This background paper was prepared by ECLAC and presented at the Regional Consultations on the Economic and Social Council Annual Ministerial Review on Key Challenges of Financing Poverty and Hunger Eradication in Latin America and the Caribbean, held in Brazil, 17-18 May 2007. This document analyses the challenges for development finance posed by current ODA trends. It also presents and examines the new financial instruments being proposed. The focus is on the Latin American and Caribbean context.