The US government has finalized a deal to guarantee loans to Botswana’s diamond manufacturers through a $125 million credit agreement between Barclays Bank Botswana and the Overseas Private Investment Corporation (OPIC), according to a report by Chaim Even-Zohar in the latest edition of Diamond Intelligence Briefs.
Barclays will take the first tranche out of a total available guarantee of $250 million. An additional $83 million matched banking partner share means that a total of $333 million of credit will be available for Botswana’s manufacturers – and only its manufacturers. The amount is thought to be well above the industry’s foreseeable requirements. Other banks are expected to join the program, meaning that Botswana will also be a source of credit, not just rough diamonds.
The agreement comes at a time when banks have been making credit either harder to secure or completely withdrawing from the industry, as shown by the recent Standard Chartered decision.
“It is fitting that this new direction should be signaled here, in Botswana,” said Lazare Kaplan International (LKI) chairman Maurice Tempelsman, whose company acts as the statutory required U.S. private party in the OPIC Guaranty Framework Agreement.
“It is Botswana that has championed the principles of accountability and transparency that our industry needs. And it is Botswana that has faced up to the test of sustainability, through development of secondary and tertiary economic sectors that can remain even after the primary diamond deposits begin to wind down.”