Cadiz Inc. Secures Agreements for Major Water Pipeline Project in California

In a significant development for California's water infrastructure, Cadiz Inc. (NASDAQ: CDZI) has announced that it has secured 85% of the capacity for its Northern Pipeline project through water purchase agreements. This milestone sets the stage for the construction of the 220-mile pipeline in 2025, with initial water deliveries projected as early as 2026.

The Northern Pipeline, with a total capacity of 25,000 acre-feet per year (AFY), is poised to play a crucial role in addressing chronic water shortages in California's remote desert regions and the Inland Empire. These areas currently rely on imported water from Northern California's State Water Project, making the pipeline a vital addition to the state's water management infrastructure.

Susan Kennedy, Chairman and CEO of Cadiz, emphasized the importance of this achievement, stating, "Executing a critical mass of water purchase agreements to support construction on the Northern Pipeline has been our primary objective this year." The company expects net revenues of approximately $850 per acre-foot in 2024 dollars, adjusted annually, once the pipeline is fully operational.

This development comes at a critical time for California and the Southwest, which are grappling with persistent drought conditions exacerbated by climate change and population growth. The Cadiz project represents a significant step towards ensuring long-term water security for the region's residents and businesses.

In addition to the Northern Pipeline, Cadiz plans to begin contracting for water delivery via the project's Southern Pipeline later this year. This 43-mile extension to the Colorado River Aqueduct will add an additional 25,000 AFY in water supply. Once both pipelines are operational, Cadiz will manage the largest new groundwater banking operation in the Southwestern U.S., providing much-needed relief to water-stressed areas.

The company's efforts extend beyond infrastructure development. Its subsidiary, ATEC Water Systems, is addressing groundwater contamination issues through the sale of iron and manganese filtration systems. This diversification underscores Cadiz's comprehensive approach to water management and treatment.

The implications of Cadiz's progress are far-reaching. As climate change continues to impact water availability, innovative solutions like those offered by Cadiz become increasingly crucial. The company's projects not only address immediate water needs but also contribute to the long-term sustainability of water resources in the region.

For investors, Cadiz's developments represent a significant opportunity in the water sector. The company's strong portfolio of water assets, coupled with its strategic infrastructure projects, positions it as a key player in addressing one of the most pressing challenges of our time.

As water scarcity becomes a global concern, the success of projects like Cadiz's Northern Pipeline could serve as a model for other regions facing similar challenges. The company's ability to secure agreements and move forward with construction demonstrates the viability of large-scale water infrastructure projects in addressing complex environmental and demographic challenges.

The progress made by Cadiz Inc. highlights the critical intersection of environmental stewardship, infrastructure development, and economic opportunity. As the company moves closer to the construction phase of its Northern Pipeline, all eyes will be on the potential impact this project could have on California's water landscape and beyond.