The European Investment Bank has approved a €1 billion green credit facility for Elia Transmission Belgium, financing the second phase of the Princess Elisabeth Energy Island. The loan is the largest the EIB has ever made to a Benelux energy infrastructure project, and it brings total EIB commitments to the scheme to €1.65 billion, following a €650 million facility for phase one in 2024.
The island, under construction 45 kilometres off the Belgian coast, is intended to serve as a central hub connecting existing and new offshore wind farms to the Belgian mainland grid. Rather than running individual cables from each wind farm to shore, Elia will bring generation to a single artificial node, then export the power via high-voltage cables. The approach reduces seabed disruption and cuts the number of cable landfalls, though it concentrates risk on one piece of infrastructure.
From concrete caissons to high-voltage hardware
Phase one, funded by the 2024 credit facility, covered the island's physical construction: the concrete caissons, sand fill, and perimeter walls that form the artificial landmass. The installation of the final foundation element has now been completed, which means the basic structure is in place.
Phase two is about turning that structure into a functioning electrical node. The new financing will pay for a high-voltage substation, transformers to convert between alternating and direct current, and the AC export cables carrying power to the Belgian coast. Without this equipment, the island is inert rock and sand. The electrical systems are what make it an energy hub.
Elia, Belgium's transmission system operator, holds the concession to build and operate both the onshore high-voltage grid and the offshore connections. The total cost of the project has not been disclosed in full, but the combined EIB lending of €1.65 billion gives a sense of scale: this is infrastructure priced in the low single-digit billions.
Belgium's offshore wind strategy
Belgium has operated offshore wind farms in the North Sea since 2009 and currently has roughly 2.3 GW of installed offshore wind capacity. The Princess Elisabeth Island is designed to unlock further capacity by providing a standardised connection point for new wind developments, replacing the older model of dedicated cables from each turbine cluster.
The project also fits Belgium's effort to shift its electricity mix away from imported fossil fuels and ageing nuclear plants. Belgium's nuclear phase-out law has been repeatedly delayed; two reactors may yet receive lifetime extensions, but the direction of travel is toward renewables. The challenge is that wind and solar generate where the weather dictates, not where demand sits, which makes grid infrastructure like Princess Elisabeth Island necessary. The International Energy Agency has repeatedly warned that grid bottlenecks are among the main obstacles to renewable expansion across Europe.
A future link to Britain
One feature distinguishing Princess Elisabeth Island from a standard offshore substation is its planned interconnector capacity. The island is designed to host future electricity links to the United Kingdom, building on the existing NEMO interconnector between Belgium and Britain that entered commercial operation in 2019.
Cross-border interconnection is a stated priority for the European Commission, which considers insufficient electricity trading capacity between member states a barrier to both competition and renewable integration. Adding further interconnector capacity through the island would allow surplus wind generation to flow to wherever demand and prices are highest. It would also give Belgium a strategic position as an electricity transit country, a role the Netherlands has developed through its own extensive interconnector network.
The EIB's expanding energy lending
The European Investment Bank, the EU's long-term lending institution, announced in 2019 that it would phase out financing for fossil fuel projects by the end of 2021. Since then, its energy lending has shifted decisively toward grids and renewables. The bank's total climate and energy financing reached roughly €30 billion in 2024, with a growing share directed to electricity infrastructure rather than generation.
The Princess Elisabeth Island loan is classified as a green credit facility, meaning it is tied to environmental criteria. EIB green loans typically require borrowers to meet sustainability benchmarks and report on emissions reductions. For Elia, the climate case is straightforward: the island connects renewable generation, displacing fossil fuels. The harder question is whether the project's costs can be recovered through grid tariffs without adding to Belgian electricity bills, which are already among the highest in Europe.
Construction risks remain
The completion of the final foundation element is a visible milestone, but the project still faces technical and financial uncertainties. Offshore construction is expensive and vulnerable to North Sea weather delays. Subsea cable laying has been a persistent bottleneck for wind projects across northern Europe, with cable suppliers reporting order backlogs stretching years. Any delay to cable installation pushes back the date when wind farms can deliver power and earn revenue.
Elia has not published a firm commissioning date for the island's electrical systems, though the project is expected to be fully operational before 2030. The Belgian government's marine spatial plan designates specific zones for new offshore wind development, and developers in those zones will need the island's connection capacity to bring their projects online on schedule.
Organisations
European Investment Bank · Elia Transmission Belgium
