ABN AMRO has opened the ABN AMRO Bank Botswana in Gaborone to provide financial services to local and regional diamond industry players. The new bank was officially opened on September 24 at the newly established Diamond Technology Park.

The bank has established both a domestic bank and a regional Offshore Banking Unit. It is understood the domestic bank will play a leading role in providing sightholders registered with the Diamond Trading Company Botswana (DTCB) with diamond industry related finance in partnership with the Overseas Private Investment Corporation (OPIC). 

ABN AMRO’s International Diamond and Jewelry Group (ID&JG) has closed its Johannesburg office and will make Botswana the centre of its operations in Africa.  

ID&JG is the executive arm of the joint venture it is concluding with Lazare Kaplan International and OPIC. According to OPIC, this involves a $333 million revolving facility in which OPIC will share credit risk for up to $250 million in loans to Botswana-based diamond polishing companies. 

ABN AMRO will provide up to $83 million in revolving credits as part of the total facility. The Offshore Banking Unit will initially provide medium and short-term working capital credit facilities, cash management services and forex dealing to existing clients in the region and in due course to other markets across Africa.

Speaking at the official opening of the 12^th world’s largest bank, Acting Finance and Development Planning minister Kenneth Matambo said the move by ABN AMROa was encouraging since the ID&JG, which is the bank’s specialist provider of financial services to commercial clients and SMEs in the global diamond and jewellery industry will benefit from the global ID&JG processes, expertise and established client relationships. 

“It is also encouraging that despite the global economic downturn and subsequent negative impact on Botswana’s diamond sales, ABN AMRO as an industry leader with skills and expertise in this niche market has taken a positive outlook to their investment in Botswana, thus indicating their long-term commitment to Botswana.”

Giving the keynote address, Vice President Lt Gen Mompati Merafhe said the country’s socio- economic development has, for the better part been synonymous with diamonds and the main thrust of economic development policy has been to diversify the economy and reduce dependence on the mining sector. “Within this diversification agenda lies an absolute need to add value to the diamonds we produce by developing downstream activities that ensure sustainable contribution to economic growth. That is why Government established a Botswana Diamond Hub with a view to transforming Botswana from being just a diamond producer into a world diamond centre.”

In this instance, Merafhe said the strategic goal, through the Diamond Hub, is to develop Botswana’s share of the downstream value in the diamond industry. He said financing the diamond industry is a vital component of any emerging diamond centre and, “in our particular case, crucial for the development and success of Botswana and the Diamond Hub. “Diamond activities thrive on specialised financing, and therefore for Botswana to prosper as a world diamond centre the presence of a bank with one financial expertise in the diamond industry is crucial.” BY NCHIDZI SMARTS

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