Take-or-pay agreements are structured such that payments are contingent on the availability of an asset rather than its actual usage. This mechanism is specifically employed to mitigate demand risk, as it ensures revenue stability regardless of fluctuations in demand.

• Option B (Operational risk) is incorrect because take-or-pay arrangements do not address risks arising from operational inefficiencies or failures.

• Option C (Construction risk) is incorrect because these agreements are not intended to mitigate risks associated with the construction phase of infrastructure projects.