SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
ticular in relation to arrangements establishing in rem rights (such as the various in rem security agreements entered into in connection with the principal finance documents). 8.4 Foreign Ownership No (nationality-based) restrictions on the acquisition of real estate apply to foreign natural persons who are citizens of, or entities that are incorporated in, any of the EU, OECD and/or EFTA member states (excluding the applicability of any sanctions regime). Restrictions (most notably in the form of a reciprocity requirement) apply to citizens of other countries. These restrictions do not apply to entities incorporated in Slovenia, and it is generally possible to acquire real estate in Slovenia by means of a foreign-owned legal entity established in Slovenia. 8.5 Structuring Deals No recourse or limited recourse structures (ie, struc- tures where recourse of the lenders is limited to the assets/cash flows pertaining to the project) are com- monly employed for private project financing in Slo- venia. These are typically implemented via a special- purpose vehicle entity (or entities), with tight controls and limitations placed on its ability to perform any activities other than the project and/or incur any addi- tional liabilities. Arrangements with limited recourse (typically involving a parent guarantee) against the sponsor are often put in place, in particular in case of development projects/where the project is not yet producing cash flow. The preferred legal form for special-purpose project companies in Slovenia is a private LLC offering sig- nificant flexibility from a corporate law perspective. Alternatively, a limited partnership ( dvojna družba ) can be used, though in practice it remains uncommon out- side alternative investment fund structures. 8.6 Common Financing Sources and Typical Structures Senior bank financing (to the project company) remains the most commonly used source of third-party project financing in Slovenia. While still not fully developed, certain alternative credit providers are willing to enter the credit structure with mezzanine or subordinated
loans/instruments. Public project financing is typically done through the national budget. The state-owned Slovenian Export and Development Bank (SID Bank) plays a pivotal role in the Slovenian export financing market. SID Bank, inter alia, provides export loans and export credit insurance, and also finances large-scale development projects that con- tribute to the economic growth of Slovenia such as infrastructure projects, renewable energy initiatives and other significant investments. Project bonds (among other things used for NPL acquisition financing) and other alternative sources of financing are slowly developing but still relatively Project financing in the field of natural resources exploitation remains underdeveloped in Slovenia. In terms of a general overview, the key facets of the applicable regulatory regime are as follows. • By law, mineral resources are owned by the Republic of Slovenia. To explore these mineral resources, an exploration permit ( dovoljenje za raziskovanje ) is required, which is awarded through a public tender procedure. The exploitation of mineral resources requires a state concession ( koncesija za izkoriščanje mineralnih surovin ), also obtained through a public tender procedure, with a validity period of up to 50 years. It is worth not- ing that exploitation through fracking is expressly prohibited. • Water resources are similarly subject to various regulations. The sea, inland waters, marine waters and riverbeds are categorised as natural water public good ( naravno vodno javno dobro ). While their general use – such as for drinking, swimming and firefighting – does not require specific licences, special water use ( posebna raba vode ) – eg, for irrigation, hydroelectric power generation, indus- trial use and the recently introduced possibility of installing floating solar power plants on speci- fied lakes – requires a water right ( vodno pravico ), based on a water permit, a water concession or a certificate of registered special use of water, to be obtained, ensuring compliance with water manage- seldom used in practice. 8.7 Natural Resources
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