Cadiz Signs Letter of Agreement with a Lead Investor for an Investment of up to USD175 Million in Mojave Groundwater Bank Project

Cadiz, Inc. announced that it has entered into a Letter of Agreement (LOA) with a lead investor to invest up to USD175 million in the Mojave Groundwater Storage Company, LLC (MGSC), a new entity established by Cadiz for purposes of construction, ownership and operation of Cadiz’s groundwater banking project in the Mojave Desert (the Mojave Groundwater Bank) and related projects.

Under the terms of the LOA, 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 USD175 million in the MGSC. This LOA is separate from and in addition to previously announced prospective investments by non-profit or public sector investors, including federally recognized Native American Tribes with whom Cadiz has entered into Letters of Intent. Cadiz expects the Lead Investor, along with other qualified investors, including the Tribes, to provide up to USD401 million of equity capital to acquire assets and fund construction of Mojave Groundwater Bank facilities. The parties will coordinate to seek available grant funding for any remaining construction costs.

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.

Susan Kennedy, Chairman and CEO of Cadiz

Under the terms of the LOA, 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 (i) 100% of its ownership of the Northern Pipeline, (ii) the Southern Pipeline right of way, and (iii) 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 USD51 million and provide up to an additional USD350 million 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.

Cadiz has established a special purpose entity, the East Mojave Water Company, LLC (EMWC), to serve as the managing member of MGSC. The distribution of profits from revenues anticipated to be received by MGSC will prioritise MGSC investors until they achieve an annual yield of 7.5%, with incremental distributions thereafter to the investors and Cadiz as the managing member and to low-income disadvantaged communities and Tribes participating in an advisory council.

The LOA does not create any binding obligations for the parties to close the contemplated transactions unless and until definitive agreements are executed, and the parties intend to negotiate and finalise the definitive agreements as soon as practicable. Any definitive agreement will be subject to conditions including the Lead Investor obtaining shareholder approval of the contemplated transactions.