Slovenia has made ESG history by becoming the first European sovereign to issue a sustainability-linked bond (SLB), raising €1 billion through a 10-year benchmark offering tied to its carbon neutral strategy and greenhouse gas (GHG) reduction targets. 

This landmark issuance links the bond’s interest rate to Slovenia’s performance against its 2030 climate goals under the National Energy and Climate Plan (NECP). The country has pledged to reduce GHG emissions by 35% to 45% by 2030. A step-up/step-down coupon mechanism applies: if the lower 35% target is missed, the interest rate will increase by 50 basis points; if the upper 45% target is achieved, the rate will drop by 50 basis points. This structure directly aligns financial accountability with climate performance—a strong ESG market signal. 

Despite a recent slowdown in global SLB activity amid concerns about target integrity, Slovenia’s issuance was over six times oversubscribed, reflecting strong investor confidence in its transparent and science-based decarbonization roadmap. 

In a statement, Slovenia’s Ministry of Finance emphasized the dual impact of the bond: “This issuance supports our ESG commitments and expands our investor base, while helping to meet critical emissions reduction targets.” 

By anchoring sovereign finance to its carbon neutral strategy, Slovenia not only sets a precedent for fellow EU members but also reinforces the role of sovereign SLBs in climate financing. The offering supports broader ESG investing trends and bolsters global efforts to combat climate change with credible, measurable outcomes. 

As momentum builds toward COP30, Slovenia’s successful SLB highlights how governments can embed accountability into climate finance—driving both environmental and economic outcomes. 

Source: 

https://www.esgtoday.com/slovenia-raises-e1-billion-in-first-sustainability-linked-bond-offering-by-european-sovereign/