Antwerp World Diamond Centre (AWDC) announced yesterday that it has reached an agreement with the Antwerp diamond banks to provide a temporary additional financial mechanism in support of the Antwerp diamond dealers.



AWDC said the diamond banks have agreed to provide new credit facilities up to a maximum of 1 billion euros, for a period of two years, in exchange of stock collateral and under existing credit conditions, on condition of approval by the Belgian Banking, Finance and Insurance Commission.



“AWDC will be in charge of the valuation of the securities and the transparence of the operation, so as to secure the position of the diamond banks,” it said.



In addition, the diamond sector has asked a temporary additional guarantee of 200 million euros from the Flemish government in order to restore the confidence in the diamond sector.



“The purpose of the agreement is to improve the liquidity position of the diamond dealers and to give a new impulse to the diamond trade,” AWDC said in a statement.



Imports and exports of polished diamonds have decreased respectively by 32% and 28% during the first four months compared to January - April 2008 due to the worldwide financial and economic crisis. Imports and exports of rough diamonds decreased by 45% and 30% respectively during the same period.



“This action confirms the leadership of the Antwerp diamond sector in these trying times and will allow Antwerp to reaffirm and strengthen its position as leading diamond center, allowing the center to maintain its current employment rate. Additional funds will benefit all stakeholders of the diamond sector – diamond dealers, banks and mining companies – and will restore the confidence in the diamond trade”, said AWDC’s CEO Freddy Hanard.