By Brandon Pensick, ECA President Email: [email protected]

Step-by-step, ECA for the last four years, as part of our focus on local construction issues, has been a strong supporter of the Cadiz Valley Water Conservation,Recovery and Storage Project. So, we were happy to hear that the company behind the project has lined up initial construction funding.

Cadiz Inc. announced in early May that it has arranged up to $255 million in construction financing from private equity firm, Apollo Global Management to start work on its long-anticipated water project to bring new water supplies to thirsty southern California.

Cadiz signed agreements with funds managed by Apollo affiliates that will provide $15 million for construction startup costs and an additional $45 million to “refinance senior secured mortgage debt” to clear the financial path for the project.

Apollo, which has $197 billion under management, has also committed $240 million in construction financing to complete the first phase of the Cadiz project, though, in the announcement, Cadiz warned investors that this commitment is “highly conditional” and is not guaranteed to close.

The Trump administration’s Bureau of Land Management (BLM) is expected to clear the last regulatory burden for the project, listed as one of the top 50 infrastructure jobs in the country. When the BLM approval surfaces, it will be challenged by enviro groups, but Cadiz has won a number of such suits over the venture.

“We are excited by the unique opportunity to support Cadiz at this critical juncture,” Antoine Munfakh, a partner at Apollo Global Management, said in a statement. “As active infrastructure
investors, we believe innovative projects, like Cadiz, can solve many of the important issues facing municipalities today. The project brings a reliable and vital new water resource and water storage option to the Southern California region,” he said.

“Apollo is a leading sponsor of private project financing with a long track record of success,” Cadiz Chief Executive Scott Slater added. “We believe the Apollo Funds’ financing of the Cadiz water project will enable us to more readily customize contractual arrangements for the benefit of project participants and increase both the competitiveness and overall versatility of the project.”

Cadiz signed agreements with six California water agencies to pump up to 50,000 acre-feet of water a year out of its 45,000-acre aquifer and send it via pipeline to the Colorado River Aqueduct
on its way to thirsty southern Californians.

We are still working this issue so ECA members get their share of this work, which is why we’ve “gone local” on our efforts for projects.