As downtown-based water infrastructure company Cadiz Inc. is well into the third decade of its pursuit of a massive water storage and transfer project in the Mojave Desert, it’s turning to a novel funding source: Native American tribes.
In late November, Cadiz obtained a letter of intent from the Santa Rosa-based Lytton Rancheria of California Native American tribe to invest up to $50 million in the Cadiz project, also known as the Mojave Groundwater Bank.
In an interview earlier this month, Cadiz Chief Executive Susan Kennedy said the company is now in talks with about a half-dozen other tribes. The aim, she said, is to obtain financial commitments from these tribes that, in combination with bond sales and other sources of financing, should cover the $800 million cost of the project.
“We are hoping to close on project financing by the end of the first quarter,” Kennedy said.
Cadiz has been trying for nearly 30 years to win government approvals to transfer water via pipelines from its desert aquifer to various water delivery agencies around Southern California. But the company has had to overcome intense environmental opposition to transferring water out of the aquifer, including from the late U.S. Sen. Dianne Feinstein who authored the California Desert Protection Act.
The most recent version of the plan involves two pipelines: one about 43 miles long to be built in a southeasterly direction from the Cadiz site to connect with the Colorado River Aqueduct and the other a 220-mile defunct natural gas pipeline that the company is trying to get approval to convert to a water pipeline.
Cadiz last month won a brief reprieve for the pipeline conversion effort from the State Lands Commission to give it the time necessary to line up the new project financing from the Native American tribes. (The commission has jurisdiction because a tiny portion of the pipeline crosses state-owned land.) In return, these tribes would gain majority control over the water infrastructure tied to the Mojave Groundwater Bank, including the pipelines.
The lure for the Native American tribes in Northern California such as Lytton Rancheria is the ability to work trades with Southern California water agencies for some of those agencies’ allocations from the State Water Project and other water sources. In exchange, the local water agencies would gain access to the Cadiz water without having to bear the project financing cost.
