Cadiz Inc. (NASDAQ:CDZI) (the “Company”) is pleased to announce today that Hannon Armstrong Securities, LLC (“Hannon Armstrong”), an investment bank specializing in the financing of essential infrastructure assets in the United States, including next generation water, energy and telecommunication projects, will lead the Company through the construction financing process for the Cadiz Valley Water Conservation, Recovery and Storage Project (the “Water Project”). The Water Project would provide a new, reliable water supply to Southern California residents by capturing and conserving groundwater currently being lost to evaporation from the aquifer system beneath the Company’s 34,000-acre property in California’s Mojave Desert.
For over three decades, Hannon Armstrong has been providing and arranging capital for companies and governmental entities seeking innovative, low-cost capital structures for new infrastructure assets. Hannon Armstrong has particular expertise in structuring and placing long term infrastructure project finance, including projects involving multiple governmental agencies. Last year Hannon Armstrong’s $400 million Hudson Ranch 1 geothermal power project located in Imperial County, CA received the Project Finance Deal of the Year award from EuroMoney magazine.
The Water Project facilities include an expanded wellfield on the Company’s property and a 43-mile underground water conveyance pipeline that would deliver conserved water to the Colorado River Aqueduct, one of Southern California’s primary water distribution facilities. Capital costs for construction of the Water Project facilities are estimated at approximately $225 million and Hannon Armstrong expects that these facilities can be privately financed with lower-cost senior debt supporting a lower cost of water.
“Given the Water Project’s sound fundamentals and Cadiz’s strong asset position, opportunities exist to develop a comprehensive finance solution that will fund the capital requirements on terms customary for public water purveyors,” said Jeffrey Eckel, President and CEO of Hannon Armstrong. “The finance solution will be an attractive investment opportunity for long-term investors, such as insurance companies and pension funds, seeking steady fixed-income returns.”