Meetings have been taking place in Sark to discuss the idea, which would allow electricity to be imported, rather than produced on-island using expensive diesel generators.
The initial estimate for the work is £6m., which the island is looking to borrow from Guernsey.
A Treasury and Resources spokesman said the department was supporting Sark's investigations, but Sarkees would need to put forward a business case.
'The business case would need to demonstrate clearly that there would be a safe and sustainable income stream in Sark from its electricity customers there to support repayment of the long-term loan that would be provided for the project, including interest that would be payable on it to reflect the cost of the finance being provided,' he said.
'Sark itself has been very clear that this project should not cost Guernsey taxpayers any money and the initial financial models that have been developed demonstrate that the project is feasible.'