Jakarta, Indonesia – South Korea and Indonesia have finalized a restructured agreement regarding Indonesia’s participation in the Korea Aerospace Industries (KAI) KF-21 Boramae fighter jet development program, the South Korean Defense Acquisition Program Administration (DAPA) announced today.
Revised Agreement Addresses Payment Shortfalls
The revised „Project Agreement on Joint Development” addresses Indonesia’s outstanding payments for its involvement in the KF-21 program. Indonesia has struggled to meet its financial obligations under the original 2016 agreement, leading to the renegotiation.
Indonesia’s Commitment
DAPA stated that Indonesia’s defense ministry is „currently initiating administrative procedures to pay the remaining share for the joint development of the KF-21.” The agency expressed optimism that defense industry cooperation between the two nations would strengthen if Indonesia maintains its payment schedule.
Signed at Indo Defence Expo
The agreement was signed at the Indo Defence expo in Jakarta, following discussions between DAPA Minister Seok Jong-gun and Indonesian Minister of Defense Sjafrie Sjamsoeddin, along with Indonesian Deputy Minister of Defense Donny Ermawan Taufanto.
Future Cooperation
Minister Seok emphasized the potential for future collaboration in naval and other systems during meetings with Indonesian ministers, saying „We will do our best to strengthen defense industry cooperation with Indonesia in various areas such as submarines, firepower, and air defense systems, and expand cooperation to the entire Southeast Asia region in the future.”
Reduced Share of Development Costs
While DAPA did not disclose the exact details of Indonesia’s revised share of development costs for the KF-21, reports from South Korea suggest it has been reduced to 600 billion won ($437.8 million). Previously, Indonesia had committed to covering 20 percent (approximately 1.7 trillion won) of the KF-21’s development costs in exchange for a prototype aircraft and technology transfer.
History of Payment Delays
Indonesia has faced repeated delays in making its payments. By August 2020, it was reportedly 500 billion won in arrears. In May 2024, Indonesia requested a reduction of its share in the program to 7.5 percent, which South Korea agreed to in August.
Extended Payment Schedule
Reports also indicated that Indonesia sought to extend its payment schedule in installments until 2034, though South Korea did not confirm its commitment to this timeline when it agreed to the reduced Indonesian share.
Allegations of Data Theft
Adding to the controversy, some Indonesian engineers studying the KF-21 program in South Korea were accused of attempting to steal KF-21 technical data. In July 2024, a KAI official stated that an internal review found no major issues but that the investigation was ongoing.
