2025: A Year of Reconfiguration for International Cooperation

The central scenario of 2025 is the reconfiguration of the international system, especially of international cooperation as a source of financing for funds and projects in the field that seek social and environmental impact. The clearest signal is the decline of Official Development Assistance (ODA) towards our region in recent years: in 2023, ODA directed to Latin America and the Caribbean fell by 14,5% and stood at USD 14 billion. Why? Because loans dropped sharply (-33% to USD 5,1 billion), while grants barely increased (+5% to USD 8,4 billion). In 2023, moreover, only 62% of the aid that reached LAC came in the form of grants (the rest were loans). In addition, the portion designated as “programmable” multi-year aid, the one that allows projects to be planned with stability, also dropped more sharply in LAC (-26%) between 2022 and 2023, making it harder to secure sustainable resources for field interventions¹.

In 2024, global ODA recorded its first drop in six years (-7,1% in real terms), reaching USD 212,1 billion, with fewer contributions to multilaterals, less humanitarian aid, and lower refugee-related costs in donor countries². And at the beginning of 2025, the outlook became even more challenging: the U.S. Government announced the closure of USAID and the suspension of new assistance, a shock that further pressures the supply of ODA and redirects instruments toward more transactional approaches with the private sector, meaning establishing trade agreements rather than financial aid³.

The way forward is not to abandon ODA, but rater stop relying exclusively on it and to structure innovative financing mechanisms, which combine grants, private investment, and pay-for-results schemes, in order to diversify sources and secure sustainable resources for CSOs and social enterprises. When traditional resources contract, theses mechanisms align incentives, mobilize private capital toward impact, and enhance the value of every public or philanthropic dollar: they do not replace ODA, they make it more efficient and multiplying. This thesis was already presented in the study Innovative Development Financing Mechanism in Colombia, prepared by APC-Colombia, the Embassy of Canada, and Innpactia (2018-2022), where we emphasized the complementary role of ODA, multilateral banking, blended finance and South-South cooperation as pillars to expand opportunities⁴.

¿Why do these mechanisms fit the current moment?

• Efficiency and clear metrics: they prioritize funds and projects with outcome indicators (social and environmental) and performance-based payments².

• Measurable and comprehensible ecosystem: they allow the design of pathways with evaluation and monitoring that are comparable over time¹.

• Articulated partnerships: they bring together the public sector, multilaterals, philanthropy, and impact investors, diversifying sources and improving the sustainability of projects².

In other words, with less ODA available for LAC and the reshuffling of major donors (including USAID’s closure in 2025), the region needs mechanisms that pay for results, reduce risk, and mobilize private capital for impact. Innovative finance is not a “Plan B”; it’s the way to multiply every donated dollar and sustain transformative projects over time.

It’s not a time for despair; it’s a time to learn new financing languages, to measure what matters, and to forge unlikely alliances so that life-changing projects depend not on budget cycles but on verifiable results. If 2025 reminds us of anything, it’s this: the purpose remains broad—dignity, sustainability, real opportunities—and the ways to finance it can be just as broad. Opening our minds to innovative mechanisms isn’t abandoning cooperation; it’s equipping it with new tools so impact can reach farther and last longer.

¹ UNCTAD (2025). Aid at the crossroads: Trends in official development assistance – cifras 2023 por región; caída de ALC a USD 14.000 millones; composición donacines/préstamos; CPA. https://unctad.org/system/files/official-document/osgttinf2025d1_en.pdf

² OCDE (2025). AOD preliminar 2024: total USD 212.100 millones (-7,1%); notas sobre humanitario y costos de refugiados. https://one.oecd.org/document/DCD%282025%296/en/pdf

³ KFF (2025). Cronología del congelamiento de ayuda y del proceso de disolución de USAID (contexto de política pública en EE. UU.). https://www.kff.org/global-health-policy/u-s-foreign-aid-freeze-dissolution-of-usaid-timeline-of-events/?utm_source=chatgpt.com

⁴ APC-Colombia / Embajada de Canadá / Innpactia. Mecanismos Innovadores de Financiación al Desarrollo en Colombia. https://apccolombia.gov.co/

⁵ United Nations Conference on Trade and Development. (2024). https://unctad.org/system/files/official-document/un-gcrg-oda-report_en.pdf