Likewise, the interest rate fluctuation risk is carried
exclusively by the operator. This risk arises
when loans used to fund the project are based
on floating rates (for example, Euro Interbank
Offered Rate [EURIBOR] plus margin). An
increase in the reference rate consequently
increases the amount of interest to be paid, and
hence the project costs. This risk can be hedged
by means of appropriate financial instruments
(for example, rate caps, ceilings on variable
rates, or rate swaps).