These funds will enable Marine Power Systems to test the 1:4 scale prototype of its WaveSub device.
Gareth Stockman, managing director of Marine Power Systems said: "We are delighted to receive this EU investment which will support the next stage in the development of our WaveSub device. Marine Power Systems has made substantial progress and it is fantastic to get our hard work endorsed through further support."
Welsh Government Finance and Government Business Minister Jane Hutt said "We are committed to working with investors and businesses to boost economic growth and create highly skilled jobs, so I'm delighted that £2 million of EU funds are being invested to bring WaveSub another step closer to full-scale deployment.''
"Marine renewable energy has huge potential and we are investing £80 million of EU funds in this area over the next six years, including support to enable the development of two demonstration zones off the coasts of Pembrokeshire and Anglesey. This investment will vastly reduce the time, costs and risks to developers in this sector, and will help establish Wales as a leader in marine energy production,'' she added.
Marine Power System's innovative WaveSub technology has the potential to make a significant contribution to global renewable energy targets.