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11.6. FinancingBNDES has played an important role in financing the expansion and modernization of the electricpower sector. This has allowed for the execution of projects that call for long maturation periods andsubstantial investments. BNDES' activities in this sector are aimed at guaranteeing the supply ofelectric power with quality, security and affordable rates, meeting the needs of the economy and ofsociety as a whole.Important aspects in the generation segment are not only the financing extended to the hydroelectricpower plants, but also the pursuit for the development of alternative sources of energy (SmallHydroelectric Centers (Pequenas Centrais Hidrelétricas – PCHs, solar, wind and biomass), with lowerinterest rates on loans, provided that a minimum local content percentage and other requirements arefulfilled.In addition to the BNDES, other domestic financing sources may be used, such as the regionalfostering agencies, the commercial banks and investment and equity funds.Lastly, it is relevant to mention, among the foreign loan and financing sources without governmentalguaranties, the Interamerican Development Bank (IDB) and World Bank (IBRD), both of which areoperating in Brazil in the electric power sector.12. ENVIRONMENT AND SUSTAINABILITYRegulation through environmental policies is primarily aimed at directing the behavior ofentrepreneurs and business organizations and guiding public environmental management. TheNational Environmental Policy (Política Nacional do Meio Ambiente) (Federal Law 6,938/1981) is oneof the key legal instruments for guiding existing and future initiatives on the environment, particularlyregarding economic processes and productive sectors that either rely on natural resources or aredeemed polluters or potential polluters.In addition to the federal guidelines laid down by the National Environmental Policy, the state and localgovernments are granted by the 1988 Constitution the same power to pass laws on environmentalcontrol as the federal government, as well as the power to monitor within the limits of their respectiveinterests, pursuant to the Constitution and supplementary laws.This is a complex legal framework that may comprise, at all three government levels (federal, stateand local), a number of subject-specific rules and public policies on air quality, flora, fauna, ground,water resources, basic sanitation, health, solid waste, health surveillance, environmental education,quality of urban life, cultural heritage, protected areas, biodiversity, sustainable development of78