The Wave and Tidal Energy: Research, Development and Demonstration Support fund - to be known as WATERS - will support the testing of new wave and tidal prototypes in the seas around Scotland.
The fund will also assist in the development of new technologies up to the prototype stage, particularly those which increase the effectiveness of installation, operation and maintenance of marine energy devices.
WATERS will be managed and administered by Scottish Enterprise, in partnership with the Scottish Government and HIE.
First Minister Alex Salmond said: "With as much as a quarter of Europe's tidal energy resource and a tenth of the potential wave capacity, the powers of our seas are unrivalled in Europe. And as we have seen this week in Orkney and the Pentland Firth, developers and innovators are queuing up to get wave and tidal devices in the waters.
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"That is a tremendous first step. Of course, placing emerging technologies in harsh marine environments is extremely challenging. What we need to do is to support the continued development of the prototypes and technologies, at facilities like our world class testing centre on Orkney and elsewhere around Scotland.
"We know that initial costs remain high. The Scottish Government and others in the public sector can help attract private capital and investment in to these companies and technologies, helping cover those early costs. The WATERS fund will play a vital part in that process."
He also pointed to Scotland's £10 million Saltire Prize, with the backing of enterprise agencies and partnerships with The Crown Estate and developers, which will help secure Scotland's position as a global leader in marine energy.
Lena Wilson, chief executive of Scottish Enterprise, said: "The new WATERS Fund can generate real economic benefit for Scotland and Scottish businesses. With £12m to award, we can help wave and tidal projects and technologies reach commercial exploitation, creating new technologies with global potential, R&D jobs, and secure the fabrication and deployment of wave and tidal stream technologies in Scotland."
Elaine Hanton, head of HIE's energy team, added: "The Highlands and Islands are already leading the UK's drive towards a sustainable energy future and we want to see many wave and tidal projects developed around the waters of our region. This is a fantastic opportunity to further support technology development and maintain Scotland's position in the marine renewable sector."
(GK)
