Cadiz Provides Update on Q1 Developments and Future Plans for Water Infrastructure Projects

Cadiz Inc. Q1 Update: Strategic Progress in Water Infrastructure

In a recent shareholder letter, Susan Kennedy, the Chairman and CEO of Cadiz Inc., provided a comprehensive overview of the company's developments during the first quarter of 2025. Cadiz, a California-based water solutions firm, is heavily focused on advancing its water supply and storage initiatives amidst a backdrop of changing political landscapes and economic challenges. Here’s a detailed look at what’s been happening.

Reflecting on Q1

The quarter kicked off with numerous challenges, including political transitions in Washington, wildfires impacting California, and new tariffs on steel. Despite these hurdles, Cadiz made significant strides. The primary goal remains clear: to establish pipelines that will enable the company to start generating revenue from its water assets. Cadiz is working on an ambitious timeline, aiming to finish the Northern Pipeline by the end of 2026 and the Southern Pipeline by 2027.

Highlights and Strategic Decisions

Among the highlights of Q1, a few pivotal moments stand out:

1. Procurement of Materials

Cadiz successfully secured a deal to purchase 180 miles of steel pipes from the now-defunct Keystone XL project. This timely acquisition is crucial as President Trump’s administration announced increasing tariffs on imported steel by 25%. Since the steel from Keystone is already in the USA, it avoids these tariffs, safeguarding Cadiz from unexpected costs that could hinder the project’s financing.

2. Navigating Regulatory Changes

Amidst the changing political scenario, Cadiz made strategic decisions about its regulatory permits. They postponed submissions until the new administration was ready to ensure momentum was not lost during the political shift. Following wildfires, an emergency proclamation was issued by the President to expedite the permitting for projects vital to California’s water supply.

3. Tax Credits and Financing

The uncertainty over tax credits for clean energy due to the election results led Cadiz to act swiftly. They completed a deal for linear generation technology, qualifying for significant tax credits set to expire at the end of 2024. Locking in these credits is critical, providing financially favorable conditions for the company.

Furthermore, Cadiz pivoted its financing strategy, moving away from investors tied to uncertain federal climate programs, instead confirming a lead investor for its project finance company. The complexity of its financing, involving a variety of entities including private equity and public-private partnerships, reflects a diverse interest in the project’s success.

4. Financial Moves

To solidify its financial foundation amidst these developments, Cadiz raised $20 million in equity to cover vital development expenses in 2025. This was completed just before capital markets felt the effects of an ongoing tariff war, showcasing Cadiz’s proactive financial planning.

Additional Developments

A joint powers authority was also formed with the Victor Valley Wastewater Reclamation Authority, enabling access to municipal financing that will aid construction financing in the long run. In a parallel vein, ATEC, a subsidiary of Cadiz, completed a significant project in Central Utah, and its market presence for water filtration technologies is rapidly growing.

Future Prospects

As Cadiz prepares for the upcoming growing season, the company is enhancing the wellfield infrastructure to support water storage projects. Interest from additional developers looking to establish hydrogen production facilities at Cadiz Ranch highlights the site's potential for synergistic developments, which include solar and data center operations.

Conclusion

Cadiz Inc. remains steadfast in its pursuit to provide innovative water solutions while navigating complex challenges in the current environment. The updates from Q1 reveal a company that is not only weathering the storms but also strategically positioning itself for a prosperous future. With an aggressive schedule and strong backing, Cadiz is focused on delivering sustainable solutions for California's water needs and promises to keep shareholders informed as they progress.

For more information about Cadiz and its initiatives, visit Cadiz Inc..