Uruguay's Sovereign Sustainability-Linked Bonds (SSLB)
The SSLB Framework links Uruguay's sovereign bond financing strategy to its climate and nature targets as established under the Paris Agreement. The Framework describes Uruguay's sustainable strategic priorities and sets out goals with respect to two Key Performance Indicators (KPIs), tied to the evolution of the intensity of Greenhouse Gas (GHG) emissions and the area of native forests in the country. The Sustainability Performance Targets (SPTs) are based on quantitative goals set for 2025 as established in the Nationally Determined Contribution (NDC).
This Sovereign Sustainability-Linked Bond (SSLB) Framework is meant to be the cornerstone of Uruguay’s entry into the world of sovereign sustainable finance and, more broadly, looks to pioneer an alternative approach for sustainability-linked debt financing. Uruguay seeks to implement a two-way pricing structure, linking the country’s cost of capital to the achievement of its climate and nature-based goals under the Paris Agreement.
Underpinning this framework is the intention to focus sustainable finance on the delivery of specific, material, and visible climate performance objectives anchored on a robust reporting and verification system, and driven by the actions, policies, and investments required to fulfill them. This approach generates enhanced accountability for the government around climate action and outcomes, embracing the country’s environmental agenda and further promoting its shared global public goods.
This Framework was jointly prepared by the Ministry of Economy and Finance, the Ministry of Environment, the Ministry of Industry, Energy and Mining, the Ministry of Agriculture, Livestock and Fisheries, and the Ministry of Foreign Relations. The Inter-American Development Bank and the United Nations Development Program provided technical assistance and expertise.
Link to SSLB Framework.