Botswana Finance LLC, a subsidiary of Lazare Kaplan International (LKI) has signed a $125 million loan guaranty with Stanbic Bank Botswana, a member of Standard Bank Group and the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution. The loan guaranty will encourage and support lending to diamond manufacturers and polishing companies while allowing the organizations to share credit risk.
The loan guaranty will help diversify Botswana’s economy, drive the development of the local financial sector and give local companies access to financing, a statement by Stanbic 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 Chief Executive Officer Ray W. Washburne who recently visited the country. “The project will have a significant impact in local communities and further the country’s economic development.”
“We expect 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,” said Samuel Minta, acting Chief Executive Officer of Stanbic Bank Botswana. The $125 million is the second tranche of a $250 million OPIC loan guaranty – the first of which was fulfilled by Barclays Bank of Botswana in 2016. 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.
Botswana’s emerging diamond cutting and polishing firms have for years struggled against constrained access to credit facilities, high production costs and a shortage of skilled workers. President of Botswana Mokgweetsi Masisi, while he was Vice President in 2016 said at a diamond conference that the government was implementing strategies to help the cutting and polishing industry. Leon Tempelsman, President of LKI stated, “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. We commend both OPIC and Stanbic Bank Botswana for their commitment to the next stage of development and diversification of the economy of Botswana.”