Indonesia: "KF-21 Contribution, Will Pay Only One-Third, 600 Billion Won"

It has been reported that Indonesia has proposed to the South Korean government that it will pay only about one-third of the originally agreed amount for the development cost-sharing of the Korean supersonic fighter jet KF-21.

According to media reports on the 6th, Indonesia recently proposed to pay a total of 600 billion won by adding an additional 300 billion won by 2026, in addition to the 300 billion won already paid as the KF-21 development cost-sharing.

On the 17th, the domestically produced supersonic fighter jet KF-21 was unveiled at the 'Seoul International Aerospace and Defense Exhibition (ADEX) 2023' held at Seoul Airport in Seongnam, Gyeonggi Province. Photo by Jinhyung Kang aymsdream@

In January 2016, Indonesia agreed to bear 20% of the KF-21 development cost, approximately 1.7 trillion won (later reduced to about 1.6 trillion won), by June 2026 in exchange for receiving related technology transfer.

Indonesia reportedly proposed to reduce the development cost-sharing to about one-third while also receiving proportionally less technology transfer.

Indonesia is currently delinquent on its cost-sharing payments, which amount to about 1 trillion won, citing budget shortages. At the end of last year, it requested an extension of the payment deadline to 2034, extending it by 8 years.

The South Korean government expressed reluctance, stating that since the KF-21 development will be completed in 2026, full payment must be made by then. In response, Indonesia revised its proposal to significantly reduce the cost-sharing but pay in full by 2026.

If Indonesia's proposal is accepted, the South Korean government is expected to bear an additional 1 trillion won from its budget out of the total KF-21 development cost of 8.8 trillion won.

Some suspect that since Indonesian engineers dispatched to South Korea are under investigation for attempting to leak KF-21 development-related materials, Indonesia may have already stolen the technology and is now demanding a significant reduction in cost-sharing.

After signing the development cost-sharing contract in 2016, Indonesia dispatched its engineers to Korea Aerospace Industries (KAI), the manufacturer of the KF-21. Earlier this year, some of them were caught attempting to leak KF-21 development-related materials by copying them onto portable storage devices (USB drives).

They are currently under investigation by South Korean police on charges of KF-21 technology leakage.