A group of international finance institutions have signed a US$125 million loan guaranty which will encourage and support lending to diamond manufacturers and polishing companies while allowing the institutions to share credit risk.
The finance institutions include Stanbic Bank Botswana, who is a member of the Standard Bank Group; the Overseas Private Investment Corporation (OPIC) - the U.S. Government’s development finance institution; and Botswana Finance - a subsidiary of Lazare Kaplan International.
The loan guaranty will help diversify Botswana’s economy, drive the development of the local financial sector and give local companies access to financing.
Stanbic Bank has been lending to diamond beneficiation companies in Botswana for over ten years and this facility will support and allow the bank to expand the availability of financing for the sector, the bank said.
“With the support of OPIC financing, this project will keep the value-adding process of the diamond supply chain in Botswana, promoting local job creation, diversifying economic growth, and bringing global trade opportunities,” said OPIC president and CEO Ray Washburne, adding that the project will have a significant impact in local communities and further the country’s economic development.
Samuel Minta, acting CEO of Stanbic Bank Botswana said that the bank expected continued growth in Botswana’s diamond beneficiation to have positive residual effects on several sectors, including electricity, finance and business. “We are proud that this loan guaranty will play a strong role in the continued economic growth of the country,” he said.
“Stanbic Bank Botswana and OPIC share our vision of how the diamond industry can support constructive economic growth in the countries and communities where it operates,” says Lazare Kaplan International president Leon Tempelsman. “ We commend both OPIC and Stanbic Bank Botswana for their commitment to the next stage of development and diversification of the economy of Botswana.”
This is the second tranche of a $250 million OPIC loan guaranty.
Announced in July, OPIC’s “Connect Africa” initiative seeks to invest $1 billion over three years to projects that support telecommunications and internet access, value chains that connect producers of raw materials to end users, and critical infrastructure, such as roads, railways, ports, and airports.