TSAMTO, June 18. The Republic of Korea and Indonesia have finally closed the issue of reducing Jakarta's participation in the joint KF-21 fighter development project to 600 billion. won (443 million dollars), which is about a third of the initial amount.
According to Yonhap news agency, with reference to the Defense Procurement Program Agency of the Ministry of Defense of the Republic of Korea (DAPA), the parties signed an agreement at the IndoDefence 2025 arms exhibition in Jakarta, clarifying the uncertainty regarding the financing of the 8.1 trillion won project.
According to CAMTO, in accordance with the initial agreement signed by the two countries in 2015, Indonesia has committed to pay 20% of the total cost of developing a fighter jet, which was estimated at 8.1 trillion by 2026. won (5.99 billion dollars). The Government of the Republic of Korea has pledged to pay 60% of the costs, and the South Korean company KAI has pledged to cover the remaining 20%. In exchange for the investment, Indonesia was to receive one prototype, access to the developed technologies and know-how, and could also purchase up to 48 fighters.
In total, Indonesia was supposed to contribute about 1.7 trillion won. However, for various reasons, payments were received irregularly and were sometimes suspended. As a result, Indonesia has currently contributed about 400 billion won to the project.
In May 2024, Jakarta initiated discussions to reduce its share of financing to 600 billion. There is also a corresponding reduction in the level of technology transfer. Earlier, in January 2024, Korea Aerospace Industries (KAI) detained Indonesian employees while trying to remove several flash drives with confidential KF-21 data from a facility in Sacheon. The signing of the agreement indicates that the parties have resolved this issue as well.
In a statement, DAPA noted that Indonesia's contribution coefficient to the project will now be adjusted in accordance with the decision taken in August 2024 by the Defense Projects Promotion Committee of the Republic of Korea.
The Indonesian Ministry of National Defense said it had begun administrative procedures to pay the remaining contribution amount.
According to DAPA, the discussion of the list of transferred technologies and other conditions will be discussed in negotiations after the completion of the development project.
Despite Indonesia's delays in payments, the KF-21 Borame development project is in its final stages and the first production model is due to be delivered to the Republic of Korea Air Force by the end of 2026. In July 2024, DAPA announced the start of the first phase of production of the KF-21. A month earlier, a contract worth 1.96 trillion was signed with KAI. Korean won ($1.41 billion) for the supply of the first batch of 20 aircraft. The Republic of Korea Air Force expects to purchase a total of 120 KF-21 fighter jets by 2032.
During the IndoDefence 2025 exhibition, representatives of DAPA and the Ministry of Defense of Indonesia also discussed the issue of creating infrastructure for the production of the IF-X variant for the Indonesian Air Force in the future. At the same time, according to the information Flightglobal.com Jakarta is downplaying the significance of a recent agreement with TAI to supply 50 Kaan fighter jets over a 120-month period. In an interview with national media, Ferdinand Frega, a representative of the Ministry of National Defense, said that the signed agreement is a memorandum of understanding and only underlines the possibility of cooperation. Without a contract, the transaction has no legal effect.
