(Bloomberg) -- Italy announced it will set up a €1-billion ($1.1 billion) sovereign fund to channel funding to companies it deems strategic, furthering Premier Giorgia Meloni’s vision to shore up domestic production and secure key supply chains. 

The fund wants to “stimulate the growth and consolidation of national strategic supply chains, also for the procurement of critical raw materials,” according to a statement by Italy’s industry ministry. 

It was approved during a cabinet meeting Wednesday and is part of a draft law aimed at promoting ‘Made in Italy’. The draft still requires parliamentary approval and might change.

The fund will help “channel financial support from pension funds, the insurance sector, public and private entities,” Business Minister Adolfo Urso said earlier this month. On top of the initial state endowment, it aims to collect funding from pension funds, the insurance sector as well as public and private entities.

The government is also planning to strengthen sanctions against counterfeit products, according to the statement. The draft law mandates the creation of an official logo for ‘Made in Italy’ products to help protect intellectual property.

The move comes as Italy and the European Union are stepping up their actions to counter China’s growing economic clout, particularly on key supply chains from semiconductors to green energy technologies. Italy also supports the project of creating an EU sovereign fund to support the bloc’s industrial policy.

Rome is also in talks with the European Union to redirect pandemic reconstruction funds it’s unable to spend toward programs strengthening its energy sector, in another bid to shore up Italy’s energy security and self sufficiency. 

France contributed €500 million to a new, €2-billion fund created by private equity firm InfraVia Capital Partners aimed at boosting Europe’s access to minerals critical for the energy transition.

(Updates with more details)

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