South Korea and Indonesia reach a deal on KAI KF-21 fighter jet

South Korea’s Defense Acquisition Program Administration (DAPA) announced that it has reached a deal with Indonesia, with both countries agreeing to the payments Indonesia will make for the development of the KF-21 fighter jet.

“Indonesia will make payments over the next five years until 2026, and 30% of that would be in-kind transfers,” an unnamed DAPA official is quoted by The Korea Herald.

The countries will share the costs in accordance with the agreement that was reached in 2015, with South Korea shouldering 80% of the cost, and Indonesia contributing 20%.

The dispute between the countries started in 2017, when Indonesia failed to provide the full amount it was scheduled to pay for that year.

Since then, the countries have clashed, with Indonesia claiming South Korea has not kept to its agreement in terms of the technologies Indonesia was set to receive.

Although an agreement has been reached, the countries will continue to discuss the exact method payments will be transferred.

The ‘in-kind’ part of the deal refers to Indonesia paying 30% of the costs in ‘non-monetary’ form, such as natural resources or other types of produce. 

South Korean press reports that the exact products Indonesia will offer as payment is subject to further discussion. 

Meanwhile, FlightGlobal quotes a source within South Korean industry stating that Indonesia wishes to pay with CN-235 light transport planes developed jointly by Spain’s CASA and Indonesia’s IPTN, and built in Indonesia.

The KF-21 is a 4.5 generation twin-engine fighter jet developed through the KF-X program. 

The program was initiated in 2010. The prototype of the aircraft has been rolled out in April 2021, and is expected to conduct a maiden flight in 2022. KAI said it plans to manufacture 120 KF-21s by 2032. 

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