Cadiz Inc. Establishes Major Investment Partnership for Water Bank Project in Mojave Desert

On March 4, 2025, Cadiz Inc. (NASDAQ: CDZI) announced a significant step forward in its Mojave Groundwater Bank project by entering into a Letter of Agreement (LOA) with a major investor. This agreement entails an investment of up to $175 million to facilitate the construction, ownership, and operations of the groundwater banking project in the Mojave Desert, backed by a newly formed entity, the Mojave Groundwater Storage Company, LLC (MGSC).

The lead investor for this project, a publicly traded firm specializing in water infrastructure, will play a pivotal role in MGSC. This partnership is expected to enhance Cadiz's capacity to address water scarcity issues, particularly in arid regions impaired by climate change. Notably, the LOA is in addition to potential investments from non-profit and public sector entities, including federally recognized Native American Tribes with which Cadiz has entered Letters of Intent.

Cadiz aims to attract as much as $401 million in equity capital through the collective efforts of the lead investor and other qualified partners, including the Tribes. This capital will be pivotal in acquiring necessary assets and funding the construction phases of the Mojave Groundwater Bank facilities. Furthermore, the involved parties will also seek grant funding to manage any outstanding construction costs.

Susan Kennedy, Chairman and CEO of Cadiz, expressed optimism regarding this milestone, stating, "This is the pivotal milestone we've been working towards. We made tremendous progress last year and had great momentum coming into 2025, but having our lead equity investor in place to complete project financing is the key to getting this project built and operational on an aggressive schedule."

As part of the agreement, Cadiz will oversee development activities and upon fulfilling specific funding obligations, will contribute assets to MGSC, including 100% ownership of the Northern Pipeline, the Southern Pipeline's right of way, and 51% of the water storage rights in the Mojave Groundwater Bank. In return, MGSC is set to disburse approximately $51 million to Cadiz along with an additional investment of up to $350 million designated for the construction of the groundwater facilities. Cadiz retains control over 49% of the water storage rights and holds contracts for public water supply.

To manage MGSC effectively, Cadiz has formed a special purpose entity named the East Mojave Water Company, LLC (EMWC). It will facilitate the distribution of profits generated by MGSC, prioritizing investor returns until a 7.5% annual yield is achieved, after which further distributions will be made to investors and Cadiz, as well as to impoverished communities and involved Tribes.

It's critical to note that the LOA is not a binding contract, and the parties must negotiate and finalize definitive agreements for the transactions to occur. Completion of these agreements is contingent upon obtaining necessary shareholder approvals, highlighting the ongoing deliberations necessary before construction can begin.

Cadiz Inc. is a California-based water solutions company dedicated to ensuring access to clean, reliable, and affordable water. With extensive resources, including 45,000 acres of land, 2.5 million acre-feet of water supply, and a sophisticated pipeline system, Cadiz is focused on addressing the pressing impacts of climate change on water accessibility. For more information, you can visit their official website here.

As we continue to see climate challenges evolve, strategic investments like these highlight the importance of innovative solutions for water management, especially in vulnerable regions such as the Mojave Desert.