The $125 million loan guaranty program was cosigned with Lazare Kaplan
With the diamond industry suffering from a lack of financing, an unusual lender has stepped into the breach: the United States government.
The Overseas Private Investment Corp. (OPIC), a financial institution run by the U.S. government, has signed a $125 million loan guaranty meant to help Botswana increase local diamond cutting.
OPIC cosigned the guaranty with Barclays Bank of Botswana and Lazare Kaplan International (LKI). The agreement establishes a revolving framework facility in which OPIC will share the credit risk.
The first $125 million tranche is part of a broader $250 million loan guaranty program that may attract additional lenders in the future.
The OPIC-supported loan is meant to make it easier for Botswana’s local cutters and polishers to borrow money locally, a statement said.
“This project will provide critical support to an industry that is central to Botswana’s economy and a key source of job creation,” said James Polan, OPIC vice president of small- and medium-size enterprise finance, in a statement. “Bringing the larger supply chain into Botswana will have a huge impact in local communities across the country.”
Added LKI president Leon Tempelsman: “We are honored to be associated in this undertaking with partners as strong as Barclays and OPIC, who not only hold the highest standing in capital markets but share our vision of the diamond industry: one which supports constructive economic growth in the countries and communities where it operates and adheres to the utmost standards of accountability and integrity.”