No sooner did Brazilian President Jair Bolsonaro announce his intention to sell off government companies to reduce the country’s bloated bureaucracy than private equity investors from around the world began sizing up the portfolio of state-controlled enterprises.

There’s much to choose from. Consider Serpro, which provides technology services to the government and employs 6,000. Embrapa, an agricultural researcher, does everything from developing hardy tropical seeds to finding ways to improve the health of cattle. Its staff numbers nearly 10,000. And then there’s Natex, a small company tucked away in the Amazon rainforest with just 200 workers. Its chief product: latex condoms.

In all, Brazil’s government owns or has a stake in 134 entities that employ 597,505. Since 2016, 20 state-owned companies have been sold, liquidated or incorporated into other enterprises. It’s an eclectic bunch of profitable and money-losing holdings that includes companies, infrastructure concessions and real estate. True, that’s nowhere near the size of China’s state enterprises. Still, of 40 countries surveyed by the Organization for Economic Cooperation and Development (OECD), Brazil ranks fourth when it comes to the number of state-owned entities and their total workforce. In Latin America, it comes in first.

Though Brazil has a long culture of government involvement in the private sector, the Bolsonaro administration says the country can no longer afford to carry many of these companies on its books. In May, the government approved voluntary layoffs and retirements at seven state-controlled companies, which could reduce headcount by more than 25,000 employees.

Privatizations could help the government achieve its goal of shrinking its footprint, while raising sorely needed cash. Having recently emerged from a crippling recession, Brazil is confronting a stubborn federal budget deficit and a climbing public debt burden.

Many economists agree with the initiative, pointing out that many of these companies are poorly managed. Privatization could go a long way toward improving efficiencies, say analysts.

The government has set an ambitious goal. It hopes to sell at least $20 billion in assets this year, with proceeds totaling as much as $250 billion by the end of 2022, according to the nation’s privatization secretary Salim Mattar.

Early indications suggest considerable interest. In April, the state-owned oil giant Petrobras sold its gas pipeline TAG for $8.6 billion to a consortium of French utility Engie and Canada’s Caisse de Dépôt et Placement du Québec. The better-than-expected price reportedly convinced Petrobras to sell other pipelines.

There’s certainly no shortage of supply. Brazil’s federally-controlled companies had a combined value of $145 billion as of 2015, according to the latest OECD estimates. This doesn’t count 280 other enterprises owned by states and cities, according to the school of economics at Fundação Getulio Vargas. The list includes the power utility Cemig, water and sanitation companies Sabesp, Cedae and Sanepar and the banks BRB, Banrisul and Banestes.

And that represents only part of the government’s expansive web of holdings. Many of these companies, in turn, hold stakes in other state-controlled enterprises. For example, the financial powerhouse Caixa owns a $2.2 billion share in Petrobras. In April, Caixa told Petrobras that it hired financial advisers to assess the sale of its stake.

With holdings in about 100 companies, including shares in private companies, Brazilian development bank BNDES, along with its financial arm BNDESPar, has the biggest portfolio. Besides Petrobras, the bank has significant holdings in JBS, the world´s biggest meatpacker, and in the pulp maker Suzano. Last year, the bank sold shares of Petrobras and iron-ore producer Vale.

Equity in such publicly-traded companies could be a prized asset. “BNDESPar has huge stakes in several listed companies which may attract investors like us, with flexibility to invest in assets traded on stock exchanges,” says Amaury Bier, a former deputy finance minister and CEO of Gávea Investimentos, a Rio de Janeiro-based firm that manages $3.5 billion in assets.

Bier says his firm recently looked at Petrobras’s fuel distribution unit BR Distribuidora, with an eye on its chain of gas station convenience stores, and the company’s liquefied petroleum gas business Liquigas. “Our interest in BR Distribuidora was because of the distribution potential of the company’s convenience store unit. It’s a very interesting business to explore not only as a retailer, but also as a logistic asset,” Bier explains.

Though Brasilia-based banks Caixa Economica Federal and Banco do Brasil aren’t for sale, some of their subsidiaries are available, including the insurance business of Caixa Economica, according to Piero Minardi, managing director for Warburg Pincus in São Paulo and the head of the nation’s private equity and venture capital association, ABVCAP.

“Almost every asset may interest the private-equity funds,” says Minardi, although he expects many PE firms to look for businesses that offer a shorter maturity cycle and provide a faster exit of between five and eight years. By contrast, “ports and airports may attract strategic investors, such as infrastructure and sovereign funds that invest for 15, 20 years,” he says.

The national postal service, Correios, may be a tougher sell. “It is an important logistic operation that could make sense for many investors, including private-equity firms, but especially strategic investors,” says Gávea’s Bier.

But on the downside, he cautions that Correios is “frozen in time,” losing market share, even as it’s saddled with a workforce that numbers more than 100,000. Noting that a turnaround will take time, Bier suggests a more patient strategic investor will be needed to extract all the “potential” of the company.

It’s hard to say how much money PE firms will ultimately commit. Last year, private-equity funds raised $6 billion for investments in Brazil, says Minardi. But that’s just a fraction of the global amount of dry powder that’s waiting on the sidelines for the correct opportunities. “Private-equity investments in the Brazilian privatization program may be much larger,” he says.

When it comes to state-owned companies, many PE firms traditionally limited their investments in Brazil to power utilities sold by individual states. That may change. Ricardo Lacerda, the founder and the chief executive officer of the São Paulo-based investment bank BR Partners, estimates that PE firms could acquire as much as 20% of the assets that the government puts up for sale. Sovereign funds and strategic investors may acquire the remaining assets, Lacerda says.

At the end of this process, the government hopes that the only businesses it owns are those dealing with essential public services. It’s a view shared by many investors who believe a dose of private-sector knowhow and market discipline could revitalize many of these companies. “It makes all the sense to put these businesses in the hands of owners who can handle them more efficiently,” Minardi says.