By Giuseppe Fonte and Angelo Amante
ROME (Reuters) – Italy’s cabinet will on Wednesday approve a bill to create a fund to support domestic strategic firms, government officials said.
The new vehicle is expected to invest in firms operating in national “strategic supply chains including the procurement of raw materials”, Industry Minister Adolfo Urso told reporters without giving details.
“It will be an Italian sovereign wealth fund with a significant initial endowment,” Urso said adding private investors could join the state in investing in the scheme.
Government sources have previously told Reuters that the administration led by nationalist Prime Minister Giorgia Meloni is courting sovereign wealth funds (SWFs) of Saudi Arabia, Qatar, the United Arab Emirates, Azerbaijan and Norway to give the fund more firepower.
The project is part of a broader law proposal of the right-wing administration aiming to support Italian business — including focusing on the country’s traditional products and industries such as woodworking and pottery.
Once the bill has been approved by both houses of parliament, the government will adopt a decree to define how the fund will work and how much state cash inject into it, two separate officials briefed on Rome’s plan told Reuters, asking not to be named.
Under a draft seen by Reuters last week, the Italian Treasury would have invested in “high-potential national enterprises” through financial vehicles or investment funds promoted by state lender Cassa Depositi e Prestiti (CDP).
But the officials said the reference to CDP is likely to be dropped from the final bill, signalling divisions among the ministries on how to build up the new facility.
Rome announced its plans this month triggering sceptical reactions from analysts and economists, who argued among other things that the fund risked duplicating CDP Equity, a CDP unit formed in 2011 and tasked with injecting capital into strategic assets.
Meloni aims to finance the scheme through part of the resources originally earmarked for “Patrimonio Rilancio”, a fund launched in 2021 to bolster companies hit by the pandemic.
Run by CDP, Patrimonio Rilancio was originally intended to provide some 40 billion euros of financing, but has so far invested just around 1 billion.
($1 = 0.9084 euros)
(Reporting by Giuseppe Fonte and Angelo Amante; Editing by Alison Williams)