A new government-backed deal to bring Icelandic geothermal power to the UK via the world’s longest undersea power link is expected to come within the next six months.

Ministerial talks have begun following a meeting between UK prime minister David Cameron and his Icelandic counterpart, Sigmundur Gunnlaugsson late last week in which the two leaders agreed to establish a UK-Iceland Energy Task Force to study the power cable plans.

The Sunday Times reports that the financier behind the scheme Edi Truell expects the details of the financial support deal to be in place by next May.

The £5 billion project will give the UK access to Iceland’s abundance of geothermal and hydropower which currently accounts for 95 per cent of Iceland’s power use.

The Icelink could bring 1.2GW of renewable power capacity to the UK by 2023. At this early stage, the price remains uncertain, but Bloomberg New Energy Finance’s central estimate of £86/MWh brings it in cheaper than new nuclear.

If the project is agreed by May this should allow the developers – National Grid and Icelandic TSO Landsvirkjun – to “use the summer window to start the detailed route planning” when Atlantic conditions are less hostile, Trudell told the Sunday Times.

The power cable is expected to take at least seven to ten years to build once construction starts.