Indonesia requests payment reduction for KF-21 programme

The Defense Acquisition Program Administration (DAPA) said it has tested the KAI KF-21's ability to launch the MBDA Meteor air-to-air missile and guide the weapon to target using the aircraft's active electronically scanned array (AESA) radar. (Kim Jae-Hwan/SOPA Images/LightRocket via Getty Images)

The Indonesian government has sought a reduction of its payment share for the joint development of the Korea Aerospace Industries (KAI) KF-21 fighter programme, from KRW1.6 trillion to KRW600 billion (USD1.2 billion to USD438 million), according to the Defense Acquisition Program Administration (DAPA).

“The Indonesian side has proposed adjusting its share to KRW600 billion by 2026, which is the end of the KF-21 system development period,” DAPA said on 8 May.

Seoul is “expected to accept Indonesia's proposal”, the South Korean Ministry of National Defense (MND) added in a statement on the same day.

According to DAPA, the total current investment required for the programme is KRW8.1 trillion by 2026. The cost-sharing ratio is 60% for the South Korean government, 20% for Indonesia, and 20% for the manufacturer, KAI. “Indonesia has paid about KRW400 billion of the total KRW1.6 trillion till last month,” DAPA said.

Janes has earlier reported on efforts by the South Korean government to resolve Indonesia's payment delays. In October 2023 a DAPA delegation met Indonesian Ministry of Defense (MoD) officials to discuss the matter. According to the MND, Indonesia requested a readjustment of its cost-sharing agreement after “South Korean officials notified the Indonesian side in a letter that it was necessary to comply with the payment period until 2026”.

According to DAPA, it will submit a proposal to South Korea's Defense Acquisition Program Committee on the joint development share later in May.