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Slovenia to Link Debt Costs to Climate Goals in First for Europe

Slovenia moved a step closer to linking some of its borrowing costs to the achievement of climate goals, which would be the first ever by a nation in the European Union.



Slovenia's government approved a framework for a sustainability-linked bond, a first for an EU nation, that will tie borrowing costs to achieving environmental, social, and governance (ESG) targets. The bond includes potential "step-down" coupons, rewarding Slovenia for exceeding environmental goals like greenhouse gas emission reductions, as well as potential penalties for failing to meet targets. Slovenia plans to issue the bond in June, depending on market conditions.

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