• Slovenia’s inaugural €1B sustainability-linked bond aligns with emissions-reduction goals set for 2030.
• Coupon rate adjusts based on success or failure to meet climate targets.
• Strong investor demand: order book exceeds €6.5B with broad international participation.

Slovenia has launched its first sustainability-linked bond, raising €1 billion to support its environmental and climate objectives. The 10-year bond, maturing on 2 July 2035, carries a coupon rate of 3.125%.

“This issuance demonstrates Slovenia’s commitment to developing the sustainable finance market and diversifying its investor base,” the Treasury said. It also reinforces Slovenia’s pledge to reduce greenhouse gas emissions in line with global climate action.

The bond is governed by Slovenia’s Sustainability-Linked Financing Framework, which sets out specific performance indicators, sustainability targets, verification methods, and reporting obligations.

The key performance indicator is total annual greenhouse gas emissions. Two primary sustainability targets have been set for 2030:

• A 35% emissions reduction from 2005 levels, with a penalty of a 50 basis point coupon increase if unmet.
• A 45% reduction, which will trigger a 50 basis point coupon decrease if achieved.

The step-up mechanism would take effect starting in 2034, nine years after the settlement date of 2 July 2025.

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Investor appetite was strong, with the bond’s order book exceeding €6.5 billion. Geographically, allocations were diverse:

• 29% to the UK
• 20% to Benelux countries
• 15% to Germany, Austria, and Switzerland
• 12% to Southern Europe
• 11% to Slovenia
• Remaining shares spread across the Nordics, France, Central and Eastern Europe, and other regions.

By embedding climate performance into financial instruments, Slovenia positions itself as a growing player in sustainable capital markets.

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