The Lytton Rancheria of California, a federally recognized American Indian tribe, has entered into a definitive agreement with Cadiz Inc. (NASDAQ: CDZI). The agreement announced on Tuesday allows for funding up to $51 million in capital for the first phase of its Mojave Groundwater Bank project.
The project is expected to become the largest groundwater bank in the Southwest.
The agreement follows a Letter of Intent signed between Lytton and Cadiz in November 2024 and marks the first tribal investment in the project.
Lytton’s contribution represents the initial tranche of up to $450 million in total equity capital being raised by Cadiz through Mojave Water Infrastructure Company, LLC (MWI), the special-purpose entity created to construct, own, and operate the groundwater bank.
“For generations, tribes have protected the land and water that sustains us. Today, we are taking a seat at the table to help shape how water is managed across California and the West,” Lytton Rancheria Tribal Chairperson Andy Mejia said. “This partnership demonstrates that when Tribal leadership is part of the solution, every community benefits.”
“This agreement marks a historic milestone for Cadiz and establishes a powerful new business model for building critical infrastructure,” said Susan Kennedy, CEO of Cadiz Inc. “Lytton’s leadership has transformed the Mojave Groundwater Bank from a project to a precedent; and Chairman Mejia’s vision has opened the door to what could be a whole new era for water in the West.”
Under the agreement, Cadiz may draw up to $51 million in unsecured loan proceeds to fund development and capital costs associated with the project. Lytton’s loan is convertible into membership interests in MWI on the same economic terms offered to other equity investors. Initial proceeds of approximately $15 million are expected to reimburse Cadiz for prior development expenses, with additional draws anticipated to fund equipment deposits for construction of project facilities projected in 2026.
Cadiz is also finalizing diligence with private equity investors for up to $400 million in additional equity investment, which, along with municipal debt and government grant financing, is expected to fully fund the construction of the project.
As part of the agreement, Cadiz will issue 600,000 shares of common stock at closing as a commitment fee, and 25,000 shares per $1 million funded on each draw. All shares will be issued under the Company’s effective Form S-3 shelf registration statement (File No. 333-281507).
Additional details are included in a Current Report on Form 8-K filed with the SEC on Tuesday.
