OPIC Approves $250 Million to Develop Diamond Polishing In Botswana

The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a $250 million guaranty facility to help Botswana develop its newly-established diamond cutting and polishing industry, the organization announced Friday, saying that a key objective of OPIC’s guaranty facility is to develop a vibrant and robust lending market for this new industry.

OPIC will provide the guaranty to a company sponsored by DTC Sightholder Lazare Kaplan International, which in turn will pass on the guaranty to participating banks.

ABN AMRO has already been approved by OPIC as a participating bank and is expected to establish a subsidiary in Botswana.

Other banks operating in Botswana will also have an opportunity to join the facility, subject to OPIC’s approval. Participating banks will provide loans to Botswana-based diamond cutting and polishing companies.

The facility will enable diamond manufacturing companies in Botswana to access long-term capital to finance the purchase of rough diamonds for processing, and facilitate the development of a financial sector to support development of a cutting and polishing sector in Botswana.

The facility, which is expected to accelerate the establishment of a viable diamond distribution and manufacturing sector within Botswana, is projected to leverage the country’s diamond resources by increasing employment by more than 3,000 new skilled jobs.

The development of the diamond cutting and polishing sector is a priority for the Botswana government. Historically, however, manufacturing of Botswana’s rough diamond output has been processed through London and Antwerp.

The success of the government beneficiation program will depend on the availability of debt capital. Diamond beneficiation is also expected to have multiplier effects in sectors such as construction, insurance and jewelry, and to generate local job opportunities.

“Botswana generates more than one-quarter of the world’s gem-quality diamonds, but to this point has not been able to take advantage of those segments of diamond production which add value: cutting and polishing,” said OPIC President and CEO Robert Mosbacher, Jr.

“This project will directly facilitate the development of a sustainable diamond cutting, polishing and distribution operation in the country, in the process generating thousands of skilled jobs. OPIC is pleased to work with a U.S. company on a project with so many positive developmental benefits.”

Maurice Tempelsman, Chairman of Lazare Kaplan, said he is pleased to work with OPIC and qualified financing institutions in encouraging the development of a sustainable diamond polishing industry in Botswana