Jakarta: South Korea and Indonesia have finalized a deal to reduce Jakarta's financial contribution to the joint KF-21 fighter jet project to 600 billion won (US$443 million), approximately one-third of the original amount, as disclosed by Seoul's defense procurement agency.

According to Yonhap News Agency, the agreement was signed at an arms exhibition in Jakarta, resolving previous uncertainties over the financing of the 8.1 trillion-won project. Initiated in 2015, the project aims to develop an advanced supersonic fighter jet. Originally, Indonesia had agreed to cover about 20 percent of the project's cost as a partner country until June 2026, in exchange for Seoul's technology transfers and other conditions.

However, Jakarta struggled to meet payment deadlines and proposed in May last year to lower its total contribution to 600 billion won and reduce the extent of technology transfers. Although Seoul approved the reduced contribution last August, the finalization of the revised agreement was delayed due to tensions stemming from a police investigation into alleged technology theft by Indonesian engineers at Korea Aerospace Industries Ltd., the manufacturer of the KF-21.

The recent signing suggests that the two countries have moved past these issues. "Indonesia's defense ministry has said it has begun administrative procedures to pay the remaining contribution amount, and if the payments are made as planned, defense industry cooperation between the two countries is expected to gain momentum," DAPA stated in a release.

In addition to the agreement, DAPA officials met with Indonesian Defense Minister Sjafrie Sjamsoeddin and Deputy Defense Minister Donny Ermawan Taufanto on the sidelines of the exhibition. They agreed to expand defense industry cooperation beyond fighter jets to include land-based and maritime systems. The KF-21 project is currently in its final stages, with the first production model expected to be delivered to the Air Force in the latter half of next year.