A further £100m drawn from the fossil fuel levy will be used to capitalise the Green Investment Bank.
The government has announced it will make £100m available for investment in renewable energy projects in Scotland.
The £100m is to be drawn from the fossil fuel levy, which was introduced in 1996 in Scotland and paid by energy companies using non-renewable fuel sources.
The fossil fuel levy currently has a surplus of £200m, which the Scottish and Westminster governments have agreed will be split, with half comprising the new Scotland-specific fund and the other half being used to capitalise the UK-wide Green Investment Bank.
Chancellor George Osborne said: “The coalition government is committed to creating jobs across Scotland – particularly in the green energy sector. It’s great news that we have been able to cut through the arguments and the wrangling with the Scottish government that have stopped this money being invested in the past.”