JAKARTA/SEOUL (Bloomberg): Indonesian and South Korean officials have signed a revised deal that significantly lowers Jakarta’s financial commitment to the joint KF-21 fighter jet program, a move aimed at reviving long-stalled progress on the multibillion-dollar project.
South Korea’s Defense Acquisition Program Administration said Friday that the new deal reflects a resolution made last year to revise Indonesia’s share of the development costs.
In August, DAPA had said Indonesia would contribute 600 billion won to the project, equivalent to about US$438.4 million, marking a drop from 1.6 trillion won originally pledged.
DAPA said Indonesia’s defense ministry had begun administrative procedures to fulfill the revised payment, a step it said it expects will reinvigorate defense ties between the countries.
It added that both sides also agreed to expand cooperation beyond fighter jets to include ground and maritime systems.
Indonesia’s defense ministry declined to immediately comment.
The new deal comes years after defense officials from Southeast Asia’s largest economy agreed to contribute roughly 20% of the more than 8 trillion won project as it sought to upgrade aging military fleets.
The KF-21 Boramae, developed by Korea Aerospace Industries, is intended to replace South Korea’s fleet of F-4 and F-5 fighter jets. Indonesia is working on a localized variant known as IF-X, with state-owned Dirgantara Indonesia involved in assembly, maintenance, and production planning.
Progress for the KF-21 program, aimed at producing a next-generation supersonic aircraft, was marred by funding disputes and other problems.
Indonesia has been pursuing upgrades of its fleet of fighter jets on several fronts, including in an active contract with France’s Dassault Aviation SA for 42 Rafale jets, signed in 2022 with an estimated value of $8.1 billion.
Last week, Indonesian defense officials said they were in the early stages of evaluating an offer for China’s J-10 fighters. This week, Turkey’s president announced a deal to sell Jakarta 48 of its KAAN fighter jets currently under development.
DAPA Director Seok Jong-gun, among the South Korean officials in Indonesia this week, said his visit marked a return to normal for defense ties between Seoul and Jakarta, moving on from what he described as a period of strain due to technical issues.
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