and
                  cumulative translation adjustment (“CTA”) by $185, $146 and $4,
                  respectively, and increased due from affiliates and shareholders’ equity
                  by $45 and $8, respectively.  In 2003, the Fund decreased
                  investment in RUK, equity in loss from RUK and beginning shareholders’
                  equity by $23, $17 and $14, respectively, and increased due from
                  affiliates and CTA by $31 and $5,
                  respectively.
 
 (C)
              NEH
                  previously did not record the provision and the recovery of bad
                  debts in
                  the correct period.  As a result, in 2004 the Fund recorded an
                  adjustment to decrease accounts receivable, CTA and minority interest
                  by
                  $119, $2 and $38, respectively, and to increase general and administrative
                  expenses, other income, minority interest in loss of consolidated
                  subsidiaries and shareholders’ equity by $138, $11, $40 and $6,
                  respectively.  In 2003, NEH recorded an adjustment to increase
                  accounts receivable, minority interest and CTA by $10, $3 and $13,
                  respectively, and to decrease general and administrative expenses,
                  minority interest in the earnings of consolidated subsidiaries and
                  beginning shareholders’ equity by $80, $26 and $60,
                  respectively.
 
 (D)
              The
                  Fund changed the valuation of the assets acquired in the US Hydro
                  acquisition.  Previously, the Fund valued acquired intangibles
                  for one of the projects based on the term of the related power
                  purchase
                  agreement instead of the shorter term of the related ground lease
                  for the
                  project.  The Fund also changed the valuations used previously
                  to record the allocation of the purchase price among the assets
                  of US
                  Hydro.  In addition, in 2003, the Fund recorded an impairment of
                  goodwill resulting from not exercising the Internal Revenue Code
                  (“IRC”)
                  Section 338 (h) 10 election and also recorded impairment of notes
                  receivable resulted from the negotiated settlement with Truckee-Carson
                  Irrigation District (“TCID”).  As a result in 2004, the Fund
                  increased goodwill, deferred tax assets, minority interest, shareholders’
                  equity, and income tax benefit by $952, $2,334, $468, $1,030 and
                  $146,
                  respectively, and decreased property, plant and equipment, intangibles,
                  and minority interest in loss of consolidated subsidiaries by $173,
                  $4,923, and $43, respectively.  In 2003, the Fund decreased
                  property, plant and equipment, minority interest in loss of consolidated
                  subsidiaries and intangibles by $173, $425 and $4,923, respectively,
                  and
                  increased notes receivable, goodwill, deferred tax assets, minority
                  interest and income tax benefit by $3,411, $952, $2,188, $425 and
                  $1,455,
                  respectively.  In addition, the Fund presented the net of
                  deferred tax assets (liabilities) by offsetting non-current deferred
                  tax
                  assets and liabilities of $1,891 and $2,243 in 2004 and 2003,
                  respectively.
 
 (E)
              The
                  Fund changed the lives of certain electric power sales contracts
                  based on
                  the shorter term of the related ground lease of the project which
                  resulted
                  in increases in 2004 depreciation and amortization expense included
                  in
                  cost of revenues, minority interest in loss of consolidated subsidiaries
                  and accumulated amortization by $162, $47 and $460, respectively,
                  and
                  decreased accumulated depreciation, shareholders’ equity and minority
                  interest by $14, $201 and $130, respectively.  In 2003, the Fund
                  increased cost of revenues, minority interest in loss of consolidated
                  subsidiaries and accumulated amortization by $199, $58 and $289,
                  respectively, and decreased beginning shareholders’ equity, minority
                  interest and accumulated depreciation by $60, $83 and $5,
                  respectively.
  
 F-19
  (F)
              Due
                  to the changes made in the purchase accounting, as stated in ‘D’ above,
                  the Fund recognized additional impairment losses for the years
                  ended
                  December 31, 2004 and 2003.    As a result, in 2004
                  the adjustments decreased property, plant and equipment, goodwill,
                  intangibles, shareholders’ equity, impairment of goodwill, minority
                  interest and minority interest in loss of consolidated subsidiaries
                  by
                  $264, $5,216, $37, $4,305, $661, $1,611 and $165, respectively,
                  and
                  increased impairment loss of property, plant and equipment and
                  intangibles
                  by $75 and $22, respectively.  In 2003, the Fund increased
                  impairment loss and minority interest in loss of consolidated subsidiaries
                  by $6,081 and $1,776, respectively, and decreased property, plant
                  and
                  equipment, intangibles, goodwill and minority interest by $189,
                  $15,
                  $5,877 and $1,776, respectively.
 
 (G)
              Originally,
                  the Fund did not correctly record the gain from the termination
                  of an
                  agreement between its Blackstone Project and New England
                  Utility.  As a result, in 2004 the Fund recorded an adjustment
                  by decreasing intangibles, minority interest and gain from termination
                  of
                  the Blackstone project by $163, $54 and $184, respectively, and
                  increased
                  accumulated amortization and minority interest in loss of consolidated
                  subsidiaries by $21 and $54, respectively.  In 2003, the Fund
                  did not record the notes receivable from the Lahontan project correctly
                  which resulted in increasing its write-down of notes receivable
                  and
                  minority interest in loss of consolidated subsidiaries by $3,411
                  and $996,
                  respectively, and decreasing notes receivable and minority
                  interest  by $3,411 and $996,
                  respectively.
 
 (H)
              In
                  the previously issued financial statements, the Fund accrued professional
                  service fees in the period to be audited or reviewed rather than
                  during
                  the period in which the services were performed. The Fund has concluded
                  that such treatment is not in accordance with US GAAP. As a result,
                  the
                  Fund overaccrued $79 and $53 of professional fees for the years
                  ended
                  December 31, 2004 and 2003, respectively.  The 2004 overaccrual
                  was adjusted by recording a decrease to accrued expenses and general
                  and
                  administrative expenses of $79 and $25, respectively, and increased
                  minority interest, beginning shareholders’ equity and minority interest in
                  loss of consolidated subsidiaries of $20, $27 and $6,
                  respectively.  The 2003 overaccrual was adjusted by recording as
                  a decrease to accrued expenses, general and administrative expenses
                  and
                  minority interest in loss of consolidated subsidiaries of $53,
                  $40 and
                  $22, respectively, and increased beginning shareholders’ equity and
                  minority interest of $8 and $27,
                  respectively.
 
 (I)
              Originally,
                  the Fund did not properly record the accrual, waiver and forgiveness
                  of
                  management fees (including the associated interest thereon) due
                  by the
                  Fund to the Managing Shareholder of the Fund. The Fund treated
                  the waiver
                  of management fees as a direct offset against the management fee
                  expense
                  in the period in which the waiver took place so that neither the
                  fee nor
                  the waiver appeared in the consolidated statement of operations
                  of the
                  Fund.  The Fund made the adjustment by recording an accrual of
                  the management fee expense in the period to which the accrual applies
                  and
                  any waiver or forgiveness treated as a capital contribution to
                  the Fund by
                  the Managing Shareholder.  The contribution of the Managing
                  Shareholder was also reallocated to the shareholders of the Fund
                  in such a
                  way as to keep the capital accounts of the shareholders in the
                  Fund in the
                  same relationship to each other as they had been prior to the contribution
                  of the management fee by the Managing Shareholder.  In 2004, the
                  Fund recorded this adjustment by increasing management fees paid
                  to the
                  Managing Shareholder, interest expense and beginning shareholders’ equity
                  by $822, $187 and $1,009, respectively.  In 2003, the Fund
                  recorded an adjustment by increasing management fee paid to the
                  managing
                  shareholder, interest expense and beginning shareholders’ equity by $822,
                  $131 and $954, respectively.
  F-20
  (J)
                The Fund did not recognize impairment of NEH
                  equipment in
                  the proper period.  As a result, in 2003 the Fund decreased
                  beginning shareholders’ equity, impairment of property, plant and
                  equipment and minority interest in the earnings of consolidated subsidiaries by
                  $29, $34 and $11, respectively, and increased CTA by
                  $6.
 (K)
              The
                  Fund originally recorded disbursements made to Ridgewood Dubai
                  (“Dubai”)
                  in 2003 and the prior year as intercompany advances instead of
                  general and
                  administrative expenses.  In 2004, the Fund had originally
                  expensed all the prior disbursements made to Dubai in current and
                  prior
                  periods.  Consequently, the Fund believes it is more appropriate
                  to record the advances as general and administrative expenses in
                  the year
                  disbursed due to the high-risk of non-recoverability in the future.
                  An adjustment was recorded in 2004 to decrease general and administrative
                  expenses, minority interest in loss of consolidated subsidiaries,
                  due from
                  affiliates, minority interest, beginning shareholders’ equity and CTA by
                  $55, $17, $561, $180, $416 and $3, respectively.  In 2003, the
                  Fund increased general and administrative expenses, minority interest
                  in
                  loss of consolidated subsidiaries and CTA by $589, $189 and $28,
                  respectively, and decreased due from affiliates, minority interest
                  and
                  beginning shareholders’ equity by $613, $197 and $44,
                  respectively.
 
 (L)
              The
                  Fund failed to record depreciation and impairment loss certain
                  NEH assets
                  in the correct period.  In 2004, the Fund recorded the
                  adjustment by increasing cost of revenues by $10 and decreasing
                  beginning
                  shareholders’ equity, minority interest, general and administrative
                  expenses, minority interest in loss of consolidated subsidiaries
                  and
                  property, plant and equipment by $84, $27, $51, $13 and $84,
                  respectively.  In 2003, the Fund recorded the adjustment by
                  increasing cost of revenues, write-down of equipment, minority
                  interest in
                  loss of consolidated subsidiaries and CTA by $53, $54, $34 and
                  $8,
                  respectively, and decreasing beginning shareholders’ equity, minority
                  interest and property, plant and equipment by $20, $40 and $124,
                  respectively.
 
 (M)
              The
                  Fund did not record the write-off of prepaid expense relating to
                  NEH in
                  the correct period.  As a result, in 2004 the Fund recorded an
                  increase in other income and minority interest in income of consolidated
                  subsidiaries of $22 and $7, respectively, and a decrease in beginning
                  shareholders’ equity of $15.  In 2003, the Fund recorded a
                  decrease in other current assets, minority interest and beginning
                  shareholders’ equity of $22, $7 and $20, respectively, and to increase CTA
                  by $5.
 
 (N)
              The
                  Fund failed to record certain NEH expenses in the correct
                  period.  The 2004 adjustments resulted in increased accrued
                  expenses, general and administrative expenses and minority interest
                  in
                  the Loss of consolidated subsidiaries by $33, $14 and $4,
                  respectively, and decreased beginning shareholders’ equity and minority
                  interest by $18 and $4, respectively.  In 2003, the Fund
                  increased accrued expenses and CTA by $18 and $4, respectively,
                  and
                  decreased beginning shareholders’ equity and minority interest by $16 and
                  $6, respectively.
 
 (O)
              To
                  correct the timing of an accrual for operating expenses of NEH,
                  the Fund
                  recorded an increase in accrued expenses, beginning shareholders
                  equity,
                  general and administrative expenses and minority interest in loss
                  of
                  consolidated subsidiaries of $88, $143, $295 and $94, respectively,
                  and a
                  decrease in minority interest and CTA of $28 and $2, respectively,
                  for the
                  year ended December 31, 2004.  The Fund also recorded an
                  adjustment to increase general and administrative expense, minority
                  interest in loss of consolidated subsidiaries, beginning shareholders’
                  equity and minority interest by $72, $23, $251 and $67, respectively,
                  and
                  to decrease accrued expenses and CTA by $210 and $60, respectively,
                  for
                  the year ended December 31, 2003.
 
 (P)
              Certain
                  items in the previously issued financial statements for the years
                  ended
                  December 31, 2004 and 2003 have been reclassified to conform to the
                  current year presentation. These reclassifications had no effect
                  on net
                  income (loss).
 
 F-21
  The
        Fund
        restated prior amounts by decreasing equity as of January 1, 2003 by $531. 
The following is the summary of adjustments recorded to shareholders’ equity as
        of January 1, 2003: (a) overstatement of investments in RUK of $14, (b)
        understatement of the value of shares and warrants of ZAP of $535, (c)
        overaccrual of the accounting fee of $8, (d) understatement of depreciation
        and
        amortization related to the US Hydro acquisition of $60, (e) understatement
        of
        retained earnings related to NEH of $62.
  **Quarterly
                    Balance Sheets  (unaudited)**
                
                2005September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETSAccounts
                    receivable, net of allowance
                
                $
                (139
                )
                
                $
                (138
                )
                
                $
                (139
                )
                (C)Due
                    from affiliates
                
                
                57
                
                
                
                48
                
                
                
                48
                
                (B)(G)(K)Deferred
                    income taxes - current portion
                
                
                340
                
                
                
                310
                
                
                
                386
                
                (D)Prepaid
                    expenses and other current assets
                
                
                12
                
                
                
                12
                
                
                
                12
                
                (F)Investments
                
                
                (184
                )
                
                
                (29
                )
                
                
                93
                
                (A)(B)Property,
                    plant and equipment, net
                
                
                (484
                )
                
                
                (485
                )
                
                
                533
                
                (D)(E)(K)Goodwill
                
                
                (4,265
                )
                
                
                (4,265
                )
                
                
                (4,265
                )
                (D)Intangibles,
                    net
                
                
                (5,748
                )
                
                
                (5,700
                )
                
                
                (5,653
                )
                (D)Deposits
                
                
                -
                
                
                
                -
                
                
                
                (1,022
                )
                (K)Total
                
                $
                (10,411
                )
                
                $
                (10,247
                )
                
                $
                (10,007
                )LIABILITIES
                    AND
                    SHAREHOLDERS' EQUITYAccrued
                    expenses
                
                $
                (68
                )
                
                $
                22
                
                
                $
                (105
                )
                (D)(I)(J)Due
                    to affiliates
                
                
                1,429
                
                
                
                930
                
                
                
                459
                
                (H)(K)Long-term
                    debt - current portion
                
                
                (84
                )
                
                
                (133
                )
                
                
                2,097
                
                (K)Long-term
                    debt - non current portion
                
                
                143
                
                
                
                147
                
                
                
                (2,097
                )
                (J)(K)Other
                    liabilities
                
                
                356
                
                
                
                329
                
                
                
                287
                
                (J)(K)Deferred
                    rent
                
                
                (341
                )
                
                
                (314
                )
                
                
                (287
                )
                (K)Deferred
                    income taxes, net
                
                
                (1,767
                )
                
                
                (1,888
                )
                
                
                (1,879
                )
                (D)Minority
                    interest
                
                
                (2,456
                )
                
                
                (2,436
                )
                
                
                (2,387
                )
                (C)(D)(E)(F)(G)(I)(J)Shareholders’
                    equity
                
                
                (7,623
                )
                
                
                (6,904
                )
                
                
                (6,095
                )Total
                
                $
                (10,411
                )
                
                $
                (10,247
                )
                
                $
                (10,007
                )**Quarterly
                    Balance Sheets  (unaudited)**
                
                2004September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETSAccounts
                    receivable, net of allowance
                
                $
                21
                
                
                $
                21
                
                
                $
                10
                
                (C)Due
                    from affiliates
                
                
                (1,123
                )
                
                
                (840
                )
                
                
                (687
                )
                (B)(G)Prepaid
                    expenses and other current assets
                
                
                (21
                )
                
                
                (22
                )
                
                
                (22
                )
                (F)Investments
                
                
                8
                
                
                
                689
                
                
                
                582
                
                (A)(B)Property,
                    plant and equipment, net
                
                
                (509
                )
                
                
                (498
                )
                
                
                (489
                )
                (D)(E)Goodwill
                
                
                (4,926
                )
                
                
                (4,926
                )
                
                
                (4,926
                )
                (D)Intangibles,
                    net
                
                
                (5,353
                )
                
                
                (5,311
                )
                
                
                (5,269
                )
                (D)Total
                
                $
                (11,903
                )
                
                $
                (10,887
                )
                
                $
                (10,801
                )LIABILITIES
                    AND SHAREHOLDERS' EQUITYAccrued
                    expenses
                
                $
                212
                
                
                $
                10
                
                
                $
                (64
                )
                (D)(I)(J)Due
                    to affiliates
                
                
                537
                
                
                
                75
                
                
                
                35
                
                (H)Long-term
                    debt - current portion
                
                
                2,122
                
                
                
                2,225
                
                
                
                2,260
                
                (K)Long-term
                    debt - non current portion
                
                
                (2,122
                )
                
                
                (2,225
                )
                
                
                (2,260
                )
                (K)Other
                    liabilities
                
                
                228
                
                
                
                197
                
                
                
                166
                
                (K)Deferred
                    rent
                
                
                (228
                )
                
                
                (197
                )
                
                
                (166
                )
                (K)Deferred
                    income taxes, net
                
                
                (2,542
                )
                
                
                (2,662
                )
                
                
                (2,400
                )
                (D)Minority
                    interest
                
                
                (2,842
                )
                
                
                (2,628
                )
                
                
                (2,616
                )
                (C)(D)(E)(F)(G)(I)(J)Shareholders’
                    equity
                
                
                (7,268
                )
                
                
                (5,682
                )
                
                
                (5,756
                )Total
                
                $
                (11,903
                )
                
                $
                (10,887
                )
                
                $
                (10,801
                )
 F-22
 
 **Quarterly
                    Balance Sheets  (unaudited)**
                
                2003September
                    30
                
                
                June
                    30
                
                
                March
                    31ASSETSAccounts
                    receivable, net of allowance
                
                $
                (42
                )
                
                $
                (68
                )
                
                $
                (72
                )
                (C)Due
                    from affiliates
                
                
                (224
                )
                
                
                147
                
                
                
                67
                
                (B)(G)(K)Deferred
                    income taxes - current portion
                
                
                215
                
                
                
                381
                
                
                
                134
                
                (D)Inventory
                
                
                318
                
                
                
                275
                
                
                
                263
                
                (K)Prepaid
                    expenses and other current assets
                
                
                (318
                )
                
                
                (275
                )
                
                
                (263
                )
                (K)Investments
                
                
                1,042
                
                
                
                775
                
                
                
                513
                
                (A)(B)Note
                    receivable - noncurrent portion
                
                
                (2,749
                )
                
                
                (2,750
                )
                
                
                (2,750
                )
                (D)Property,
                    plant and equipment, net
                
                
                (236
                )
                
                
                (218
                )
                
                
                (208
                )
                (D)(E)Goodwill
                
                
                227
                
                
                
                2,732
                
                
                
                2,732
                
                (D)Intangibles,
                    net
                
                
                (3,049
                )
                
                
                (2,716
                )
                
                
                (2,436
                )
                (D)Deferred
                    income tax assets
                
                
                -
                
                
                
                1,184
                
                
                
                1,184
                
                (K)Other
                    assets
                
                
                (54
                )
                
                
                (55
                )
                
                
                (58
                )
                (F)Total
                
                $
                (4,870
                )
                
                $
                (588
                )
                
                $
                (894
                )LIABILITES
                    AND
                    SHAREHOLDERS' EQUITYAccounts
                    payable
                
                $
                (226
                )
                
                $
                (222
                )
                
                $
                (262
                )
                (K)Accrued
                    expenses
                
                
                93
                
                
                
                1,242
                
                
                
                1,287
                
                (D)(I)(J)(K)Due
                    to affiliates
                
                
                598
                
                
                
                498
                
                
                
                208
                
                (H)(K)Long-term
                    debt - current portion
                
                
                3,089
                
                
                
                3,597
                
                
                
                3,861
                
                (K)Long-term
                    debt - noncurrent
                    portion
                
                
                (3,089
                )
                
                
                (3,597
                )
                
                
                (3,861
                )
                (K)Deferred
                    income tax, net
                
                
                3,104
                
                
                
                -
                
                
                
                -
                
                (D)Minority
                    interest
                
                
                (2,674
                )
                
                
                (774
                )
                
                
                (748
                )
                (C)(D)(E)(F)(G)(I)(J)(K)Shareholders’
                    equity
                
                
                (5,765
                )
                
                
                (1,332
                )
                
                
                (1,379
                )Total
                
                $
                (4,870
                )
                
                $
                (588
                )
                
                $
                (894
                )
  **Quarterly
                    Statement of Operations (Unaudited)**Nine
                    Months Ended September 30,
                
                
                Three
                    Months Ended September 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003Cost
                    of revenues, increase
                
                $
                (116
                )
                
                $
                (156
                )
                
                $
                (836
                )
                
                $
                (45
                )
                
                $
                (52
                )
                
                $
                (300
                )
                (D)(E)General
                    and administrative expenses, (increase) decrease
                
                
                (13
                )
                
                
                (929
                )
                
                
                (373
                )
                
                
                39
                
                
                
                (480
                )
                
                
                23
                
                (C)(G)(I)(J)(K)Management
                    fee to the Managing Shareholder, increase
                
                
                (1,234
                )
                
                
                (411
                )
                
                
                (548
                )
                
                
                (411
                )
                
                
                (411
                )
                
                
                (411
                )
                (H)Write-down
                    of Notes receivable, increase
                
                
                -
                
                
                
                -
                
                
                
                (3,411
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                (D)Impairment
                    of goodwill, increase
                
                
                -
                
                
                
                -
                
                
                
                (6,433
                )
                
                
                -
                
                
                
                -
                
                
                
                (6,433
                )
                (D)Provision
                    for bad debts, decrease
                
                
                -
                
                
                
                -
                
                
                
                146
                
                
                
                -
                
                
                
                -
                
                
                
                (5
                )
                (K)Loss
                    from operations
                
                
                (1,363
                )
                
                
                (1,496
                )
                
                
                (11,455
                )
                
                
                (417
                )
                
                
                (943
                )
                
                
                (7,126
                )Interest
                    expense, increase
                
                
                (252
                )
                
                
                (125
                )
                
                
                (84
                )
                
                
                (114
                )
                
                
                (49
                )
                
                
                (37
                )
                (H)(J)Equity
                    in loss of RUK, (increase) decrease
                
                
                (167
                )
                
                
                (82
                )
                
                
                27
                
                
                
                (138
                )
                
                
                (4
                )
                
                
                82
                
                (B)Loss
                    on sale of investment in ZAP securities, (increase)
                    decrease
                
                
                (13
                )
                
                
                (295
                )
                
                
                76
                
                
                
                (8
                )
                
                
                (116
                )
                
                
                76
                
                (A)(K)Gain
                    on sale of US Hydro note, decrease
                
                
                -
                
                
                
                (175
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                (K)Loss
                    on sale of equipment, increase
                
                
                (5
                )
                
                
                (6
                )
                
                
                -
                
                
                
                -
                
                
                
                (16
                )
                
                
                (579
                )
                (K)Loss
                    on sale of investment, decrease
                
                
                -
                
                
                
                -
                
                
                
                562
                
                
                
                -
                
                
                
                -
                
                
                
                562
                
                (K)Other
                    income (expense), net, increase (decrease)
                
                
                605
                
                
                
                192
                
                
                
                (680
                )
                
                
                2
                
                
                
                17
                
                
                
                (100
                )
                (C)(G)(K)Income
                    tax (expense) benefit, increase (decrease)
                
                
                (126
                )
                
                
                266
                
                
                
                2,022
                
                
                
                (50
                )
                
                
                (131
                )
                
                
                555
                
                (D)Minority
                    interest in the loss (earnings) of subsidiaries
                
                
                (147
                )
                
                
                263
                
                
                
                2,582
                
                
                
                15
                
                
                
                214
                
                
                
                1,800
                
                (C)(D)(E)(G)(I)(J)Net
                    loss increase
                
                $
                (1,468
                )
                
                $
                (1,458
                )
                
                $
                (6,950
                )
                
                $
                (710
                )
                
                $
                (1,028
                )
                
                $
                (4,767
                )Managing
                    Shareholder - Net  loss
                
                $
                (15
                )
                
                $
                (15
                )
                
                $
                (69
                )
                
                $
                (7
                )
                
                $
                (10
                )
                
                $
                (48
                )Shareholders
                    - Net loss
                
                $
                (1,453
                )
                
                $
                (1,443
                )
                
                $
                (6,881
                )
                
                $
                (703
                )
                
                $
                (1,018
                )
                
                $
                (4,719
                )Net
                    loss per Investor Share
                
                $
                (2
                )
                
                $
                (2
                )
                
                $
                (10
                )
                
                $
                (1
                )
                
                $
                (2
                )
                
                $
                (7
                )
  F-23
 
 **Quarterly
                    Statement of Operations (Unaudited)**Six
                    Months Ended June 30,
                
                
                Three
                    Months Ended June 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003Cost
                    of revenues, increase
                
                $
                (71
                )
                
                $
                (104
                )
                
                $
                (536
                )
                
                $
                (44
                )
                
                $
                (52
                )
                
                $
                (267
                )
                (D)(E)General
                    and administrative expenses, increase
                
                
                (52
                )
                
                
                (449
                )
                
                
                (395
                )
                
                
                (130
                )
                
                
                (213
                )
                
                
                (31
                )
                (C)(G)(I)(J)(K)Management
                    fee to the Managing Shareholder, increase
                
                
                (823
                )
                
                
                -
                
                
                
                (137
                )
                
                
                (411
                )
                
                
                -
                
                
                
                (136
                )
                (H)Write-down
                    of Notes receivable (increase)
                
                
                -
                
                
                
                -
                
                
                
                (3,411
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                (D)Provision
                    for bad debts, decrease
                
                
                -
                
                
                
                -
                
                
                
                151
                
                
                
                -
                
                
                
                -
                
                
                
                (9
                )
                (K)Loss
                    from operations
                
                
                (946
                )
                
                
                (553
                )
                
                
                (4,328
                )
                
                
                (585
                )
                
                
                (265
                )
                
                
                (443
                )Interest
                    expense, increase
                
                
                (137
                )
                
                
                (76
                )
                
                
                (47
                )
                
                
                (89
                )
                
                
                (41
                )
                
                
                (29
                )
                (H)(J)Equity
                    in loss of RUK, increase
                
                
                (29
                )
                
                
                (78
                )
                
                
                (55
                )
                
                
                (8
                )
                
                
                (124
                )
                
                
                (73
                )
                (B)Loss
                    on sale of investment in ZAP securities, increase
                
                
                (5
                )
                
                
                (179
                )
                
                
                -
                
                
                
                (2
                )
                
                
                (179
                )
                
                
                -
                
                (A)(K)Gain
                    on sale of US Hydro note, decrease
                
                
                -
                
                
                
                (175
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                (K)(Loss)
                    gain on sale of equipment
                
                
                (5
                )
                
                
                10
                
                
                
                579
                
                
                
                (5
                )
                
                
                10
                
                
                
                579
                
                (K)Other
                    income (expense), net, increase (decrease)
                
                
                603
                
                
                
                176
                
                
                
                (579
                )
                
                
                8
                
                
                
                2
                
                
                
                (579
                )
                (C)(G)(K)Income
                    tax (expense) benefit, (decrease)  increase
                
                
                (76
                )
                
                
                397
                
                
                
                1,467
                
                
                
                (67
                )
                
                
                238
                
                
                
                230
                
                (D)Minority
                    interest in the (earnings) loss of subsidiaries
                
                
                (162
                )
                
                
                49
                
                
                
                781
                
                
                
                51
                
                
                
                14
                
                
                
                25
                
                (C)(D)(E)(G)(I)(J)Net
                    loss increase
                
                $
                (757
                )
                
                $
                (429
                )
                
                $
                (2,182
                )
                
                $
                (697
                )
                
                $
                (345
                )
                
                $
                (290
                )Managing
                    Shareholder - Net  loss
                
                $
                (8
                )
                
                $
                (4
                )
                
                $
                (22
                )
                
                $
                (7
                )
                
                $
                (3
                )
                
                $
                (3
                )Shareholders
                    - Net loss
                
                $
                (749
                )
                
                $
                (425
                )
                
                $
                (2,160
                )
                
                $
                (690
                )
                
                $
                (342
                )
                
                $
                (287
                )Net
                    loss per Investor Share
                
                $
                (1
                )
                
                $
                (1
                )
                
                $
                (3
                )
                
                $
                (1
                )
                
                $
                (1
                )
                
                $
                -
  **Quarterly
                    Statement of Operations (Unaudited)**Three
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003Cost
                    of revenues, increase
                
                $
                (26
                )
                
                $
                (52
                )
                
                $
                (269
                )
                (D)(E)General
                    and administrative expenses, increase
                
                
                79
                
                
                
                (237
                )
                
                
                (365
                )
                (C)(G)(I)(J)(K)Management
                    fee to the Managing Shareholder,  increase
                
                
                (411
                )
                
                
                -
                
                
                
                -
                
                (H)Write-down
                    of Notes receivable, increase
                
                
                -
                
                
                
                -
                
                
                
                (3,411
                )
                (D)Provision
                    for bad debts, decrease
                
                
                -
                
                
                
                -
                
                
                
                160
                
                (K)Loss
                    from operations
                
                
                (358
                )
                
                
                (289
                )
                
                
                (3,885
                )Interest
                    expense, increase
                
                
                (48
                )
                
                
                (35
                )
                
                
                (18
                )
                (H)(J)Equity
                    in loss of RUK, (increase) decrease
                
                
                (20
                )
                
                
                45
                
                
                
                19
                
                (B)Loss
                    on sale of investment in ZAP securities, increase
                
                
                (3
                )
                
                
                -
                
                
                
                -
                
                (A)Gain
                    on sale of US Hydro notes, decrease
                
                
                -
                
                
                
                (175
                )
                
                
                -
                
                (K)Other
                    income, net, increase
                
                
                595
                
                
                
                175
                
                
                
                -
                
                (C)(G)(K)Income
                    tax (expense) benefit, (decrease) increase
                
                
                (9
                )
                
                
                159
                
                
                
                1,237
                
                (D)Minority
                    interest in the (earnings) loss of subsidiaries
                
                
                (213
                )
                
                
                36
                
                
                
                756
                
                (C)(D)(E)(G)(I)(J)Net
                    loss increase
                
                $
                (56
                )
                
                $
                (84
                )
                
                $
                (1,891
                )Managing
                    Shareholder - Net  loss
                
                $
                (1
                )
                
                $
                (1
                )
                
                $
                (19
                )Shareholders
                    - Net loss
                
                $
                (55
                )
                
                $
                (83
                )
                
                $
                (1,872
                )Net
                    loss per Investor Share
                
                $
                -
                
                
                $
                -
                
                
                $
                (3
                )
  **Quarterly
                    Cash Flows (unaudited)**
                
                Nine
                    Months Ended September 30,2005
                
                
                2004
                
                
                2003Net
                    cash (used in) provided by operating activities
                
                $
                (57
                )
                
                $
                3
                
                
                $
                (304
                )Net
                    cash (used in) provided by investing activities
                
                
                (2
                )
                
                
                (3
                )
                
                
                333Net
                    cash provided by financing activities
                
                
                59
                
                
                
                -
                
                
                
                -Effect
                    of exchange rate on cash and cash equivalents
                
                
                -
                
                
                
                -
                
                
                
                (29
                )
  F-24
 
 Six
                    Months Ended June 30,2005
                
                
                2004
                
                
                2003Net
                    cash used in operating activities
                
                $
                (11
                )
                
                $
                -
                
                
                $
                (348
                )Net
                    cash (used in) provided by investing activities
                
                
                (4
                )
                
                
                -
                
                
                
                348Net
                    cash provided by financing activities
                
                
                15
                
                
                
                -
                
                
                
                -Three
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003Net
                    cash used in operating activities
                
                $
                (12
                )
                
                $
                (160
                )
                
                $
                (318
                )Net
                    cash provided by investing activities
                
                
                12
                
                
                
                160
                
                
                
                318
 
  (A)
              Originally,
                  the Fund did not properly record the value of ZAP shares and warrants
                  received in connection with the bankruptcy reorganization of ZAP.
                  As a
                  result, the Fund recorded the following adjustments
                  (unaudited):
  2005
                  
                  
                  2004
                  
                  
                  20039/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31
                  
                  
                  
                  9/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31
                  
                  
                  
                  9/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31Investment
                      in ZAP - increase
                  
                  $
                  168
                  
                  
                  $
                  186
                  
                  
                  $
                  301
                  
                  
                  $
                  117
                  
                  
                  $
                  792
                  
                  
                  $
                  558
                  
                  
                  $
                  972
                  
                  
                  $
                  864
                  
                  
                  $
                  531Beginning
                      Shareholders' equity - increase
                  
                  
                  341
                  
                  
                  
                  341
                  
                  
                  
                  341
                  
                  
                  
                  538
                  
                  
                  
                  538
                  
                  
                  
                  538
                  
                  
                  
                  534
                  
                  
                  
                  534
                  
                  
                  
                  534Other
                      comprehensive income - (decrease) increase
                  
                  
                  (159
                  )
                  
                  
                  (149
                  )
                  
                  
                  (37
                  )
                  
                  
                  (126
                  )
                  
                  
                  434
                  
                  
                  
                  20
                  
                  
                  
                  480
                  
                  
                  
                  330
                  
                  
                  
                  (3
                  )Gain
                      on sales of ZAP securities - (decrease) increase
                  
                  
                  (14
                  )
                  
                  
                  (6
                  )
                  
                  
                  (3
                  )
                  
                  
                  (295
                  )
                  
                  
                  (180
                  )
                  
                  
                  -
                  
                  
                  
                  (42
                  )
                  
                  
                  -
                  
                  
                  
                  -
 
 (B)
              The
                  Fund did not properly recognize its minority investment in RUK
                  due to
                  differences between US GAAP and UK GAAP, recognition of impairment
                  and
                  corrections of errors in the timing of certain income and expense
                  items.  As a result, the Fund recorded the following adjustments
                  (unaudited):
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Investment
                    in RUK - (decrease) increase
                
                $
                (350
                )
                
                $
                (215
                )
                
                $
                (210
                )
                
                $
                (109
                )
                
                $
                (102
                )
                
                $
                23
                
                
                $
                70
                
                
                $
                (89
                )
                
                $
                (18
                )Due
                    from affiliates - increase
                
                
                57
                
                
                
                53
                
                
                
                51
                
                
                
                38
                
                
                
                34
                
                
                
                31
                
                
                
                25
                
                
                
                14
                
                
                
                14Beginning
                    Shareholders' equity - (decrease) increase
                
                
                (141
                )
                
                
                (141
                )
                
                
                (141
                )
                
                
                8
                
                
                
                8
                
                
                
                8
                
                
                
                (14
                )
                
                
                (14
                )
                
                
                (14
                )CTA
                    - increase (decrease)
                
                
                15
                
                
                
                8
                
                
                
                2
                
                
                
                3
                
                
                
                2
                
                
                
                -
                
                
                
                82
                
                
                
                (7
                )
                
                
                (9
                )Equity
                    in loss from RUK - (increase) decrease
                
                
                (167
                )
                
                
                (29
                )
                
                
                (20
                )
                
                
                (82
                )
                
                
                (78
                )
                
                
                46
                
                
                
                27
                
                
                
                (54
                )
                
                
                19
  (C)
              The
                  Fund previously did not record provisions and recovery of bad debts
                  for
                  NEH in the proper periods. As a result, the Fund recorded the following
                  adjustments (unaudited):
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Accounts
                    receivable - (decrease) increase
                
                $
                (140
                )
                
                $
                (138
                )
                
                $
                (139
                )
                
                $
                21
                
                
                $
                21
                
                
                $
                9
                
                
                $
                (42
                )
                
                $
                (68
                )
                
                $
                (71
                )Minority
                    Interest - (decrease) increase
                
                
                (45
                )
                
                
                (44
                )
                
                
                (44
                )
                
                
                7
                
                
                
                7
                
                
                
                3
                
                
                
                (14
                )
                
                
                (22
                )
                
                
                (23
                )Beginning
                    Shareholders' equity - (decrease) increase
                
                
                (89
                )
                
                
                (90
                )
                
                
                (90
                )
                
                
                6
                
                
                
                6
                
                
                
                6
                
                
                
                (60
                )
                
                
                (60
                )
                
                
                (60
                )CTA
                    - (decrease) increase
                
                
                (6
                )
                
                
                (4
                )
                
                
                (5
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                14
                
                
                
                14
                
                
                
                12General
                    and administrative expense - decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                26
                
                
                
                -
                
                
                
                -Other
                    income - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12
                
                
                
                12
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Minority
                    interest expense - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4
                )
                
                
                (4
                )
                
                
                -
                
                
                
                (8
                )
                
                
                -
                
                
                
                -
 F-25
  (D)
                The
                    Fund re-performed the purchase accounting of the US Hydro acquisition
                    as
                    it determined that the original accounting treatment was not
                    in accordance
                    with GAAP.  The Fund made the adjustments necessary to bring the
                    treatment into accordance with GAAP by adjusting the beginning
                    shareholders’ equity, goodwill, intangible assets, property plant and
                    equipment, notes receivable, accrued expenses and deferred income
                    tax.  In the third quarter of 2003, the Fund recorded an
                    impairment of goodwill resulting from not exercising the Internal
                    Revenue
                    Code (“IRC”) Section 338 (h) 10 election and also recorded impairment of
                    notes receivable resulted from the negotiated settlement with
                    TCID.  The effects of the re-performance of the purchase
                    accounting and the recognition of the impairment are as follows
                    (unaudited):
 2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Goodwill
                    - (decrease) increase
                
                $
                (4,265
                )
                
                $
                (4,265
                )
                
                $
                (4,265
                )
                
                $
                (4,926
                )
                
                $
                (4,926
                )
                
                $
                (4,926
                )
                
                $
                227
                
                
                $
                2,732
                
                
                $
                2,732Intangibles,
                    net - decrease
                
                
                (5,748
                )
                
                
                (5,700
                )
                
                
                (5,652
                )
                
                
                (5,353
                )
                
                
                (5,311
                )
                
                
                (5,269
                )
                
                
                (3,048
                )
                
                
                (2,716
                )
                
                
                (2,436
                )Property,
                    plant and equipment, net - decrease
                
                
                (414
                )
                
                
                (417
                )
                
                
                (419
                )
                
                
                (350
                )
                
                
                (352
                )
                
                
                (354
                )
                
                
                (176
                )
                
                
                (170
                )
                
                
                (171
                )Deferred
                    income tax asset - current portion  - increase
                
                
                340
                
                
                
                309
                
                
                
                386
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                215
                
                
                
                381
                
                
                
                134Notes
                    receivable - non current portion - decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,750
                )
                
                
                (2,750
                )
                
                
                (2,750
                )Deferred
                  income tax asset - noncurrent - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,184
                
                
                
                1,184Accrued
                    expenses - (decrease) increase
                
                
                (100
                )
                
                
                (60
                )
                
                
                (61
                )
                
                
                88
                
                
                
                76
                
                
                
                54
                
                
                
                66
                
                
                
                1,199
                
                
                
                1,206Deferred
                    income tax, net - non current portion - (decrease)
                    increase
                
                
                (1,767
                )
                
                
                (1,890
                )
                
                
                (1,878
                )
                
                
                (2,543
                )
                
                
                (2,663
                )
                
                
                (2,401
                )
                
                
                3,104
                
                
                
                -
                
                
                
                -Minority
                    interest - decrease
                
                
                (2,400
                )
                
                
                (2,372
                )
                
                
                (2,339
                )
                
                
                (2,387
                )
                
                
                (2,337
                )
                
                
                (2,395
                )
                
                
                (2,541
                )
                
                
                (741
                )
                
                
                (733
                )Beginning
                    Shareholders' equity - decrease
                
                
                (5,634
                )
                
                
                (5,634
                )
                
                
                (5,634
                )
                
                
                (5,891
                )
                
                
                (5,891
                )
                
                
                (5,891
                )
                
                
                (60
                )
                
                
                (60
                )
                
                
                (60
                )Cost
                    of revenues - increase
                
                
                (136
                )
                
                
                (89
                )
                
                
                (44
                )
                
                
                (118
                )
                
                
                (78
                )
                
                
                (40
                )
                
                
                (794
                )
                
                
                (509
                )
                
                
                (254
                )Impairment
                    of Goodwill - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (6,433
                )
                
                
                -
                
                
                
                -Write-down
                    of Notes receivable - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (3,411
                )
                
                
                (3,411
                )
                
                
                (3,411
                )Income
                    tax expense - (increase) decrease
                
                
                (126
                )
                
                
                (76
                )
                
                
                (9
                )
                
                
                265
                
                
                
                397
                
                
                
                159
                
                
                
                2,021
                
                
                
                1,467
                
                
                
                1,237Minority
                    interest expense - decrease (increase)
                
                
                76
                
                
                
                48
                
                
                
                15
                
                
                
                (43
                )
                
                
                (93
                )
                
                
                (35
                )
                
                
                2,516
                
                
                
                716
                
                
                
                708
   (E)
              The
                  Fund previously did not properly record depreciation expense on
                  certain
                  NEH assets.  As a result, the Fund recorded the following
                  adjustments (unaudited):
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Property,
                    plant and equipment, net - decrease
                
                $
                (69
                )
                
                $
                (69
                )
                
                $
                (69
                )
                
                $
                (160
                )
                
                $
                (147
                )
                
                $
                (136
                )
                
                $
                (60
                )
                
                $
                (48
                )
                
                $
                (37
                )Beginning
                    Shareholders' equity - decrease
                
                
                (57
                )
                
                
                (57
                )
                
                
                (57
                )
                
                
                (84
                )
                
                
                (84
                )
                
                
                (84
                )
                
                
                (20
                )
                
                
                (20
                )
                
                
                (20
                )Minority
                    interest - decrease
                
                
                (22
                )
                
                
                (22
                )
                
                
                (22
                )
                
                
                (51
                )
                
                
                (47
                )
                
                
                (44
                )
                
                
                (19
                )
                
                
                (15
                )
                
                
                (12
                )Cost
                    of revenues - decrease (increase)
                
                
                19
                
                
                
                19
                
                
                
                19
                
                
                
                (38
                )
                
                
                (25
                )
                
                
                (13
                )
                
                
                (40
                )
                
                
                (28
                )
                
                
                (15
                )CTA
                    - (decrease) increase
                
                
                (3
                )
                
                
                (3
                )
                
                
                (3
                )
                
                
                1
                
                
                
                1
                
                
                
                1
                
                
                
                6
                
                
                
                6
                
                
                
                5Minority
                    interest expense - (increase) decrease
                
                
                (6
                )
                
                
                (6
                )
                
                
                (6
                )
                
                
                12
                
                
                
                8
                
                
                
                4
                
                
                
                13
                
                
                
                9
                
                
                
                5
   (F)
              Originally,
                  the Fund did not record the write-off of prepaid expense relating
                  to
                  NEH.  As a result, the Fund recorded the following adjustments
                  (unaudited):
  2005
                  
                  
                  2004
                  
                  
                  20039/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31
                  
                  
                  
                  9/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31
                  
                  
                  
                  9/30
                  
                  
                  
                  6/30
                  
                  
                  
                  3/31Other
                      assets - increase (decrease)
                  
                  $
                  12
                  
                  
                  $
                  12
                  
                  
                  $
                  12
                  
                  
                  $
                  (21
                  )
                  
                  $
                  (21
                  )
                  
                  $
                  (22
                  )
                  
                  $
                  (55
                  )
                  
                  $
                  (56
                  )
                  
                  $
                  (58
                  )Minority
                      interest - increase (decrease)
                  
                  
                  4
                  
                  
                  
                  4
                  
                  
                  
                  4
                  
                  
                  
                  (6
                  )
                  
                  
                  (6
                  )
                  
                  
                  (7
                  )
                  
                  
                  (18
                  )
                  
                  
                  (18
                  )
                  
                  
                  (19
                  )Beginning
                      Shareholders' equity - increase (decrease)
                  
                  
                  8
                  
                  
                  
                  8
                  
                  
                  
                  8
                  
                  
                  
                  (15
                  )
                  
                  
                  (15
                  )
                  
                  
                  (15
                  )
                  
                  
                  (49
                  )
                  
                  
                  (49
                  )
                  
                  
                  (49
                  )CTA
                      - increase
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  12
                  
                  
                  
                  11
                  
                  
                  
                  10
 F-26
 
 (G)
              The
                  Fund originally recorded disbursements made to Dubai in 2003 and
                  the prior
                  year as intercompany advances instead of general and administrative
                  expenses.  In 2004, the Fund originally expensed all the
                  disbursements made to Dubai.  To correct these errors, the Fund
                  recorded the following adjustments
                  (unaudited):
 
 2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Due
                    from affiliates - decrease
                
                $
                (16
                )
                
                $
                (5
                )
                
                $
                -
                
                
                $
                (1,162
                )
                
                $
                (873
                )
                
                $
                (719
                )
                
                $
                (215
                )
                
                $
                (181
                )
                
                $
                (137
                )Minority
                    interest - decrease
                
                
                (7
                )
                
                
                (3
                )
                
                
                (1
                )
                
                
                (372
                )
                
                
                (280
                )
                
                
                (231
                )
                
                
                (69
                )
                
                
                (58
                )
                
                
                (44
                )Beginning
                    Shareholders' equity - decrease
                
                
                (381
                )
                
                
                (381
                )
                
                
                (381
                )
                
                
                (416
                )
                
                
                (416
                )
                
                
                (416
                )
                
                
                (44
                )
                
                
                (44
                )
                
                
                (44
                )CTA
                    - (decrease) increase
                
                
                (19
                )
                
                
                (18
                )
                
                
                (15
                )
                
                
                8
                
                
                
                9
                
                
                
                4
                
                
                
                17
                
                
                
                17
                
                
                
                13General
                    and administrative expenses - increase
                
                
                (28
                )
                
                
                (17
                )
                
                
                (12
                )
                
                
                (561
                )
                
                
                (273
                )
                
                
                (112
                )
                
                
                (176
                )
                
                
                (141
                )
                
                
                (92
                )Other
                    income - increase
                
                
                601
                
                
                
                599
                
                
                
                595
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Minority
                    interest expense - (increase) decrease
                
                
                (182
                )
                
                
                (185
                )
                
                
                (186
                )
                
                
                179
                
                
                
                87
                
                
                
                36
                
                
                
                57
                
                
                
                45
                
                
                
                30
   (H)
              Originally,
                  the Fund did not properly record the management fees and interest
                  accrued
                  on unpaid management fees to the Managing Shareholder.  As a
                  result, the Fund recorded the following adjustments
                  (unaudited):
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Due
                    to affiliates - increase
                
                $
                1,412
                
                
                $
                930
                
                
                $
                459
                
                
                $
                537
                
                
                $
                75
                
                
                $
                35
                
                
                $
                632
                
                
                $
                184
                
                
                $
                18Management
                    fee to the Managing Shareholder - increase
                
                
                (1,234
                )
                
                
                (823
                )
                
                
                (411
                )
                
                
                (412
                )
                
                
                -
                
                
                
                -
                
                
                
                (548
                )
                
                
                (137
                )
                
                
                -Interest
                    expense - increase
                
                
                (178
                )
                
                
                (107
                )
                
                
                (48
                )
                
                
                (125
                )
                
                
                (75
                )
                
                
                (35
                )
                
                
                (84
                )
                
                
                (47
                )
                
                
                (18
                )
   (I)
              The
                  Fund corrected the method of recording professional service fees
                  to record
                  the fees in the periods during which the services were
                  performed.  As a result, the Fund recorded the following
                  adjustments (unaudited):
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Accrued
                    expenses - increase (decrease)
                
                $
                44
                
                
                $
                23
                
                
                $
                (97
                )
                
                $
                19
                
                
                $
                (14
                )
                
                $
                5
                
                
                $
                27
                
                
                $
                43
                
                
                $
                82Minority
                    interest - increase (decrease)
                
                
                33
                
                
                
                28
                
                
                
                33
                
                
                
                3
                
                
                
                19
                
                
                
                17
                
                
                
                12
                
                
                
                9
                
                
                
                (1
                )Beginning
                    Shareholders' Equity - increase
                
                
                59
                
                
                
                59
                
                
                
                59
                
                
                
                27
                
                
                
                27
                
                
                
                27
                
                
                
                8
                
                
                
                8
                
                
                
                8General
                    and administrative expenses - (increase) decrease
                
                
                (123
                )
                
                
                (102
                )
                
                
                18
                
                
                
                (72
                )
                
                
                (39
                )
                
                
                (59
                )
                
                
                (40
                )
                
                
                (56
                )
                
                
                (95
                )Minority
                    interest expense - (increase) decrease
                
                
                (13
                )
                
                
                (8
                )
                
                
                (13
                )
                
                
                23
                
                
                
                7
                
                
                
                10
                
                
                
                (7
                )
                
                
                (4
                )
                
                
                6
 
  (J)
              The
                  Fund did not record certain NEH expenses in the proper period and
                  also did
                  not properly recognize the impact of the trouble-debt restructuring
                  resulting from renegotiated payment terms with a bank.  As a
                  result, the Fund recorded the following adjustments
                  (unaudited):
 
 F-27
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Accrued
                    expenses - (decrease) increase
                
                $
                (11
                )
                
                $
                60
                
                
                $
                54
                
                
                $
                104
                
                
                $
                (53
                )
                
                $
                (124
                )
                
                $
                (227
                )
                
                $
                (221
                )
                
                $
                (263
                )Long-term
                    debt - noncurrent portion - increase
                
                
                59
                
                
                
                14
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Other
                    liabilities - increase
                
                
                15
                
                
                
                15
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Minority
                    interest - (decrease) increase
                
                
                (19
                )
                
                
                (28
                )
                
                
                (17
                )
                
                
                (34
                )
                
                
                17
                
                
                
                40
                
                
                
                73
                
                
                
                71
                
                
                
                85Beginning
                    Shareholders' Equity - (decrease) increase
                
                
                (83
                )
                
                
                (83
                )
                
                
                (83
                )
                
                
                130
                
                
                
                130
                
                
                
                130
                
                
                
                235
                
                
                
                235
                
                
                
                235CTA
                    - (decrease) increase
                
                
                (6
                )
                
                
                (4
                )
                
                
                (3
                )
                
                
                1
                
                
                
                (1
                )
                
                
                (1
                )
                
                
                (57
                )
                
                
                (52
                )
                
                
                (45
                )General
                    and administrative expenses - decrease (increase)
                
                
                140
                
                
                
                67
                
                
                
                73
                
                
                
                (295
                )
                
                
                (137
                )
                
                
                (66
                )
                
                
                (36
                )
                
                
                (48
                )
                
                
                (18
                )Interest
                    expense - increase
                
                
                (73
                )
                
                
                (29
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Minority
                    interest expense - (increase) decrease
                
                
                (22
                )
                
                
                (12
                )
                
                
                (24
                )
                
                
                94
                
                
                
                44
                
                
                
                21
                
                
                
                12
                
                
                
                15
                
                
                
                6
  (K)
              Certain
                  items in the previously issued financial statements for the years
                  ended
                  December 31, 2004 and 2003 have been reclassified to conform to the
                  current year presentation. These reclassifications had no effect
                  on net
                  income (loss).
  2005
                
                
                2004
                
                
                20039/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31
                
                
                
                9/30
                
                
                
                6/30
                
                
                
                3/31Due
                    from affiliates - (decrease) increase
                
                $
                16
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                (34
                )
                
                $
                314
                
                
                $
                190Due
                    to affiliates - (decrease) increase
                
                
                16
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (34
                )
                
                
                314
                
                
                
                190Inventory
                    - increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                318
                
                
                
                275
                
                
                
                262Prepaid
                    expenses and other current assets - decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (318
                )
                
                
                (275
                )
                
                
                (262
                )Property,
                    plant and equipment, net - increase
                
                
                -
                
                
                
                -
                
                
                
                1,022
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Minority
                    interest - decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (98
                )
                
                
                -
                
                
                
                -Shareholders'
                    equity- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                98
                
                
                
                -
                
                
                
                -Deposits
                    - decrease
                
                
                -
                
                
                
                -
                
                
                
                (1,022
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Other
                    assets - increase
                
                
                -
                
                
                
                -
                
                
                
                
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Deferred
                    income tax asset - noncurrent portion- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,184
                
                
                
                1,184Deferred
                    income tax liability- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,184
                
                
                
                1,184Accounts
                    payable- decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (226
                )
                
                
                (222
                )
                
                
                (262
                )Accrued
                    expenses- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                226
                
                
                
                222
                
                
                
                262Long-term
                    debt - current portion- (decrease) increase
                
                
                (84
                )
                
                
                (133
                )
                
                
                2,096
                
                
                
                2,121
                
                
                
                2,225
                
                
                
                2,259
                
                
                
                3,089
                
                
                
                3,597
                
                
                
                3,860Long-term
                    debt - noncurrent portion- increase (decrease)
                
                
                84
                
                
                
                133
                
                
                
                (2,096
                )
                
                
                (2,121
                )
                
                
                (2,225
                )
                
                
                (2,259
                )
                
                
                (3,089
                )
                
                
                (3,597
                )
                
                
                (3,860
                )Other
                    liabilities- increase
                
                
                341
                
                
                
                314
                
                
                
                287
                
                
                
                228
                
                
                
                197
                
                
                
                166
                
                
                
                -
                
                
                
                -
                
                
                
                -Deferred
                    rent- decrease
                
                
                (341
                )
                
                
                (314
                )
                
                
                (287
                )
                
                
                (228
                )
                
                
                (197
                )
                
                
                (166
                )
                
                
                -
                
                
                
                -
                
                
                
                -Provision
                    for bad debt- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                147
                
                
                
                150
                
                
                
                160General
                    and administrative expenses- decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (147
                )
                
                
                (150
                )
                
                
                (160
                )Other
                    income (expense) - increase (decrease)
                
                
                4
                
                
                
                4
                
                
                
                -
                
                
                
                181
                
                
                
                165
                
                
                
                175
                
                
                
                (680
                )
                
                
                (579
                )
                
                
                -Gain
                    on sale of US Hydro note- decrease
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (175
                )
                
                
                (175
                )
                
                
                (175
                )
                
                
                -
                
                
                
                -
                
                
                
                -Gain
                    (loss) on sale of equipment- (decrease) increase
                
                
                (5
                )
                
                
                (5
                )
                
                
                -
                
                
                
                (6
                )
                
                
                10
                
                
                
                
                
                
                
                -
                
                
                
                579
                
                
                
                -Loss
                    on sale of investment- increase
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                562
                
                
                
                -
                
                
                
                -Loss
                    on  distribution and sale of investment in ZAP securities-
                    increase
                
                
                1
                
                
                
                1
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                118
                
                
                
                -
                
                
                
                -
 
 **3.  SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES**
 
 *a)  Principles
        of Consolidation*
 
 The
        consolidated financial statements include the financial statements of the
        Fund
        and its majority-owned subsidiaries.  Minority interests of
        majority-owned subsidiaries are calculated based upon the respective minority
        interest ownership percentages.  All material intercompany
        transactions have been eliminated in consolidation.
 
 F-28
 
 The
        Fund
        uses the equity method of accounting for its investments in affiliates which
        are
        50% or less owned as the Fund has the ability to exercise significant influence
        over the operating and financial policies of the affiliates but does not
        control
        the affiliate.  The Fund’s share of the earnings or losses of the
        affiliates is included in the consolidated financial statements.
 
 
 *b)  Use
        of Estimates*
 
 The
        preparation of consolidated financial statements in accordance with accounting
        principles generally accepted in 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 ongoing basis, the Fund evaluates its estimates,
        including bad debts, notes receivable, investments, recoverable value of
        property, plant and equipment, intangibles and recordable liabilities for
        litigation and other contingencies. The Fund bases its estimates on historical
        experience, current and expected conditions and various other assumptions
        that
        are believed to be reasonable under the circumstances, the results of which
        form
        the basis for making judgments about the carrying values of assets and
        liabilities that are not readily apparent from other sources. Actual results
        may
        differ from these estimates under different assumptions or
        conditions.
 
 
 *c)    Revenue
        Recognition*
 
 Revenues
        generated from the sale of electric power and fresh water are recorded in
        the
        month of delivery, based on the estimated volumes sold to customers. Power
        generation revenue adjustments are made to reflect actual volumes delivered
        when
        the actual volumetric information subsequently becomes
        available.  Final billings do not vary significantly from
        estimates.
 
 
 *d)    Cash
        and Cash Equivalents*
 
 The
        Fund
        considers all highly liquid investments with maturities when purchased of
        three
        months or less to be cash and cash equivalents.  Cash and cash
        equivalents consist of commercial paper and funds deposited in bank
        accounts.  As of December 31, 2005, 2004 and 2003, the Fund had cash
        deposits held in foreign banks of $893, $692 and $747, respectively, which
        was
        in excess of the Egyptian insurance limits.  Cash deposits held in US
        banks exceeded insured limits by $712 as of December 31, 2005.  All of
        the cash deposits held in US banks were fully insured as of December 31,
        2004
        and 2003.
 
 
 *e)   Accounts
        Receivable*
 
 Accounts
        receivables are recorded at invoice price in the period the related revenues
        are
        earned, and do not bear interest.  The Fund maintains an allowance for
        doubtful accounts for estimated uncollectible accounts
        receivable.  The allowance is based on the Fund’s assessment of aged
        accounts, historical experience, and other currently available evidence of
        the
        collectability and the aging of accounts receivable.   Account
        balances are charged off against the allowance when the Fund believes it
        is
        probable that the receivable will not be recovered.
 F-29
 
 *f)    Inventory*
 
 Inventory
        primarily consists of spare parts and materials used in the Fund’s
        operation.  Inventories are stated at the lower of cost and net
        realizable value.  An allowance is established for slow moving items
        on the basis of management’s review and assessment of inventory
        movements.
 
 
 *g)    Investment
        in Securities*
 
 At
        certain times, the Fund has held as assets, marketable equity securities
        and the
        Fund has classified these marketable equity securities as
        available-for-sale.  These 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 such declines in value judged to be other-than-temporary
        are included in other income.
 
 
 *h)    Property,
        Plant and Equipment*
 
 Property,
        plant and equipment, consisting of land, hydro-electric generation facilities
        (“HEGFs”), water desalinization facilities and office equipment are stated at
        cost less accumulated depreciation. Renewals and betterments that increase
        the
        useful lives of the assets are capitalized.  Repair and maintenance
        expenditures are expensed as incurred.  Upon retirement or disposal of
        assets, the cost and related accumulated depreciation are removed from the
        consolidated balance sheets.  The difference, if any, between the net
        asset value and any proceeds from such retirement or disposal is recorded
        as a
        gain or loss in the statement of operations.
 
 Depreciation
        is recorded using the straight-line method over the useful lives of the
        assets.
  
 HEGFs
              30
                yearsWater
                desalinization facilities
              5-10
                yearsOffice
                equipment
              5
                years
 
 
 *i)    Impairment
        of Goodwill, Intangibles and Long-Lived Assets*
 
 The
        Fund
        evaluates intangible assets and long-lived assets, such as property, plant
        and
        equipment, when events or changes in circumstances indicate that the carrying
        value of such assets may not be recoverable. The determination of whether
        an
        impairment has occurred is made by comparing the carrying value of an asset
        to
        the estimated undiscounted cash flows attributable to that asset. If an
        impairment has occurred, the impairment loss recognized is the amount by
        which
        the carrying value exceeds the estimated fair value of the asset, which is
        based
        on the estimated future cash flows discounted at the estimated cost of
        capital.  The analysis requires estimates of the amount and timing of
        projected cash flows and, where applicable, judgments associated with, among
        other factors, the appropriate discount rate.  Such estimates are
        critical in determining whether any impairment charge should be recorded
        and the
        amount of such charge if an impairment loss is deemed to be
        necessary.
 
 The
        Fund
        evaluates goodwill, and intangible assets with indefinite useful lives, under
        Statement of Financial Accounting Standards (“SFAS”) No. 142, *“Goodwill and
        Other Intangible Assets”*.  Under SFAS No. 142, goodwill and
        intangible assets with indefinite lives are subject to annual impairment
        tests
        through a comparison of fair value to carrying value.  The two-step
        approach to assess a reporting unit’s goodwill impairment requires that the Fund
        first compare the estimated fair value of a reporting unit which has been
        assigned to goodwill to the carrying amount of the unit’s assets and
        liabilities, including its goodwill.  If the fair value of the
        reporting unit is below its carrying amount, then the second step of the
        impairment test is performed, in which the current fair value of the unit’s
        assets and liabilities is used to determine the current implied fair value
        of
        the unit’s goodwill.
  F-30
  *j)    Income
        taxes*
 
 The
        Fund’s Egyptian subsidiaries have a ten year income tax holiday that expires on
        December 31, 2010.  Accordingly, no provision has been made for
        Egyptian income taxes in the accompanying consolidated financial
        statements.
 
 US
        Hydro,
        for federal income tax purposes, files on a consolidated basis using the
        accrual
        method of accounting on a calendar year basis. For state income tax purposes,
        US
        Hydro files on an individual entity basis.  US Hydro uses the
        liability method in accounting for income taxes.  Deferred income
        taxes reflects, where required, the net tax effect of temporary differences
        arising between the carrying amounts of assets and liabilities for financial
        reporting purposes and amounts used for tax purposes.
 
 Except
        for US Hydro, 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.
 
  *k)    Foreign
          Currency Translation*
 
 The
        Egyptian Pound and British Pound Sterling are the functional currencies of
        the
        Fund’s foreign operations. The consolidated financial statements of the Fund’s
        non-United States operations are translated into United States
        dollars.   Assets and liabilities are translated into US dollars
        using the current exchange rates in effect at the balance sheet date, while
        revenues and expenses are translated using the average exchange rates during
        the
        applicable reporting period.  The cumulative foreign currency
        translation adjustments are a component of other comprehensive
        income.
 
 
 *l)**Unaudited
        Interim Results*
  The
        unaudited interim consolidated financial statements included herein have
        been
        prepared on the same basis as the annual consolidated statements and, in
        the
        opinion of management, reflect all adjustments, which include only normal
        recurring adjustments, necessary to present fairly the Fund’s financial position
        and its results of operations and cash flows for each of the interim periods
        presented. The financial data and other information disclosed in these notes
        to
        the consolidated financial statements related to such interim periods are
        also
        unaudited.
 
  *m)    Fair
          Value of Financial Instruments*
 
 For
        the
        years ended December 31, 2005, 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.
 
 
 *n)     Significant
        Customers*
 
 The
        Fund’s two largest customers accounted for 21.8% and 9.9% of revenues in 2005,
        22.1% and 14.8% of revenues in 2004 and 28.8% and 17.2% of revenues in
        2003.
  F-31
 
 *o)    Recent
        Accounting Pronouncements*
 
 *SFAS 143 and FIN 47*
 
 In
        June
        2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143,
*Accounting for Asset Retirement Obligations*, on the accounting for
        obligations associated with the retirement of long-lived assets. SFAS No.
        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 No. 143 is effective for fiscal years
        beginning after June 15, 2002. Furthermore, in March 2005, the FASB issued
        FASB Interpretation No. 47 (“FIN 47”), *Accounting for Conditional Asset
        Retirement Obligations, an interpretation of FASB Statement No. 143*,
        which clarifies the term “conditional asset retirement obligation” as used in
        SFAS No. 143. Specifically, FIN 47 provides that an asset retirement
        obligation is conditional when the timing and/or method of settling the
        obligation is conditioned on a future event. Accordingly, an entity is required
        to recognize a liability for the fair value of a conditional asset retirement
        obligation if the fair value of the liability can be reasonably estimated.
        Uncertainty about the timing and/or method of settlement of a conditional
        asset
        retirement obligation should be factored into the measurement of the liability
        when sufficient information exists. This interpretation also clarifies when
        an
        entity would have sufficient information to reasonably estimate the fair
        value
        of an asset retirement obligation. FIN 47 is effective for fiscal years ending
        after December 15, 2005.  The Fund adopted SFAS No. 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.
        SFAS
        No. 145 is effective for interim periods beginning after May 15,
        2002.  The Fund adopted SFAS No. 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.  SFAS No. 146 is effective for fiscal
        years ending after December 31, 2002.  The Fund adopted SFAS No. 146
        effective January 1, 2003, with no material impact on the consolidated financial
        statements.
 
 *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,
        under
        certain circumstances, 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.
  
 F-32
  *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 No. 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.  SFAS No. 150 is effective for interim periods beginning
        after June 15, 2003.  The Fund adopted SFAS No. 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 No.
        153
        effective June 15, 2005, with no material impact on the consolidated financial
        statements.
 
 *SFAS
        154*
 
 In
        May
        2005, the FASB issued SFAS No. 154, *Accounting Changes and Error
        Corrections*.  SFAS No. 154 replaces APB Opinion No. 20,
*Accounting Changes*, and SFAS No. 3, *Reporting Accounting Changes in
        Interim Financial Statements*. This statement changes the requirements for
        the accounting for, and reporting of, a change in accounting principle and
        applies to all voluntary changes in accounting principle, as well as changes
        pursuant to accounting pronouncements that do not include transition
        rules.   Under SFAS No. 154, changes in accounting principle must
        be applied retrospectively to prior periods’ financial statements, or the
        earliest practicable date, as the required method for reporting a change
        in
        accounting principle.  The Fund adopted SFAS No. 154 effective
        December 15, 2005, and accordingly restated the consolidated financial
        statements, as described in Note 2.
  F-33
  **4.    ACCOUNTS
        RECEIVABLE**
 
 Accounts
        receivable at December 31, 2005, 2004 and 2003 is as follows:
  2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Accounts
                    receivable
                
                $
                1,704
                
                
                $
                1,418
                
                
                $
                1,258Less:
                    allowance for doubtful accounts
                
                
                (337
                )
                
                
                (378
                )
                
                
                (193
                )$
                1,367
                
                
                $
                1,040
                
                
                $
                1,065
 
 The
        Fund
        records an allowance to account for potentially uncollectible accounts
        receivable. The allowance is determined based on Management’s knowledge of the
        business, specific customers, review of aged accounts and a specific
        identification of accounts where collection is at risk.  The following
        details the activity in Fund’s allowance for doubtful accounts at December 31,
        2005, 2004 and 2003.
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Balance
                    at beginning of  year
                
                $
                378
                
                
                $
                193
                
                
                $
                416Additions
                    charged to bad debt provision (1)
                
                
                152
                
                
                
                156
                
                
                
                457Deductions,
                    net of recoveries (2)
                
                
                (193
                )
                
                
                29
                
                
                
                (680
                )Balance,
                    end of year
                
                $
                337
                
                
                $
                378
                
                
                $
                193
 
 (1)
              Bad
                  debt provision relates to estimated losses due to collectability
                  issues,
                  which is included in general and administrative expenses in the
                  statement
                  of operations.
 
 (2)
              Deductions,
                  net of recoveries primarily relates to receivable write-offs, but
                  also
                  includes recoveries of previously written off
                  receivables.
  **5.     NOTES
        RECEIVABLE**
 
 Notes
        receivable at December 31, 2005, 2004 and 2003 is as follows:
  2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)TCID
                
                $
                -
                
                
                $
                -
                
                
                $
                3,800Blackstone
                
                
                1,533
                
                
                
                1,642
                
                
                
                -Other
                
                
                107
                
                
                
                125
                
                
                
                469Total
                    notes receivable
                
                
                1,640
                
                
                
                1,767
                
                
                
                4,269Less:
                    current portion
                
                
                140
                
                
                
                131
                
                
                
                4,269Notes
                    receivable– long-term portion
                
                $
                1,500
                
                
                $
                1,636
                
                
                $
                -
 
 F-34
 
 Quarterly
        notes receivable were as follows (unaudited):
  2005September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Blackstone
                
                $
                1,562
                
                
                $
                1,590
                
                
                $
                1,618Other
                
                
                117
                
                
                
                123
                
                
                
                131Total
                    notes receivable
                
                
                1,679
                
                
                
                1,713
                
                
                
                1,749Less:
                    current portion
                
                
                125
                
                
                
                131
                
                
                
                137Notes
                    receivable– long-term portion
                
                $
                1,554
                
                
                $
                1,582
                
                
                $
                1,6122004September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Other
                
                $
                143
                
                
                $
                271
                
                
                $
                369Less:
                    current portion
                
                
                143
                
                
                
                271
                
                
                
                369Notes
                    receivable– long-term portion
                
                $
                -
                
                
                $
                -
                
                
                $
                -2003September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)TCID
                
                $
                3,800
                
                
                $
                4,000
                
                
                $
                4,000Other
                
                
                704
                
                
                
                833
                
                
                
                -Total
                    notes receivable
                
                
                4,504
                
                
                
                4,833
                
                
                
                4,000Less:
                    current portion
                
                
                200
                
                
                
                200
                
                
                
                200Notes
                    receivable– long-term portion
                
                $
                4,304
                
                
                $
                4,633
                
                
                $
                3,800
 
 **Blackstone**
 
 In
        the
        fourth quarter of 2004, US Hydro’s Blackstone project and New England Power
        (“NEP”) agreed to terminate their 1989 power purchase agreement. Under the terms
        of the Termination and Release Agreement, Blackstone now has the right to
        make
        such open market arrangements for the sale of electricity production from
        its
        facilities as it considers appropriate.  In addition, beginning
        January 2005, NEP agreed to pay Blackstone $16 per month through February
        2010
        and a lump sum payment of $1,000 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 $380 in 2004,
        reflecting $1,642 in present value of payments to be received, less an
        impairment of electric power sales contracts of $1,262 to write-down the
        carrying value of the pre-existing power purchase agreement to
        zero.
 
 **TCID**
 
 On
        October 19, 1988, US Hydro entered into an agreement for services with
        TCID.  Under the terms of the agreement, the Fund provided funding and
        development services to TCID for the purpose of developing electricity
        generating capacity at the Lahontan Dam in exchange for a series of payment
        obligations of TCID in the form of notes receivable (the “Notes
        Receivable”).  At the time of the acquisition of US Hydro by the Fund and
        Trust V, US Hydro valued the obligations under the Notes Receivable at
        $7,411.  During 2003, the Fund received principal payments on the Notes
        Receivable of $200.
 
 During
        the three-month period ended March 31, 2003 US Hydro undertook to renegotiate
        the TCID payment obligations.  The result of the renegotiation was a
        settlement between the parties under which TCID made a $4,000 cash payment
        to US
        Hydro in satisfaction of its obligations to US Hydro under the Notes Receivable
        and US Hydro released TCID from any other obligations.  US Hydro and TCID
        entered into a Termination and Release Agreement on March 31, 2004 at which
        time
        the TCID termination payment was made.
  
 F-35
  Based
        on
        the $4,000 expected amount of the settlement, US Hydro recorded a write-down
        of
        $3,411 in 2003 and recorded the expected amount of the settlement as a
        short-term Notes Receivable.  During the first quarter of 2004, TCID
        paid US Hydro, $4,000 and the Fund recorded a gain of $175, net of legal
        fees.  Pursuant to the term loan agreement, US Hydro paid the proceeds
        from the sale to its lender on March 31, 2004.
 
 
 **6.     
         IMPAIRMENT OF GOODWILL, INTANGIBLES AND LONG-LIVED
        ASSETS**
 
 As
        part
        of the US Hydro purchase agreement, the Fund and Trust V had the option of
        treating the acquisition of the Synergics stock as an acquisition of assets
        in
        accordance with IRC Section 338 (h) (10).  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 US
        Hydro.  As a result of not exercising the election, US Hydro reversed
        the $1,100 contingent tax obligation (along with other purchase price
        adjustments) it had recorded in anticipation of making such an
        election.  Also as a result of not making the election, the Fund
        recorded a net deferred tax liability of $5,000 with a corresponding increase
        to
        goodwill to reflect the temporary differences between the financial reporting
        basis and the income tax basis of the assets acquired.
 
 US
        Hydro
        performs periodic evaluations of its business operations.  US Hydro
        performed an interim impairment test in the third quarter of 2003 and, based
        on
        the results of this test, the Fund recorded a goodwill impairment expense
        of
        $6,433 during the quarter ended September 30, 2003.
 
 US
        Hydro
        also performed an impairment test for property, plant and equipment and
        amortized intangibles and noted a decrease in the estimated future undiscounted
        cash flow of certain US Hydro projects.  Based on the results of the
        tests, the Fund recorded an impairment expense of $79, $75 and $189 for
        property, plant and equipment for the years ended December 31, 2005, 2004
        and
        2003, respectively.  In addition, the Fund also recorded impairment
        expenses of $23, $22 and $1,918 for amortized intangibles for the years ended
        December 31, 2005, 2004 and 2003, respectively.
 
 
 **7.    
         PROPERTY, PLANT AND EQUIPMENT**
 
 At
        December 31, 2005, 2004 and 2003, property, plant and equipment at cost,
        accumulated depreciation and related depreciation expense were:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Land
                
                $
                186
                
                
                $
                190
                
                
                $
                193HEGF
                
                
                1,082
                
                
                
                1,157
                
                
                
                1,227Water
                    desalinization facilities
                
                
                27,545
                
                
                
                24,408
                
                
                
                23,661Office
                    equipment
                
                
                754
                
                
                
                748
                
                
                
                793Construction
                    in progress
                
                
                -
                
                
                
                58
                
                
                
                59829,567
                
                
                
                26,561
                
                
                
                26,472Less:
                    accumulated depreciation
                
                
                (8,755
                )
                
                
                (6,390
                )
                
                
                (4,351
                )$
                20,812
                
                
                $
                20,171
                
                
                $
                22,121
 
 For
        the
        years ended December 31, 2005, 2004 and 2003, depreciation expense was $2,206,
        $2,057 and $1,870, respectively, which is included in cost of
        revenues.
 
 F-36
 
 Quarterly
        property, plant and equipment and related depreciation expense were as follows
        (unaudited):
 
 2005September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Land
                
                $
                190
                
                
                $
                190
                
                
                $
                190HEGF
                
                
                1,157
                
                
                
                1,157
                
                
                
                1,157Water
                    desalinization facilities
                
                
                27,484
                
                
                
                26,960
                
                
                
                25,559Office
                    equipment
                
                
                759
                
                
                
                735
                
                
                
                734Construction
                    in progress
                
                
                59
                
                
                
                16
                
                
                
                1,11429,649
                
                
                
                29,058
                
                
                
                28,754Less:
                    accumulated depreciation
                
                
                (8,248
                )
                
                
                (7,556
                )
                
                
                (7,061
                )$
                21,401
                
                
                $
                21,502
                
                
                $
                21,693
  Depreciation expense for the 2005 year-to-date periods
          ended
          September 30, June 30 and March 31, was $1,683, $1,091 and $541,
          respectively.
  2004September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Land
                
                $
                193
                
                
                $
                193
                
                
                $
                193HEGF
                
                
                1,227
                
                
                
                1,227
                
                
                
                1,227Water
                    desalinization facilities
                
                
                23,896
                
                
                
                23,842
                
                
                
                23,533Office
                    equipment
                
                
                726
                
                
                
                726
                
                
                
                789Construction
                    in progress
                
                
                370
                
                
                
                347
                
                
                
                61026,412
                
                
                
                26,335
                
                
                
                26,352Less:
                    accumulated depreciation
                
                
                (5,804
                )
                
                
                (5,257
                )
                
                
                (4,767
                )$
                20,608
                
                
                $
                21,078
                
                
                $
                21,585
  Depreciation expense for the 2004 year-to-date periods
          ended
          September 30, June 30 and March 31, was $1,545, $994 and $449,
          respectively.
  2003September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Land
                
                $
                255
                
                
                $
                255
                
                
                $
                255HEGF
                
                
                1,353
                
                
                
                1,353
                
                
                
                1,353Water
                    desalinization facilities
                
                
                23,615
                
                
                
                23,851
                
                
                
                26,445Office
                    equipment
                
                
                789
                
                
                
                804
                
                
                
                841Construction
                    in progress
                
                
                1,163
                
                
                
                1,183
                
                
                
                1,24727,175
                
                
                
                27,446
                
                
                
                30,141Less:
                    accumulated depreciation
                
                
                (3,828
                )
                
                
                (3,438
                )
                
                
                (3,284
                )$
                23,347
                
                
                $
                24,008
                
                
                $
                26,857
 
 Depreciation
        expense for the 2003 year-to-date periods ended September 30, June 30 and
        March
        31, was $1,393, $954 and $525, respectively.
 F-37
 
 8.      
GOODWILL
        AND INTANGIBLE ASSETS
  At
        December 31, 2005, 2004 and 2003, the gross and net amounts of intangible
        assets, accumulated amortization and related amortization expense
        were:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Amortized
                    intangibles:Electric
                    power sales contracts - gross
                
                $
                10,754
                
                
                $
                10,754
                
                
                $
                12,255Water
                    rights - gross
                
                
                321
                
                
                
                344
                
                
                
                36511,075
                
                
                
                11,098
                
                
                
                12,620Less:
                    accumulated amortization
                
                
                (5,178
                )
                
                
                (3,614
                )
                
                
                (2,178
                )Electric
                    power sales contracts – net
                
                $
                5,897
                
                
                $
                7,484
                
                
                $
                10,442Goodwill
                
                $
                227
                
                
                $
                227
                
                
                $
                227
  Electric
        power sales contracts are being amortized over their duration on a straight-line
        basis.  As of December 31, 2005, the weighted average remaining life
        of electric power sales contracts was 6 years with the shortest remaining
        duration being 1 year and the longest remaining duration being 19
        years.  For the years ended December 31, 2005, 2004 and 2003,
        amortization expense was $1,564, $1,674 and $2,010, respectively, which is
        included in cost of revenues. The Fund expects to record amortization expense
        during the next five years as follows:
  Year
                    EndedDecember
                    31,2006
                
                $
                1,2732007
                
                
                1,1762008
                
                
                1,1232009
                
                
                9622010
                
                
                962
 
 Quarterly
        gross and net amounts of intangible assets and related amortization expense
        were
        as follows (unaudited):
 
 2005September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Amortized
                    intangibles:Electric
                    power sales contracts - gross
                
                $
                10,754
                
                
                $
                10,754
                
                
                $
                10,754Water
                    rights - gross
                
                
                344
                
                
                
                344
                
                
                
                34411,098
                
                
                
                11,098
                
                
                
                11,098Less:
                    accumulated amortization
                
                
                (4,787
                )
                
                
                (4,396
                )
                
                
                (4,005
                )Electric
                    power sales contracts – net
                
                $
                6,311
                
                
                $
                6,702
                
                
                $
                7,093Goodwill
                
                $
                227
                
                
                $
                227
                
                
                $
                227
 
 Amortization
        expense for the 2005 year-to-date periods ended September 30, June 30 and
        March
        31, was $1,173, $782 and $391, respectively.
  F-38
  2004September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Amortized
                    intangibles:Electric
                    power sales contracts - gross
                
                $
                12,255
                
                
                $
                12,255
                
                
                $
                12,255Water
                    rights - gross
                
                
                365
                
                
                
                365
                
                
                
                36512,620
                
                
                
                12,620
                
                
                
                12,620Less:
                    accumulated amortization
                
                
                (3,441
                )
                
                
                (3,020
                )
                
                
                (2,599
                )Electric
                    power sales contracts – net
                
                $
                9,179
                
                
                $
                9,600
                
                
                $
                10,021Goodwill
                
                $
                227
                
                
                $
                227
                
                
                $
                227
  Amortization expense for the 2004 year-to-date periods
          ended
          September 30, June 30 and March 31, was $1,263, $842 and $421,
          respectively.
 2003September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Amortized
                    intangibles:Electric
                    power sales contracts - gross
                
                $
                14,076
                
                
                $
                14,076
                
                
                $
                14,076Water
                    rights - gross
                
                
                462
                
                
                
                462
                
                
                
                46214,538
                
                
                
                14,538
                
                
                
                14,538Less:
                    accumulated amortization
                
                
                (1,676
                )
                
                
                (1,173
                )
                
                
                (670
                )Electric
                    power sales contracts – net
                
                $
                12,862
                
                
                $
                13,365
                
                
                $
                13,868Goodwill
                
                $
                227
                
                
                $
                2,732
                
                
                $
                2,732
 
 Amortization
        expense for the 2003 year-to-date periods ended September 30, June 30 and
        March
        31 was $1,508, $1,005 and $503, respectively.
 
 
 **9.   
           ACCUMULATED OTHER COMPREHENSIVE LOSS**
 
 The
        Fund’s other comprehensive loss,which
        is
        reported in the accompanying consolidated statement of operations
        consists of net income (loss), foreign currency translation gains and losses
        and
        unrealized gains and losses on investment in ZAP securities.
 
 The
        cumulative foreign currency translation loss was $7,772, $8,255 and $8,545
        and
        cumulative unrealized gain (loss) on ZAP securities was ($16), $236 and $124
        as
        of December 31, 2005, 2004 and 2003, respectively.  The components of
        other comprehensive loss for the 2005, 2004 and 2003 quarters were as follows
        (unaudited):
  Foreign
                    Currency
                
                
                Unrealized
                
                
                Total
                    AccumulatedTranslation
                
                
                Gain
                    (Loss)
                
                
                Other
                    ComprehensiveLoss
                
                
                on
                    ZAP Securities
                
                
                LossAt
                    March 31, 2003, restated
                
                $
                (8,253
                )
                
                $
                77
                
                
                $
                (8,176
                )At
                    June 30, 2003, restated
                
                
                (8,618
                )
                
                
                411
                
                
                
                (8,207
                )At
                    September 30, 2003, restated
                
                
                (8,729
                )
                
                
                562
                
                
                
                (8,167
                )At
                    March 31, 2004, restated
                
                
                (8,536
                )
                
                
                146
                
                
                
                (8,390
                )At
                    June 30, 2004, restated
                
                
                (8,639
                )
                
                
                2,041
                
                
                
                (6,598
                )At
                    September 30, 2004, restated
                
                
                (8,644
                )
                
                
                430
                
                
                
                (8,214
                )At
                    March 31, 2005, restated
                
                
                (7,737
                )
                
                
                (45
                )
                
                
                (7,782
                )At
                    June 30, 2005, restated
                
                
                (7,886
                )
                
                
                (607
                )
                
                
                (8,493
                )At
                    September 30, 2005, restated
                
                
                (7,747
                )
                
                
                (35
                )
                
                
                (7,782
                )
  F-39
 
 **10.       INVESTMENTS**
 
 The
        Fund’s investment includes a 30.4% non-controlling interest in RUK, which is
        accounted for under the equity method, and an investment in ZAP
        Inc.  The investment in ZAP is accounted for as available-for-sale
        securities.
  **United
        Kingdom Landfill Gas Projects**
 
 On
        May
        26, 1999, RUK was formed as a New Jersey limited liability company and was
        re-domiciled to Delaware on December 24, 2002. The business of RUK is the
        extraction of methane-containing gas from landfill sites in England, Scotland
        and Wales and the use of that gas as fuel for generating electricity and
        the
        sale of that electricity.
 
 On
        June
        30, 1999, Trust V contributed $16.7 million to RUK; and RUK’s wholly owned
        subsidiary, Ridgewood UK Ltd. (“UK Ltd.”), a limited company registered in
        England and Wales, purchased from CLP Envirogas, Ltd. (formerly Combined
        Landfill Projects, Ltd.) six landfill gas power plants located in the United
        Kingdom.  At the time of the purchase, UK Ltd. and CLP Envirogas, Ltd.
        also agreed the terms on which UK Ltd. would purchase additional projects
        then
        under development by CLP Envirogas, Ltd. should such projects be successfully
        developed.
 
 In
        2001,
        the Fund contributed $5.8 million to RUK in return for an equity share of
        30.4%
        of RUK.  During the three-month period ended March 31, 2001, UK Ltd.
        purchased an additional four projects.  On October 16, 2001, UK Ltd.,
        through the issuance of approximately 24% of its shares and the payment of
        $2,000 cash, 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 certain landfill gas
        projects (the “UK Merger”).  As a result of the UK Merger, UK Ltd.
        acquired the ability to develop and operate landfill gas-fueled electricity
        generating facilities in the UK as well as the development rights to a number
        of
        such projects.  The seller in the UK Merger was Arbutus Energy Ltd.
        (Jersey) (“Arbutus”) who became the minority interest holder of UK Ltd.
        following the UK Merger.  UK Ltd. was renamed CLPE Holdings Ltd.
        (“CLP”) in 2001.
 
 In
        the UK
        Merger, UK Ltd. received plant and equipment valued at $4,200, a 50% equity
        interest in a landfill gas electricity generation business based in Spain
        valued
        at $744, cash of $454 and other assets of $1,000.  UK Ltd. also
        assumed liabilities of $3,000.  UK Ltd. assigned a value of $6,781 to
        the electricity sales contracts and other intangible assets acquired which
        are
        being amortized over the remaining life of the underlying electricity sales
        contracts.
 
 As
        part
        of the UK Merger, RUK also acquired a 50% ownership in each of CLP Organogas
        SL  located in Seville, Spain and CLP Envirogas, SL, a management and
        development services company also located in Seville, Spain (collectively,
        the
“Spanish Business”). Effective January 1, 2003 RUK transferred its interest in
        the Spanish Business to Arbutus in return for a portion of the minority interest
        in CLP then held by Arbutus.  As a result of the transaction, RUK
        increased its ownership in CLP from 76% to 88%.
 
 Beginning
        in 2002, RUK began to develop sites capable of qualifying for the UK’s Renewable
        Obligation incentive program (“RO”). The RO program requires electricity
        suppliers serving end-users in the UK to obtain renewable obligation
        certificates (“ROCs”) to demonstrate that a minimum portion of their electricity
        supplied was generated by producers meeting the qualifications of the RO.
        In
        order to fund the development and construction of these projects, RUK entered
        into a series of agreements with affiliated entities that agreed to provide
        financing.  The affiliated entities providing this funding, Ridgewood
        Renewable PowerBank LLC, Ridgewood Renewable PowerBank II LLC, Ridgewood
        Renewable PowerBank III LLC and Ridgewood Renewable PowerBank IV LLC
        (collectively the “PowerBank Funds”), are managed by RRP which is also the
        managing member of RUK, Trust V and the Fund.  Terms of the agreements
        between RUK and each of the PowerBank Funds are substantially the same and
        each
        provides for the PowerBank Funds to make construction advances to RUK in
        exchange for interest during construction and streams of fixed and variable
        lease payments once the financed projects go into operation (the “PowerBank
        Arrangements”).  At December 31, 2004 and 2003, RUK had received
        construction advances of $12,100 and $41,474, respectively, from the PowerBank
        Funds for the purpose of developing additional projects.
 
 F-40
 
 Summarized
        balance sheet data for RUK at December 31, 2005, 2004 and 2003 is as
        follows:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Current
                    assets
                
                $
                18,632
                
                
                $
                31,013
                
                
                $
                38,544Non-current
                    assets
                
                
                65,758
                
                
                
                69,329
                
                
                
                53,752Total
                    assets
                
                $
                84,390
                
                
                $
                100,342
                
                
                $
                92,296Current
                    liabilities
                
                $
                15,449
                
                
                $
                10,556
                
                
                $
                11,691Non-current
                    liabilities
                
                
                68,204
                
                
                
                81,372
                
                
                
                66,447Minority
                    interest
                
                
                362
                
                
                
                1,344
                
                
                
                2,028Members’
                    equity
                
                
                375
                
                
                
                7,070
                
                
                
                12,130Liabilities
                    and members’ equity
                
                $
                84,390
                
                
                $
                100,342
                
                
                $
                92,296Fund
                    share of RUK equity
                
                $
                114
                
                
                $
                2,149
                
                
                $
                3,687
 
 Summarized
        statements of operations data for RUK for the years ended December 31, 2005,
        2004 and 2003 is as follows:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Revenues
                
                $
                32,359
                
                
                $
                22,878
                
                
                $
                13,729Cost
                    of revenues
                
                
                29,326
                
                
                
                20,295
                
                
                
                13,447Other
                    expenses
                
                
                5,774
                
                
                
                4,880
                
                
                
                2,290Total
                    expenses
                
                
                35,100
                
                
                
                25,175
                
                
                
                15,737Net
                    loss
                
                $
                (2,741
                )
                
                $
                (2,297
                )
                
                $
                (2,008
                )Fund
                    share of losses in RUK
                
                $
                (833
                )
                
                $
                (699
                )
                
                $
                (610
                )
 
 Quarterly
        summarized statements of operations data for RUK is as follows
        (unaudited):
 
 Nine
                    months ended September 30,
                
                
                Three
                    months ended September 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                23,807
                
                
                $
                16,135
                
                
                $
                9,314
                
                
                $
                8,176
                
                
                $
                5,639
                
                
                $
                3,338Cost
                    of revenues
                
                
                21,331
                
                
                
                14,604
                
                
                
                9,468
                
                
                
                7,895
                
                
                
                5,321
                
                
                
                3,417Other
                    expenses
                
                
                3,874
                
                
                
                3,176
                
                
                
                1,562
                
                
                
                1,453
                
                
                
                939
                
                
                
                428Total
                    expenses
                
                
                25,205
                
                
                
                17,780
                
                
                
                11,030
                
                
                
                9,348
                
                
                
                6,260
                
                
                
                3,845Net
                    loss
                
                $
                (1,398
                )
                
                $
                (1,645
                )
                
                $
                (1,716
                )
                
                $
                (1,172
                )
                
                $
                (621
                )
                
                $
                (507
                )Fund
                    share of losses in RUK
                
                $
                (425
                )
                
                $
                (500
                )
                
                $
                (522
                )
                
                $
                (356
                )
                
                $
                (189
                )
                
                $
                (154
                )
  F-41
  Six
                    months ended June 30,
                
                
                Three
                    months ended June 30,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                15,631
                
                
                $
                10,496
                
                
                $
                5,976
                
                
                $
                8,796
                
                
                $
                5,478
                
                
                $
                3,184Cost
                    of revenues
                
                
                13,436
                
                
                
                9,283
                
                
                
                6,051
                
                
                
                7,450
                
                
                
                4,563
                
                
                
                3,138Other
                    expenses
                
                
                2,421
                
                
                
                2,237
                
                
                
                1,134
                
                
                
                1,292
                
                
                
                1,438
                
                
                
                810Total
                    expenses
                
                
                15,857
                
                
                
                11,520
                
                
                
                7,185
                
                
                
                8,742
                
                
                
                6,001
                
                
                
                3,948Net (loss)
                    income
                
                $
                (226
                )
                
                $
                (1,024
                )
                
                $
                (1,209
                )
                
                $
                54
                
                
                $
                (523
                )
                
                $
                (764
                )Fund
                    share of (losses) income in RUK
                
                $
                (69
                )
                
                $
                (311
                )
                
                $
                (368
                )
                
                $
                16
                
                
                $
                (159
                )
                
                $
                (233
                )
  Three
                    months ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                6,835
                
                
                $
                5,018
                
                
                $
                2,792Cost
                    of revenues
                
                
                5,986
                
                
                
                4,720
                
                
                
                2,913Other
                    expenses
                
                
                1,129
                
                
                
                799
                
                
                
                324Total
                    expenses
                
                
                7,115
                
                
                
                5,519
                
                
                
                3,237Net
                    loss
                
                $
                (280
                )
                
                $
                (501
                )
                
                $
                (445
                )Fund
                    share of losses in RUK
                
                $
                (85
                )
                
                $
                (152
                )
                
                $
                (135
                )
 
 **ZAP**
 
 In
        1999,
        the Fund invested $2,100 in the shares of ZAP (formerly ZAPWorld.COM, Inc.
        and
        ZAP Power Systems, Inc.).  As part of the 678,808 share purchase, the
        Fund also received a warrant to purchase 571,249 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
        $2,000.  ZAP designs, assembles, manufactures and distributes personal
        electric vehicles.  ZAP's common stock is quoted on the OTC Bulletin
        Board under the symbol "ZAAP.OB".  In June 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 interest bearing promissory note (the "Ridgewood ZAP
        Note").
 
 On
        March
        1, 2002, ZAP filed a voluntary petition for reorganization under Chapter
        11 of
        the US Bankruptcy Code with the US Bankruptcy Court in Santa Rosa,
        California.  On or about July 1,
        2002,  the  Second  Amended  Plan for
        Reorganization  became  effective and the Ridgewood ZAP Note
        was converted  into 994,500 shares of ZAP common stock
        as  reorganized  (the  "Reorganized  ZAP
        Shares"). When issued, the Reorganized ZAP Shares were subject to restrictions
        on sales or transfers.  As part of the reorganization, Ridgewood ZAP
        also received warrants to purchase ZAP shares of which a portion was exercised
        as reflected below:
 
 Warrant
                    Series
                
                Maximum
                    purchase
                
                Initial
                    expiration
                  date
                
                Warrant
                    exercise
                  shares
                
                Exercise
                    Price Per
                  ShareB
                
                
                994,500
                
                6/30/2003
                
                
                994,500
                
                $
                1.07C
                
                
                994,500
                
                12/31/2004
                
                
                538,462
                
                $
                3.25D
                
                
                994,500
                
                6/30/2007
                
                
                -
                
                $
                -
  F-42
 
 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. During the second and
        third
        quarters of 2004, Ridgewood ZAP distributed approximately 772,300 shares
        of the
        Reorganized ZAP Shares with a market value of $2,100 to the Fund's shareholders
        and recorded a gain of $1,800. The transfer restrictions on approximately
        104,200 Reorganized ZAP Shares were removed in 2005 and the shares were sold
        in
        the first quarter of 2006.
 
 The
        expiration date of the Series B Warrants was extended by ZAP and in May 2004,
        Ridgewood ZAP exercised its rights under the Series B warrants to purchase
        approximately 995,000 shares at $1.07 per share.  The Fund sold the
        shares acquired through exercise of the Series B Warrants in a series of
        transactions between July 2004 and November 2004 at an average selling price
        (before transaction costs) of $1.50 per share.  Ridgewood ZAP
        exercised a portion of the Series C warrants in December 2004, with the purchase
        of approximately 538,000 shares at $3.25 per share.  The Fund sold the
        shares acquired through the exercise of the Series C Warrants in a series
        of
        transactions in 2005 at an average price (before transaction costs) of $1.36
        per
        share. The remaining approximately 457,000 of the Series C warrants and 994,500
        of the Series D warrants have not been exercised as of the date of filing
        this
        report.
 
 The
        amount of net unrealized (loss) gain on available-for-sale securities included
        in other comprehensive income for the years ended December 31, 2005, 2004
        and
        2003 is ($248), $110 and $45, respectively. Other
        comprehensive loss reclassification adjustments for realized gains included in
        net income on the sale of available-for-sale securities for the years ended
        December 31, 2004 and 2003 are $126 and $80,
        respectively.
 
 **11.    
        LONG-TERM DEBT**
 
 Following
        is a summary of long-term debt at December 31, 2005, 2004 and 2003:
  2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Total
                    long-term debt
                
                $
                3,799
                
                
                $
                4,736
                
                
                $
                9,606-
                    Sinai
                
                
                2,259
                
                
                
                2,252
                
                
                
                2,312-
                    REFI
                
                
                676
                
                
                
                1,147
                
                
                
                1,643-
                    US Hydro
                
                
                864
                
                
                
                1,337
                
                
                
                5,651Current
                    maturity
                
                $
                1,190
                
                
                $
                3,234
                
                
                $
                7,130-
                    Sinai
                
                
                217
                
                
                
                2,252
                
                
                
                2,312-
                    REFI
                
                
                540
                
                
                
                510
                
                
                
                505-
                    US Hydro
                
                
                433
                
                
                
                472
                
                
                
                4,313Long-term
                    portion
                
                $
                2,609
                
                
                $
                1,502
                
                
                $
                2,476-
                    Sinai
                
                
                2,042
                
                
                
                -
                
                
                
                --
                    REFI
                
                
                136
                
                
                
                637
                
                
                
                1,138-
                    US Hydro
                
                
                431
                
                
                
                865
                
                
                
                1,338
  F-43
  Following
        is a summary of quarterly long-term debt (unaudited):
 
 2005September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Total
                    long-term debt
                
                $
                4,187
                
                
                $
                4,351
                
                
                $
                4,685-
                    Sinai
                
                
                2,392
                
                
                
                2,316
                
                
                
                2,391-
                    REFI
                
                
                812
                
                
                
                934
                
                
                
                1,075-
                    US Hydro
                
                
                983
                
                
                
                1,101
                
                
                
                1,219Less
                    – Current maturity
                
                $
                1,271
                
                
                $
                1,178
                
                
                $
                3,391-
                    Sinai
                
                
                287
                
                
                
                192
                
                
                
                2,391-
                    REFI
                
                
                542
                
                
                
                534
                
                
                
                538-
                    US Hydro
                
                
                442
                
                
                
                452
                
                
                
                462Long-term
                    portion
                
                $
                2,916
                
                
                $
                3,173
                
                
                $
                1,294-
                    Sinai
                
                
                2,105
                
                
                
                2,124
                
                
                
                --
                    REFI
                
                
                270
                
                
                
                400
                
                
                
                537-
                    US Hydro
                
                
                541
                
                
                
                649
                
                
                
                7572004September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Total
                    long-term debt
                
                $
                4,931
                
                
                $
                5,194
                
                
                $
                5,454-
                    Sinai
                
                
                2,231
                
                
                
                2,252
                
                
                
                2,259-
                    REFI
                
                
                1,245
                
                
                
                1,369
                
                
                
                1,503-
                    US Hydro
                
                
                1,455
                
                
                
                1,573
                
                
                
                1,692Less
                    – Current maturity
                
                $
                3,201
                
                
                $
                3,222
                
                
                $
                3,233-
                    Sinai
                
                
                2,231
                
                
                
                2,252
                
                
                
                2,259-
                    REFI
                
                
                498
                
                
                
                498
                
                
                
                501-
                    US Hydro
                
                
                472
                
                
                
                472
                
                
                
                473Long-term
                    portion
                
                $
                1,730
                
                
                $
                1,972
                
                
                $
                2,221-
                    Sinai
                
                
                -
                
                
                
                -
                
                
                
                --
                    REFI
                
                
                747
                
                
                
                871
                
                
                
                1,002-
                    US Hydro
                
                
                983
                
                
                
                1,101
                
                
                
                1,2192003September
                    30
                
                
                June
                    30
                
                
                March
                    31(Restated)
                
                
                (Restated)
                
                
                (Restated)Total
                    long-term debt
                
                $
                10,184
                
                
                $
                10,751
                
                
                $
                11,341-
                    Sinai
                
                
                2,275
                
                
                
                2,316
                
                
                
                2,436-
                    REFI
                
                
                1,897
                
                
                
                2,060
                
                
                
                2,167-
                    US Hydro
                
                
                6,012
                
                
                
                6,375
                
                
                
                6,738Less
                    – Current maturity
                
                $
                7,338
                
                
                $
                7,633
                
                
                $
                8,024-
                    Sinai
                
                
                2,275
                
                
                
                2,316
                
                
                
                2,436-
                    REFI
                
                
                506
                
                
                
                516
                
                
                
                542-
                    US Hydro
                
                
                4,557
                
                
                
                4,801
                
                
                
                5,046Long-term
                    portion
                
                $
                2,846
                
                
                $
                3,118
                
                
                $
                3,317-
                    Sinai
                
                
                -
                
                
                
                -
                
                
                
                --
                    REFI
                
                
                1,391
                
                
                
                1,544
                
                
                
                1,625-
                    US Hydro
                
                
                1,455
                
                
                
                1,574
                
                
                
                1,692
 
 The
        Sinai
        Environmental Services S.A.E. (“Sinai”) loan which is secured by a part of its
        assets bears interest at 11.0% per annum and is non-recourse to the
        Fund.  A provision of the loan restricts Sinai from paying dividends
        to its shareholders or obtaining credit from other lenders. The loan was
        in
        default prior to the acquisition of Sinai by NEH and remained in default
        through
        the second quarter of 2005. In the second quarter of 2005, the lender and
        Sinai
        entered into a revised agreement that included in its terms a modified payment
        schedule. The revised terms provide for increasing monthly payments over
        six
        years starting at 172,000 Egyptian pounds and increasing to 357,000 Egyptian
        pounds (or approximately $29 to $61 at loan inception exchange rates), including
        interest, and having a final maturity date of May 1,
        2011.    As part of the 2005 settlement, the lender agreed
        to suspend, from the time of the settlement, the obligation of Sinai to repay
        1
        million Egyptian pounds (approximately $176 at December 31, 2005) out of
        the
        amount outstanding.  If Sinai makes all the scheduled payments set out in
        the modified payment schedule, the suspension will become permanent and the
        1
        million Egyptian pounds forgiven.  In case Sinai fail to make all scheduled
        payments on time, the suspension will be revoked and the total of the then
        remaining principal payments required will be increased by 1 million Egyptian
        pounds.  As of the filling date, Sinai has been in compliance with the
        revised agreement since the agreement was entered into.
 
 F-44
  During
        the third quarter of 2002, Ridgewood Egypt For Infrastructure, LLC (Egypt)
        (“REFI”) executed a term loan agreement with its principal bank which is secured
        by certain plant assets of REFI. The bank provided a loan of 12,500,000 Egyptian
        pounds (approximately $2,688) and is being repaid in quarterly principal
        installments of 781,000 Egyptian pounds (approximately $168) starting June
        2003
        through final maturity at March 31, 2007. Outstanding borrowings bear interest
        at the bank’s medium term loan rate plus 0.5% (12.5% at December 31, 2005, 2004
        and 2003).
 
 Five
        of
        US Hydro’ hydro-electric power plants are financed by a term loan containing
        rights for the borrower to re-set interest rates from
        time-to-time.  The effective interest rates were 5.58%, 4.13% and
        2.91% at December 31, 2005, 2004 and 2003, respectively. This credit facility
        is
        collateralized by five hydroelectric plants and notes receivable owned by
        US
        Hydro. At December 31, 2005 and 2004, the carrying value of hydroelectric
        plants
        and notes receivable was higher than the face value of the loan.  At
        December 31, 2003, the carrying value of hydroelectric plants and notes
        receivable was less than the face of the loan by $1,092.  As of the
        filing date, US Hydro is in compliance with all material provisions of the
        term
        loan.
 
 During
        the first quarter of 2003, US Hydro undertook to renegotiate TCID payment
        obligations and a settlement was reached under which the TCID made a $4,000
        cash
        payment to US Hydro in satisfaction of its obligations.  The proceeds of
        $4,000 was applied to the outstanding balance of the term loan and the parties
        agreed to amend the term loan agreement, providing for a revised amortization
        of
        principal taking into account settlement with TCID and the $4,000
        received.
 
 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.  US Hydro is
        also required to make an additional annual payment of 50% of excess cash
        flow,
        as defined.  No additional payments were required for the years ended
        December 31, 2005, 2004 and 2003.
 
 Scheduled
        principal repayments of the Fund’s long-term debt at December 31, 2005 are as
        follows:
  2006
                
                $
                1,1902007
                
                
                8522008
                
                
                3722009
                
                
                4652010
                
                
                624Thereafter
                
                
                296Total
                
                $
                3,799
 F-45
 
 **12.    
        COMMITMENTS AND CONTINGENCIES**
 
 The
        facility at Union Falls has leased the site under a non-cancelable long-term
        lease which terminates in 2024. Rent expense at this site for the years ended
        December 31, 2005, 2004 and 2003 was $185, $170 and $160,
        respectively.  The facility of US Hydro at the Box Canyon dam in
        Siskiyou County, California is owned subject to a ground lease which US Hydro
        treats for financial reporting purposes as an operating lease.  The
        lease terminates on December 31, 2010, at which time US Hydro is obligated
        to
        transfer the facility at the site to the Siskiyou County Flood Control and
        Water
        Conservation District.  The lease payment for Box Canyon was $500 for
        each of the years ended December 31, 2005, 2004 and 2003,
        respectively.
 
 Minimum
        lease payments at December 31, 2005 are as follows:
 
 2006
                
                $
                6952007
                
                
                7002008
                
                
                7102009
                
                
                7212010
                
                
                732Thereafter
                
                
                4,764Total
                
                $
                8,322
 
 The
        Fund
        has certain other leases that require payments based upon a percentage of
        the
        annual gross revenue of the respective 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, 2005,
        2004 and 2003 was $10, $6 and $7, respectively.
 
 In
        accordance with Egyptian company law, the Egypt projects is required to record
        5% of annual net profits to a statutory reserve and 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 $97, $87 and $51
        for
        the years ended December 31, 2005, 2004 and 2003, respectively.
 
 The
        Fund
        is subject to legal proceedings involving ordinary and routine claims related
        to
        its business.  The ultimate legal and financial ability with respect
        to such matters cannot be estimated with certainty and requires the use of
        estimates in recording liabilities for potential litigation
        settlements.  Estimates for losses from litigation are disclosed if
        considered reasonably possible and accrued if considered probable after
        consultation with outside counsel.  If estimates of potential losses
        increase or the related facts and circumstances change in the future, the
        Fund
        may be required to record additional litigation expense.
 
 
 **13.  
          OTHER LIABILITIES**
 
 The
        Fund’s Egypt projects have an arrangement with a consultant that provides
        marketing, construction and management services in Egypt.  The
        consultant receives, in total, a development fee of 3% of the capital cost
        of
        the completed projects, an annual management fee of the greater of 0.3% of
        the
        capital cost of completed projects and $180, plus reimbursement of out-of-pocket
        costs incurred in performing its duties under the agreement.  The
        consultant may also receive incentive payments based on the performance of
        REFI.  The agreement has a term of one year and is automatically
        renewed annually. The agreement may be terminated by either party upon written
        notice.
  F-46
 
 NEH
        had
        additional consulting arrangements with two individuals for services related
        to
        its investment in Egypt.  In both cases, NEH has reached agreements
        with the individuals settling the obligations of the parties with respect
        to the
        consulting agreements by agreeing to terminate the arrangements in exchange
        for
        a series of payments.  No future services are to be provided by the
        individuals involved.
 
 In
        the
        case of the first settlement, on November 21, 2003, NEH agreed to make a
        single
        payment to the party of $281, and to make monthly installment payments of
        $8,
        until June 1, 2013.  During the fourth quarter of 2003 the Fund
        recorded a liability of $568 to reflect this obligation.
 
 In
        the
        case of the second settlement, on April 7, 2005, NEH agreed with the party
        to
        make quarterly payments of $30 for so long as the Egypt projects remain
        operational.  In the event that the Egypt projects are sold, an amount
        equal to the present value of the subsequent ten-years of payments would
        be made
        in settlement of the remaining obligation.  NEH had a liability of
        $906 at December 31, 2005 to reflect this obligation.
 
 Schedule
        of future discounted principal payments as of December 31, 2005 are as
        follows:
  2006
                
                $
                752007
                
                
                832008
                
                
                922009
                
                
                1012010
                
                
                112Thereafter
                
                
                917Total
                
                $
                1,380
  **14.  
           INCOME TAXES**
 
 The
        components of Income (loss) before provision for income taxes for the years
        ended December 31, 2005, 2004 and 2003 are as follows:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)United
                    States
                
                $
                (2,311
                )
                
                $
                1,346
                
                
                $
                (9,077
                )Foreign
                
                
                (1,510
                )
                
                
                (2,865
                )
                
                
                (4,458
                )$
                (3,821
                )
                
                $
                (1,519
                )
                
                $
                (13,535
                )
 
 The
        foreign loss includes $677, $2,166 and $3,847 from NEH for the years ended
        December 31, 2005, 2004 and 2003 that is subject to Egyptian tax holiday,
        and
        foreign loss of $833, $699 and $611 from RUK which is reported net of tax
        effect
        consistent with the equity method of accounting.
 
 The
        provision for income taxes for the years ended December 31, 2005, 2004 and
        2003
        consists of:
 
 2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)CurrentState
                
                $
                305
                
                
                $
                176
                
                
                $
                264DeferredFederal
                
                
                (85
                )
                
                
                (882
                )
                
                
                (192
                )State
                
                
                (82
                )
                
                
                (67
                )
                
                
                (2,581
                )Income
                    tax (expense) benefit
                
                $
                138
                
                
                $
                (773
                )
                
                $
                (2,509
                )
 
 F-47
 
 Deferred
        income taxes reflect the tax effects of temporary differences between the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes. The Components of the Fund’s deferred
        income tax assets and liabilities at December 31, 2005, 2004 and 2003 are
        as
        follows:
  2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Deferred
                    tax assetNOL
                    carry-forward - non-current
                
                $
                983
                
                
                $
                1,413
                
                
                $
                24Notes
                    Receivable - current
                
                
                429
                
                
                
                443
                
                
                
                1,3801,412
                
                
                
                1,856
                
                
                
                1,404Deferred
                    tax liabilitiesDepreciation
                    - non-current
                
                
                (2,498
                )
                
                
                (3,109
                )
                
                
                (3,607
                )Net
                    deferred tax liabilities
                
                $
                (1,086
                )
                
                $
                (1,253
                )
                
                $
                (2,203
                )
 
 The
        Fund’s effective tax rate differs from the statutory federal income tax rate for
        the years ended December 31, 2005, 2004 and 2003 as follows:
 
 2005
                
                
                2004
                
                
                2003US
                    federal income taxes at the statutory rate
                
                
                0
                %
                
                
                0
                %
                
                
                0
                %Income
                    (loss) subject to tax at the US Hydrolevel
                    (at statutory rate)
                
                
                3
                %
                
                
                44
                %
                
                
                14
                %State
                    taxes
                
                
                -3
                %
                
                
                -3
                %
                
                
                0
                %Other
                
                
                -4
                %
                
                
                5
                %
                
                
                0
                %Fund's
                    effective tax rate
                
                
                -4
                %
                
                
                46
                %
                
                
                14
                %
 
 At
        December 31, 2005, 2004 and 2003 the Fund had a net operating loss carry
        forward (tax effected) for federal purposes of $1,422, $1,868 and $24,
        respectively which will be expiring from 2023 through 2025.  The
        Fund
        believes it is more likely than not that it will realize the benefit of its
        net
        operating losses. Accordingly, a valuation allowances has not been recorded
        against the related deferred tax asset.The Fund’s ability to realize the
        benefit of its net operating losses may be limited should US Hydro undergo
        an
        ownership change within the meaning of IRC Section 382.
 
 **15.  
          TRANSACTIONS WITH MANAGING SHAREHOLDER AND
        AFFILIATES**
 
 The
        Fund
        operates pursuant to the terms of a management agreement (“Management
        Agreement”).  Under the terms of the Management Agreement, the Managing
        Shareholder provides certain management, administrative and advisory services,
        and office space to the Fund.  In return, the Fund is obligated to pay the
        Managing Shareholder an annual management fee equal to 2.5% of the total
        contributed capital of the Fund, or $1,645 annually, as compensation for
        such
        services. The management fee is to be paid in monthly installments and, to
        the
        extent that the Fund does not pay the management fee on a timely basis, the
        Fund
        accrues interest at an annual rate of 10% on the unpaid balance.
 
 The
        Managing Shareholder waived its right to receive its management fee for 2005.
        For 2004 and 2003, the Managing Shareholder waived 50% of the management
        fee due
        in such years (or $823 in each year). The Fund recorded the waived management
        fees as deemed capital contributions in the periods in which the fees
        accrued.  The shareholders of the Fund other than the Managing Shareholder
        were allocated 99% of each contribution and the Managing Shareholder was
        allocated 1% so that the amount of the contribution allocated offset the
        amount
        of the expense initially accrued. For the years ended December 31, 2004 and
        2003, the Fund made management fee payments to the Managing Shareholder of
        $317
        and $150, respectively.  Unpaid management fees that
        accrued during the years ended December 31, 2004, 2003 and 2002 of $506,
        $673
        and $446, respectively, were forgiven by the Managing Shareholder in the
        fourth
        quarter of 2005 and were recorded as capital contributions at that time in
        the
        manner described above.
 
 F-48
  For
        the
        years ended December 31, 2005, 2004 and 2003, the Fund accrued interest expense
        of $262, $187 and $131, respectively, on accrued but unpaid management
        fees.  The interest accrued has been waived by the Managing Shareholder and
        recorded as capital contribution as waived.
 
 Under
        the
        Management Agreement with the Managing Shareholder, Ridgewood Power Management
        (“RPM”), an entity related to the Managing Shareholder through common ownership,
        provides management, purchasing, engineering, planning and administrative
        services to the projects operated by the Fund.  RPM charges the projects at
        its cost for these services and for the allocable amount of certain overhead
        items.  Allocations of costs are on the basis of identifiable direct costs
        or in proportion to amounts invested in projects managed by RPM.  During
        the years ended December 31, 2005, 2004 and 2003, RPM charged US Hydro $581,
        $489 and $432, respectively, for overhead items allocated in proportion to
        the
        amount invested in projects managed. In addition, RPM charged US Hydro $3,234,
        $2,968 and $2,962, respectively, for all of the direct operating and
        non-operating expenses incurred during such periods.
 
 Under
        the
        Declaration of Trust, the Managing Shareholder is entitled to receive,
        concurrently with the shareholders of the Fund other than the Managing
        Shareholder, 1% of all distributions from operations made by the Fund in
        a year
        until the shareholders have received distributions in that year equal to
        12% of
        their equity contribution.  Thereafter, the Managing Shareholder is
        entitled to receive 25% of the distributions for the remainder of the
        year.  The Managing Shareholders is entitled to receive 1% of the proceeds
        from dispositions of Fund property until the shareholders other than the
        Managing Shareholder, have received cumulative distributions equal to their
        original investment (“Payout”).  After Payout, the Managing Shareholder is
        entitled to receive 25% of all remaining distributions of the Fund. For each
        of
        the years ended December 31, 2005, 2004 and 2003, the Managing Shareholder
        received a distribution of $13.
 
 Income
        is
        allocated to the Managing Shareholder until the profits so allocated equal
        distributions to the Managing Shareholder. Thereafter, income is allocated
        among
        the shareholders other than the Managing Shareholder in proportion to their
        ownership of Investor Shares. If the Fund has net losses for a fiscal period,
        the losses are allocated 99% to the shareholders other than the Managing
        Shareholder and 1% to the Managing Shareholder, subject to certain limitations
        as set forth in the Declaration of Trust.  Amounts allocated to
        shareholders other than the Managing Shareholder are apportioned among them
        in
        proportion to their capital contributions.
 
 Under
        the
        terms of the Declaration of Trust, if the Adjusted Capital Account (as defined
        in the Declaration of Trust) of a shareholder other than the Managing
        Shareholder would become negative using General Allocations (as defined in
        the
        Declaration of Trust), losses and expenses will be allocated to the Managing
        Shareholder.  Should the Managing Shareholder’s Adjusted Capital Account
        become negative and items of income or gain occur, then such items of income
        or
        gain will be allocated entirely to the Managing Shareholder until such time
        as
        the Managing Shareholder’s Adjusted Capital Account becomes positive.  This
        mechanism does not change the allocation of cash, as discussed
        above.
 
 RRP
        purchased one investor share of the Fund for $83 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, entered into a Revolving Credit
        and
        Security Agreement with Wachovia Bank, National Association.  The
        agreement, as amended, allows the Managing Shareholder to obtain loans and
        letters of credit of up to $6,000 for the benefit of the trusts and funds
        that
        it manages.  As part of the agreement, the Fund agreed to limitations on
        its ability to incur indebtedness, and liens and to provide guarantees. The
        Managing Shareholder and Wachovia Bank agreed to extend the Managing
        Shareholder’s line of credit, through May 31, 2008.
 
 F-49
  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, 2005, 2004 and
        2003
        the Fund had outstanding payables and receivables as follows:
  December
                    31,
                
                
                December
                    31,2005
                
                
                2004
                
                
                2003
                
                
                2005
                
                
                2004
                
                
                2003Due
                    from
                
                
                Due
                    to(Restated)
                
                
                (Restated)
                
                
                
                
                
                (Restated)
                
                
                (Restated)Ridgewood
                    Power Management LLC
                
                $
                -
                
                
                $
                -
                
                
                $
                6
                
                
                $
                335
                
                
                $
                326
                
                
                $
                -Ridgewood
                    Renewable Power LLC
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                186
                
                
                
                2,314
                
                
                
                1,076Ridgewood
                    Electric Power Trust IV
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                71Ridgewood
                    Electric Power Trust V
                
                
                538
                
                
                
                1,305
                
                
                
                1,312
                
                
                
                -
                
                
                
                -
                
                
                
                -Ridgewood/Egypt
                    Fund
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                207
                
                
                
                270
                
                
                
                351United
                    Kingdom Landfill Gas Projects
                
                
                195
                
                
                
                262
                
                
                
                596
                
                
                
                -
                
                
                
                -
                
                
                
                -Lahontan
                    Hydropower
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                247Other
                    affiliates
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                153
                
                
                
                90
                
                
                
                147Total
                
                $
                733
                
                
                $
                1,567
                
                
                $
                1,914
                
                
                $
                881
                
                
                $
                3,000
                
                
                $
                1,892
  The
          Fund
          had the following quarterly outstanding payables and receivables, with
          the
          following affiliates (unaudited):
 2005September
                    30
                
                
                June
                    30
                
                
                March
                    31
                
                
                September
                    30
                
                
                June
                    30
                
                
                March
                    31Due
                    from
                
                
                Due
                    to(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Ridgewood
                    Power Management LLC
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                671
                
                
                $
                383
                
                
                $
                561Ridgewood
                    Renewable Power LLC
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,229
                
                
                
                2,769
                
                
                
                2,723Ridgewood
                    Electric Power Trust V
                
                
                520
                
                
                
                357
                
                
                
                1,835
                
                
                
                -
                
                
                
                -
                
                
                
                -Ridgewood/Egypt
                    Fund
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                231
                
                
                
                127
                
                
                
                270United
                    Kingdom Landfill Gas Projects
                
                
                270
                
                
                
                269
                
                
                
                265
                
                
                
                -
                
                
                
                -
                
                
                
                -Other
                    affiliates
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                105
                
                
                
                108
                
                
                
                91Total
                
                $
                790
                
                
                $
                626
                
                
                $
                2,100
                
                
                $
                4,236
                
                
                $
                3,387
                
                
                $
                3,645
  
 2004September
                    30
                
                
                June
                    30
                
                
                March
                    31
                
                
                September
                    30
                
                
                June
                    30
                
                
                March
                    31Due
                    from
                
                
                Due
                    to(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Ridgewood
                    Power Management LLC
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                30
                
                
                $
                11
                
                
                $
                55Ridgewood
                    Renewable Power LLC
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,100
                
                
                
                1,387
                
                
                
                1,252Ridgewood
                    Electric Power Trust IV
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                71
                
                
                
                71Ridgewood
                    Electric Power Trust V
                
                
                1,553
                
                
                
                1,396
                
                
                
                1,401
                
                
                
                -
                
                
                
                -
                
                
                
                -Ridgewood/Egypt
                    Fund
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                270
                
                
                
                270
                
                
                
                350United
                    Kingdom Landfill Gas Projects
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                89
                
                
                
                436
                
                
                
                790Other
                    affiliates
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                458
                
                
                
                210
                
                
                
                212Total
                
                $
                1,553
                
                
                $
                1,396
                
                
                $
                1,401
                
                
                $
                2,947
                
                
                $
                2,385
                
                
                $
                2,730
  
 F-50
  2003September
                    30
                
                
                June
                    30
                
                
                March
                    31
                
                
                September
                    30
                
                
                June
                    30
                
                
                March
                    31Due
                    from
                
                
                Due
                    to(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Ridgewood
                    Power Management LLC
                
                $
                127
                
                
                $
                127
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                273Ridgewood
                    Renewable Power LLC
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,020
                
                
                
                723
                
                
                
                279Ridgewood
                    Electric Power Trust IV
                
                
                -
                
                
                
                -
                
                
                
                8
                
                
                
                71
                
                
                
                71
                
                
                
                -Ridgewood
                    Electric Power Trust V
                
                
                1,507
                
                
                
                1,678
                
                
                
                1,346
                
                
                
                -
                
                
                
                -
                
                
                
                -Ridgewood/Egypt
                    Fund
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                348
                
                
                
                348
                
                
                
                348United
                    Kingdom Landfill Gas Projects
                
                
                235
                
                
                
                219
                
                
                
                219
                
                
                
                -
                
                
                
                -
                
                
                
                -Lahontan
                    Hydropower
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                254
                
                
                
                247
                
                
                
                -Other
                    affiliates
                
                
                51
                
                
                
                144
                
                
                
                219
                
                
                
                102
                
                
                
                96
                
                
                
                97Total
                
                $
                1,920
                
                
                $
                2,168
                
                
                $
                1,792
                
                
                $
                1,795
                
                
                $
                1,485
                
                
                $
                997
 
 **16.   
         FINANCIAL INFORMATION BY BUSINESS SEGMENT AND
        LOCATION**
 
 In
        2005,
        2004 and 2003, revenues were recorded from customers of US Hydro and Egypt
        projects. The financial statements of RUK and ZAP are not consolidated with
        those of the Fund and, accordingly, their revenues are not considered to
        be
        operating revenues.  For the years ended December 31, 2005, 2004 and
        2003, financial information by geographic location was as follows:
  2005
                
                
                2004
                
                
                2003US
                
                
                Egypt
                
                
                US
                
                
                Egypt
                
                
                US
                
                
                Egypt(Restated)
                
                
                (Restated)
                
                
                (Restated)
                
                
                (Restated)Total
                    assets
                
                $
                10,785
                
                
                $
                21,934
                
                
                $
                17,221
                
                
                $
                21,219
                
                
                $
                21,264
                
                
                $
                22,972Revenues
                
                
                5,539
                
                
                
                6,742
                
                
                
                5,096
                
                
                
                5,489
                
                
                
                5,845
                
                
                
                4,400
  The
        Fund
        has two customers which accounted for 70.3%, 76.8% and 80.6% of US sourced
        revenue in 2005, 2004 and 2003, respectively. The Fund has two customers
        which
        accounted for 18.0%, 19.5% and 17.7% of Egypt sourced revenue in 2005, 2004
        and
        2003, respectively.
  T he
        Fund
        manages and evaluates its operations in two reportable business segments:
        power
        generation and water desalinization.  These segments have been
        classified separately by the similarities in economic characteristics and
        customer base.   Common services shared by the business segments
        are allocated on the basis of identifiable direct costs, time records or
        in
        proportion to amount invested in projects managed by Ridgewood
        Management.
 
 The
        financial data for business segments for the years ended December 31, 2005,
        2004
        and 2003 are as follows (unaudited):
  F-51
 
 Power2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Revenues
                
                $
                5,539
                
                
                $
                5,096
                
                
                $
                5,845Depreciation
                    and amortization
                
                
                1,597
                
                
                
                1,709
                
                
                
                2,049Gross
                    profit
                
                
                2,440
                
                
                
                1,968
                
                
                
                2,442Impairment
                    of goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433Interest
                    income
                
                
                83
                
                
                
                10
                
                
                
                53Interest
                    expense
                
                
                56
                
                
                
                86
                
                
                
                204Income
                    tax expense (benefit)
                
                
                138
                
                
                
                (773
                )
                
                
                (2,509
                )Total
                    assets
                
                
                10,785
                
                
                
                17,221
                
                
                
                21,264Capital
                    expenditures
                
                
                -
                
                
                
                2
                
                
                
                -Goodwill
                
                
                227
                
                
                
                227
                
                
                
                227Water2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Revenues
                
                $
                6,742
                
                
                $
                5,489
                
                
                $
                4,400Depreciation
                    and amortization
                
                
                2,173
                
                
                
                2,022
                
                
                
                1,831Gross
                    profit
                
                
                1,120
                
                
                
                443
                
                
                
                364Interest
                    income
                
                
                7
                
                
                
                9
                
                
                
                5Interest
                    expense
                
                
                677
                
                
                
                604
                
                
                
                656Total
                    assets
                
                
                21,934
                
                
                
                21,219
                
                
                
                22,972Capital
                    expenditures
                
                
                2,038
                
                
                
                370
                
                
                
                315Corporate2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Interest
                    income
                
                $
                6
                
                
                $
                1
                
                
                $
                -Interest
                    expense
                
                
                262
                
                
                
                186
                
                
                
                132Equity
                    in loss from RUK
                
                
                833
                
                
                
                699
                
                
                
                610Investment
                    in RUK
                
                
                114
                
                
                
                2,149
                
                
                
                3,687Total
                    assets
                
                
                1,356
                
                
                
                449
                
                
                
                2,872Consolidated2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)Revenues
                
                $
                12,281
                
                
                $
                10,585
                
                
                $
                10,245Depreciation
                    and amortization
                
                
                3,770
                
                
                
                3,731
                
                
                
                3,880Gross
                    profit
                
                
                3,560
                
                
                
                2,411
                
                
                
                2,806Impairment
                    of goodwill
                
                
                -
                
                
                
                -
                
                
                
                6,433Interest
                    income
                
                
                96
                
                
                
                20
                
                
                
                58Interest
                    expense
                
                
                995
                
                
                
                876
                
                
                
                992Income
                    tax expense (benefit)
                
                
                138
                
                
                
                (773
                )
                
                
                (2,509
                )Total
                    assets
                
                
                34,075
                
                
                
                38,889
                
                
                
                47,108Capital
                    expenditures
                
                
                2,038
                
                
                
                372
                
                
                
                315Goodwill
                
                
                227
                
                
                
                227
                
                
                
                227Equity
                    in loss from RUK
                
                
                833
                
                
                
                699
                
                
                
                610Investment
                    in RUK
                
                
                114
                
                
                
                2,149
                
                
                
                3,687
  F-52
 
 Quarterly
        financial data for business segments are as follows
        (unaudited):
 Power
                  
                  
                  PowerNine
                      Months Ended September 30,
                  
                  
                  Three
                      Months Ended September 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  4,320
                  
                  
                  $
                  4,122
                  
                  
                  $
                  4,758
                  
                  
                  $
                  712
                  
                  
                  $
                  853
                  
                  
                  $
                  861Gross
                      profit
                  
                  
                  2,045
                  
                  
                  
                  1,742
                  
                  
                  
                  2,410
                  
                  
                  
                  (53
                  )
                  
                  
                  65
                  
                  
                  
                  63Total
                      assets
                  
                  
                  12,020
                  
                  
                  
                  12,158
                  
                  
                  
                  22,815
                  
                  
                  
                  12,020
                  
                  
                  
                  12,158
                  
                  
                  
                  22,815Water
                  
                  
                  WaterNine
                      Months Ended September 30,
                  
                  
                  Three
                      Months Ended September 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  4,984
                  
                  
                  $
                  4,195
                  
                  
                  $
                  3,267
                  
                  
                  $
                  2,163
                  
                  
                  $
                  1,676
                  
                  
                  $
                  1,475Gross
                      profit
                  
                  
                  748
                  
                  
                  
                  330
                  
                  
                  
                  386
                  
                  
                  
                  474
                  
                  
                  
                  94
                  
                  
                  
                  475Total
                      assets
                  
                  
                  22,422
                  
                  
                  
                  21,643
                  
                  
                  
                  24,248
                  
                  
                  
                  22,422
                  
                  
                  
                  21,643
                  
                  
                  
                  24,248Corporate
                  
                  
                  CorporateNine
                      Months Ended September 30,
                  
                  
                  Three
                      Months Ended September 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Total
                      assets
                  
                  $
                  1,282
                  
                  
                  $
                  5,079
                  
                  
                  $
                  3,902
                  
                  
                  $
                  1,282
                  
                  
                  $
                  5,079
                  
                  
                  $
                  3,902Consolidated
                  
                  
                  ConsolidatedNine
                      Months Ended September 30,
                  
                  
                  Three
                      Months Ended September 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  9,304
                  
                  
                  $
                  8,317
                  
                  
                  $
                  8,025
                  
                  
                  $
                  2,875
                  
                  
                  $
                  2,529
                  
                  
                  $
                  2,336Gross
                      profit (loss)
                  
                  
                  2,793
                  
                  
                  
                  2,072
                  
                  
                  
                  2,796
                  
                  
                  
                  421
                  
                  
                  
                  159
                  
                  
                  
                  538Total
                      assets
                  
                  
                  35,724
                  
                  
                  
                  38,880
                  
                  
                  
                  50,965
                  
                  
                  
                  35,724
                  
                  
                  
                  38,880
                  
                  
                  
                  50,965Power
                  
                  
                  PowerSix
                      Months Ended June 30,
                  
                  
                  Three
                      Months Ended June 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  3,608
                  
                  
                  $
                  3,269
                  
                  
                  $
                  3,897
                  
                  
                  $
                  1,901
                  
                  
                  $
                  1,661
                  
                  
                  $
                  2,095Gross
                      profit
                  
                  
                  2,098
                  
                  
                  
                  1,677
                  
                  
                  
                  2,347
                  
                  
                  
                  1,150
                  
                  
                  
                  893
                  
                  
                  
                  1,320Total
                      assets
                  
                  
                  12,280
                  
                  
                  
                  12,522
                  
                  
                  
                  27,652
                  
                  
                  
                  12,280
                  
                  
                  
                  12,522
                  
                  
                  
                  27,652Water
                  
                  
                  WaterSix
                      Months Ended June 30,
                  
                  
                  Three
                      Months Ended June 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  2,821
                  
                  
                  $
                  2,519
                  
                  
                  $
                  1,792
                  
                  
                  $
                  1,613
                  
                  
                  $
                  1,462
                  
                  
                  $
                  893Gross
                      profit (loss)
                  
                  
                  274
                  
                  
                  
                  236
                  
                  
                  
                  (89
                  )
                  
                  
                  247
                  
                  
                  
                  143
                  
                  
                  
                  (78
                  )Total
                      assets
                  
                  
                  22,081
                  
                  
                  
                  21,799
                  
                  
                  
                  24,693
                  
                  
                  
                  22,081
                  
                  
                  
                  21,799
                  
                  
                  
                  24,693Corporate
                  
                  
                  CorporateSix
                      Months Ended June 30,
                  
                  Three
                      Months Ended June 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Total
                      assets
                  
                  $
                  1,867
                  
                  
                  $
                  7,383
                  
                  
                  $
                  4,765
                  
                  
                  $
                  1,867
                  
                  
                  $
                  7,383
                  
                  
                  $
                  4,765Consolidated
                  
                  
                  ConsolidatedSix
                      Months Ended June 30,
                  
                  
                  Three
                      Months Ended June 30,2005
                  
                  
                  2004
                  
                  
                  2003
                  
                  
                  2005
                  
                  
                  2004
                  
                  
                  2003(Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)
                  
                  
                  (Restated)Revenues
                  
                  $
                  6,429
                  
                  
                  $
                  5,788
                  
                  
                  $
                  5,689
                  
                  
                  $
                  3,514
                  
                  
                  $
                  3,123
                  
                  
                  $
                  2,988Gross
                      profit
                  
                  
                  2,372
                  
                  
                  
                  1,913
                  
                  
                  
                  2,258
                  
                  
                  
                  1,397
                  
                  
                  
                  1,036
                  
                  
                  
                  1,242Total
                      assets
                  
                  
                  36,228
                  
                  
                  
                  41,704
                  
                  
                  
                  57,110
                  
                  
                  
                  36,228
                  
                  
                  
                  41,704
                  
                  
                  
                  57,110
 
 F-53
  PowerThree
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                1,707
                
                
                $
                1,608
                
                
                $
                1,802Gross
                    profit
                
                
                948
                
                
                
                784
                
                
                
                1,027Total
                    assets
                
                
                12,806
                
                
                
                13,340
                
                
                
                25,758WaterThree
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                1,208
                
                
                $
                1,057
                
                
                $
                899Gross
                    profit (loss)
                
                
                27
                
                
                
                93
                
                
                
                (11
                )Total
                    assets
                
                
                22,443
                
                
                
                22,350
                
                
                
                26,737CorporateThree
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Total
                    assets
                
                $
                4,209
                
                
                $
                5,912
                
                
                $
                6,325ConsolidatedThree
                    Months Ended March 31,2005
                
                
                2004
                
                
                2003(Restated)
                
                
                (Restated)
                
                
                (Restated)Revenues
                
                $
                2,915
                
                
                $
                2,665
                
                
                $
                2,701Gross
                    profit
                
                
                975
                
                
                
                877
                
                
                
                1,016Total
                    assets
                
                
                39,458
                
                
                
                41,602
                
                
                
                58,820
  **17.     SELECTED
        UNAUDITED QUARTERLY FINANCIAL DAT****A**
  2005
                    Quarters1st
                
                
                2nd
                
                
                3rd
                
                
                4th(restated)
                
                
                (restated)
                
                
                (restated)Revenues
                
                $
                2,915
                
                
                $
                3,514
                
                
                $
                2,875
                
                
                $
                2,977Gross
                    profit
                
                
                975
                
                
                
                1,397
                
                
                
                421
                
                
                
                767(Loss)
                    income from operations
                
                
                (930
                )
                
                
                280
                
                
                
                (582
                )
                
                
                (439
                )Net
                    loss
                
                
                (656
                )
                
                
                (241
                )
                
                
                (1,694
                )
                
                
                (1,368
                )Net
                    loss per Investor Share
                
                
                (1
                )
                
                
                -
                
                
                
                (3
                )
                
                
                (2
                )2004
                    Quarters1st
                
                
                2nd
                
                
                3rd
                
                
                4th(restated)
                
                
                (restated)
                
                
                (restated)
                
                
                (restated)Revenues
                
                $
                2,665
                
                
                $
                3,123
                
                
                $
                2,529
                
                
                $
                2,268Gross
                    profit
                
                
                877
                
                
                
                1,036
                
                
                
                159
                
                
                
                339Loss
                    from operations
                
                
                (269
                )
                
                
                (130
                )
                
                
                (1,315
                )
                
                
                (1,020
                )Net
                    (loss) income
                
                
                (295
                )
                
                
                1,142
                
                
                
                (722
                )
                
                
                (871
                )Net
                    (loss) income per Investor Share
                
                
                -
                
                
                
                2
                
                
                
                (1
                )
                
                
                (2
                )2003
                    Quarters1st
                
                
                2nd
                
                
                3rd
                
                
                4th(restated)
                
                
                (restated)
                
                
                (restated)
                
                
                (restated)Revenues
                
                $
                2,701
                
                
                $
                2,988
                
                
                $
                2,336
                
                
                $
                2,220Gross
                    profit
                
                
                1,016
                
                
                
                1,242
                
                
                
                538
                
                
                
                10(Loss)
                    income from operations
                
                
                (3,701
                )
                
                
                275
                
                
                
                (6,982
                )
                
                
                (5,329
                )Net
                    loss
                
                
                (2,183
                )
                
                
                (617
                )
                
                
                (4,933
                )
                
                
                (3,293
                )Net
                    loss per Investor Share
                
                
                (3
                )
                
                
                (1
                )
                
                
                (8
                )
                
                
                (5
                )
  **18.     SUBSEQUENT
        EVENTS**
 
 On
        December 31, 2005, an investor in the Fund and entities affiliated with the
        Fund
        filed an Amended Complaint and Jury Demand in Massachusetts Superior Court
        against, affiliated entities of the Fund including the Managing Shareholder
        and
        the Chairman of the Fund. The plaintiff alleges violations of the Massachusetts
        Securities Act, as well as breach of fiduciary duty, fraud, breach of contract,
        negligent misrepresentation and unjust enrichment all related to a set of
        alleged facts and allegations regarding the sale of securities of funds
        (including the Fund) sold in private offerings and the operation of those
        funds
        subsequent to the sale.  The plaintiff is seeking damages of $900 with
        interest and other damages to be determined at trial. In February 2007, the
        plaintiff instituted a second lawsuit in Massachusetts state court against
        the
        Fund and affiliated entities alleging that the allocation of the proceeds
        from
        the sale of RUK assets was unfair and sought an injunction prohibiting the
        distribution to shareholders of such proceeds.   The Fund and
        affiliates prevailed on the injunction, and the matter is currently pending
        in
        Massachusetts state court and no trial date has been set.  All
        defendants deny the allegations and intend to defend both actions
        vigorously.
  On
        August
        16, 2006, the Managing Shareholder of the Fund and affiliates of the Fund,
        filed
        lawsuits against the former independent registered public accounting firm
        for
        the Fund, Perelson Weiner, LLP (“Perelson Weiner”), in New Jersey Superior
        Court.  The suits alleged professional malpractice and breach of contract
        in connection with audit and accounting services performed by Perelson Weiner.
        On October 26, 2006, Perelson Weiner filed a counterclaim against the Fund,
        and
        its affiliates alleging breach of contract due to unpaid invoices. Discovery
        is
        ongoing and no trial date has been set. The costs and expenses of the litigation
        are being paid for by the Managing Shareholder and affiliated management
        companies and not the underlying investment funds, including the
        Fund.
 
 F-54
  In
        the fourth quarter of 2006, as a result of the
        losses recognized by the Fund from the disposition of ZAP shares, the Managing
        Shareholder waived a receivable from the Fund of $300 and contributed $315
        in
        cash to the Fund.
  On
        January 23, 2007, RUK entered into an agreement (the "Sale Agreement") along
        with Arbutus and the PowerBank Funds (the “Sellers”), and MEIF LG Energy Limited
        (the "Buyer").  At that time, RUK owned 88% of the issued and
        outstanding shares of CLP and the remaining 12% of CLP was owned by Arbutus.
        On
        February 22, 2007, RUK completed the sale (the “Sale”) of all of the issued and
        outstanding shares of CLP.
 
 Under
        the
        Sale Agreement, the Buyer agreed to buy (i) 100% of the issued and outstanding
        shares (the "Shares") of CLP from Ridgewood UK and Arbutus, and (ii)
        substantially all of the assets (the "Assets") of the PowerBanks.  The
        Assets and the Shares constitute all the landfill gas business located in
        the
        United Kingdom of RUK and of the PowerBank Funds.
 
 In
        accordance with the Sale Agreement, at closing, the Buyer paid an aggregate
        purchase price for the Shares and the Assets of £117.8 million ($229,500),
        subject to a working capital adjustment that resulted in an increase to the
        purchase price of £4.2 million ($8,200). After adjustment, the purchase price
        for the Shares was £25.1 million ($48,900), of which £22.1 million ($43,100) was
        attributable to the shares sold by RUK.  Taking into account payments
        made to RUK pursuant to certain sharing arrangements with the PowerBanks,
        the
        total gross sales proceeds to RUK were £27.6 million ($53,800).
 
 On
        February 23, 2007, the Manager caused a portion of the sales proceeds to
        be
        converted from sterling into US dollars which was done at the rate of 1.9483
        U.S. dollars for each pound sterling.  On March 27, 2007 a subsequent
        conversion took place at an exchange rate of 1.9604 US dollars for each pound
        sterling.  While certain transactions remain to be made that will
        require dollar/sterling conversions, management of the Fund does not expect
        the
        exchange rates of these conversions to have a material effect on
        RUK.
 
 The
        Sellers gave a number of warranties and indemnities to the Buyer in connection
        with the Sale that considers typical of such transactions.  Should there be
        a breach or breaches of the warranties or should an indemnifiable event occur,
        the Buyer could make claims against the Sellers including RUK.  Management
        of RUK does not believe there is a material likelihood that such a claim
        will
        arise or that, should such a claim arise, RUK would incur a material
        liability.  This belief is based, in part, on the Sellers having purchased
        warranty and indemnity insurance to minimize such risk.   There
        are no current plans to reserve or provide an escrow for the contingent
        liabilities represented by these warranties and indemnities. In March 2007,
        the
        Fund distributed a portion of the Sale proceeds to
        its shareholders.
  
 
 F-55