On Monday, Crown Electrokinetics Corp (NASDAQ:CRKN) shared plans for a collaborative initiative with 529 Capital, a real estate development firm, to construct a reverse osmosis (RO) water treatment plant in Cabo San Lucas, Mexico. This strategic partnership aims to address the pressing issue of water scarcity in the region by utilizing Crown’s proprietary slant well technology to harvest seawater for desalination. As Cabo San Lucas continues to grow, with increasing demands for water from its expanding tourism sector and local population, both companies are focused on providing a sustainable solution to ensure a reliable supply of clean, safe drinking water.
The construction of the RO water treatment plant is projected to generate substantial recurring revenue for Crown Electrokinetics, potentially reaching up to $40 million annually. This initiative is particularly crucial as the Baja Peninsula primarily depends on over-exploited groundwater aquifers, which are insufficient to meet the ever-increasing water needs. By leveraging an innovative approach that utilizes slant wells, Crown is tapping into an abundant and replenishable water source, positioning itself as a vital player in addressing water shortages in the region.
The seawater collected by the slant wells will undergo purification at the planned RO plant, employing advanced membrane filtration technology that is capable of removing up to 99% of dissolved salts and contaminants. This technology is essential in transforming seawater into potable water that meets health and safety standards. Through their partnership, Crown and 529 Capital aim to provide clean drinking water to several resorts in Cabo San Lucas, which would significantly enhance the region’s water supply and support local businesses in maintaining their operations.
Beyond providing water to resorts, the cooperative between Crown and 529 Capital also includes a commitment to support surrounding communities. They plan to seek opportunities to contribute as much as 500,000 gallons of clean drinking water daily to areas in need, establishing a lasting positive impact on the local population. This philanthropic effort highlights the companies’ dedication to not only addressing commercial needs but also fostering community welfare, which is particularly important in regions facing acute water scarcity.
The Water Solutions division of Crown Electrokinetics, led by Corey Boaz, is set to begin an environmental impact study immediately, an essential step in the development process. Concurrently, 529 Capital will work on acquiring the necessary permits to facilitate construction. The timeline for construction is slated to begin in the summer of 2025, with expectations for the plant to be operational by 2026. This project represents a significant advancement in solving water resource challenges in Cabo San Lucas, addressing both current demands and future sustainability.
As excitement builds around this project, the market has responded positively, with Crown Electrokinetics’ stock rising 11.10% to $0.277 during premarket trading. The initiative not only reflects the companies’ strategic business goals but also their commitment to improving essential resources for the Cabo San Lucas community. By addressing the challenges posed by water scarcity through innovative technologies and strategic partnerships, Crown and 529 Capital are paving the way for sustained growth and community engagement in the region.
