What's Happening?
Cadiz Inc. has announced a significant milestone in its Mojave Groundwater Bank project by securing the first tranche of construction financing through a strategic partnership with the Lytton Rancheria of California. The federally recognized Native American
tribe has invested $51 million, which will convert into an ownership interest in the Mojave Water Infrastructure Company (MWI), a newly-formed LLC established by Cadiz to finance, construct, and own the company's pipeline and storage assets. This investment marks the initial phase of project funding, with further project financing agreements expected to be completed in the fourth quarter of 2025. Additionally, Cadiz has executed a Memorandum of Understanding with EPCOR, Arizona's largest private water utility, for the purchase and sale of 25,000 acre-feet per year of water supply via the Southern Pipeline. The company is also collaborating with the U.S. Bureau of Reclamation to support the development of the Mojave Groundwater Bank and address long-term supply shortages on the Colorado River.
Why It's Important?
The investment from the Lytton Rancheria and the strategic partnerships Cadiz Inc. is forming are crucial for addressing water scarcity issues in the Southwest United States. The Mojave Groundwater Bank project aims to provide valuable water supply, storage, treatment, and conveyance solutions, which are increasingly important as negotiations among Colorado River Basin states have stalled over new water sharing rules. The project is expected to alleviate pressure on the Colorado River, which is facing long-term supply shortages. Furthermore, the collaboration with EPCOR and the U.S. Bureau of Reclamation highlights the potential for Cadiz to play a significant role in regional water management, offering solutions that could benefit multiple stakeholders, including local communities and industries reliant on water resources.
What's Next?
Cadiz Inc. is entering the final stages of diligence with private infrastructure investors for up to $400 million in equity capital to fund the construction of the Mojave Groundwater Bank. The completion of diligence and satisfaction of conditions for initial closing are anticipated in the fourth quarter of 2025. The company is also preparing to finalize agreements with EPCOR by early 2026, which will include capital contributions toward the construction of the Southern Pipeline system. Additionally, Cadiz is working on submitting local, state, and federal environmental permitting documents for its hydrogen development at Cadiz Ranch, expected in early 2026. These developments indicate a busy period ahead for Cadiz as it moves forward with its ambitious water and energy projects.
Beyond the Headlines
The partnership with the Lytton Rancheria not only provides financial backing but also represents a significant collaboration with Native American tribes, highlighting the importance of inclusive and diverse stakeholder engagement in large-scale infrastructure projects. This collaboration could set a precedent for future projects involving indigenous communities, ensuring that their interests and rights are considered in the development process. Moreover, Cadiz's focus on hydrogen development at Cadiz Ranch aligns with broader environmental goals, potentially contributing to the transition towards cleaner energy sources and reducing carbon emissions.
