Cadiz Inc. Enters Lease Agreement for Renewable Energy Development

On October 21, 2024, Cadiz Inc. (NASDAQ: CDZI) announced that its subsidiary, Cadiz Real Estate LLC, has entered into a Renewable Energy System Site Lease and Easement Agreement with RIC Development, LLC, a subsidiary of RIC Energy. The agreement involves the development of a hydrogen production facility and renewable energy resources on approximately 3,062 acres of property located at the Cadiz Ranch in eastern San Bernardino County, California.

The off-grid green hydrogen production facility is designed to utilize Cadiz water resources and a photovoltaic solar array to produce industrial quantities of green hydrogen, with a capacity of up to 50 tons per day. RIC Energy will be responsible for permitting, constructing, and operating the hydrogen project under the terms of the Lease Agreement.

The Lease Agreement outlines that RIC will lease access to the Cadiz property for a development period of up to three years, followed by a construction term of up to three years, and a 27-year operations term renewable in 5-year increments for up to an additional 30 years. RIC will make annual rental payments during these terms, starting from $35,000 per year during the development period and $1,000 per acre per year during the construction and operations terms, subject to inflation adjustments.

Additionally, RIC has agreed to purchase up to 500 acre-feet of water per year from the Cadiz Water Project for the hydrogen facility. The contractual arrangement will see Cadiz receive payments equating to approximately $11.5 million over 27 years for supplying water to the hydrogen development, starting once construction is complete and water deliveries begin.

Upon completion, Cadiz will have access to hydrogen and solar energy from the facility to support its water supply and groundwater banking operations. The parties also plan to explore using onsite natural gas pipelines for hydrogen storage and transportation, with these details subject to future definitive agreements.

The Lease Agreement allows for termination by RIC with a 15-day notice during the development term, while Cadiz may terminate the agreement for non-payment issues, subject to certain conditions.

This disclosure was made public through a press release issued on October 23, 2024. The full text of the Lease Agreement can be found in Exhibit 99.2 of Cadiz’s Current Report on Form 8-K filed with the Securities and Exchange Commission.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Cadiz’s 8K filing here.

Cadiz Company Profile

Cadiz Inc, together with its subsidiaries, provides water solutions in the United States. The company operates through Land and Water Resources; and Water Filtration Technology segments. It offers water supply, water storage, water conveyance, and water filtration services. In addition, the company is involved in the cultivation of grain crops and alfalfa, as well as provides water filtration solutions for impaired or contaminated groundwater sources.