The Republic of Slovenia launches its largest Sustainability Bond

Slovenia’s latest issuance and updated Sovereign Sustainability Bond Framework take the country’s Development Strategy from vision to action.

On Wednesday 4 January, the Republic of Slovenia has become the first Sovereign in Central and Western Europe (CEE) to enter the markets in 2023 with a €1.25 billion 10-year sustainability bond.

The bond, the second and largest of its kind issued by the country, was finalised alongside a €250 million tap – a procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues – of outstanding bonds due 2045.

The orderbook on the new sustainability bond is the largest single tranche gathered in CEE since the beginning of 2022 and the largest combined EUR orderbook in CEE for the same period.

The bond was issued under Slovenia’s newly updated Sustainability Bond Framework, which aims to support the country’s social and environmental aims, as set out in the Slovenian Development Strategy 2030 (SDS 2030). At a government level, Slovenia has a clear objective to attain net zero emissions or climate neutrality by 2050.

Proceeds from the issuance will be used to fund government investments that contribute these aims, including the transition to a low-carbon and circular economy, the sustainable management of natural resources, and social goals across housing, education and healthcare. They will also be used to further promote and develop the domestic and international green, social and/or sustainability bond market.

BNP Paribas jointly led the offering with five other banks, and acted as sole sustainability structuring advisor on the update of Slovenia’s Sustainability Bond Framework.

Slovenia’s vision for 2030 is one that creates a sustainable, inclusive and low-carbon future. The combined orderbook of over € 10 billion underlines investor appetite for Sovereign issuance with robust sustainable credentials and sets the tone for the year ahead.

Alexis Taffin de Tilques, Head of DCM CEEMEA, BNP Paribas CIB

A new framework to reflect market best practice

The inaugural Slovenian Sovereign Sustainability Bond Framework was published in June 2021 to support the aims of the Slovenian Development Strategy (SDS 2030).

In recognition of significant developments in the Green bond market, the Republic has since updated its framework to align the definitions in the use of proceeds with the EU Taxonomy substantial contribution criteria where possible. It has also voluntarily provided further information regarding Slovenian and EU legislation addressing relevant environmental risks for each green category.

Under its Sustainability Bond Framework, the Republic of Slovenia will finance/refinance projects under the following Green and Social Use of Proceeds categories:

  • Low carbon transport
  • Energy efficiency
  • Sustainable environmental management
  • Climate change adaptation
  • Access to essential services: education
  • Access to essential services: healthcare
  • Access to essential services: social inclusion
  • Employment generation and socioeconomic advancement