Cadiz signs agreement for investment of up to $175M in Mojave water project

Cadiz (CDZI) has entered into a Letter of Agreement or LOA with a lead investor to invest up to $175M in the Mojave Groundwater Storage Company or MGSC, a new entity established by Cadiz for purposes of construction, ownership, and operation of Cadiz’s groundwater banking project in the Mojave Desert and related projects. The investor, a publicly traded company focused on investing in water infrastructure projects, will act as lead investor in the newly formed MGSC, and will invest up to $175M in the MGSC. Cadiz expects the Lead Investor, along with other qualified investors, including Native American Tribes, to provide up to $401M of equity capital to acquire assets and fund construction of Mojave Groundwater Bank facilities. Cadiz will be responsible for project development activities and, upon completion of certain funding commitments by MGSC, will transfer and contribute certain assets to the MGSC, including 100% of its ownership of the Northern Pipeline, the Southern Pipeline right of way, and 51% of the water storage rights in the Mojave Groundwater Bank. In consideration of such transfer of assets, MGSC will pay Cadiz, among other consideration, approximately $51M and provide up to an additional $350M for development and construction of Mojave Groundwater Bank facilities. Cadiz will retain 49% of the water storage rights and 100% of water supply purchase contracts entered into among Cadiz and public water systems.