Turkish Cypriot leader Mustafa Akinci says bolstering the economy and institutions of ethnically divided Cyprus' breakaway north will benefit a peace deal reunifying the country as a federation.

Akinci said that after talks with Turkish Prime Minister Binali Yildirim on Wednesday, an improved Turkish Cypriot administration able to "stand on its own two feet" will be the "biggest guarantee" for a peace accord.

A Turkish invasion in the wake of a 1974 coup aiming to unite Cyprus with Greece left the island split along ethnic lines. Only Turkey recognizes a Turkish Cypriot declaration of independence.

Yildirim said he believes ongoing talks can deliver a peace deal by year's end. After a pipeline bringing water from Turkey to the north, Yildirim said plans are in the works to also bring electricity.