JAKARTA — Seoul and Jakarta are ironing out the transfer of a singular KF-21 fighter jet prototype, capping a decade-long back and forth over deal to manufacture the South Korean jets in Indonesia that once envisioned the handover as one of many.

Defense Logistics Agency head Yusuf Jauhan told reporters in late June that plans to domestically produce the jets will not materialize, confirming speculations that Jakarta had cancelled agreements to domestically manufacture the Korean jets under a 2015 co-production agreement.

The KF-21 Boramae, developed by Korea Aerospace Industries, is a twin-engine fighter designed to succeed South Korea’s aging F-4 and F-5 fleets. Indonesia intended to use these jets to replace older warplanes.

Jakarta had initially agreed to cover 20% of the development cost, then priced at 1.6 trillion won ($1.3 billion), to be paid until 2026. The deal includes the transfer of one prototype and technology that would allow state-owned PT Dirgantara Indonesia (PTDI) to produce 48 units of KF-21 Block-I fighter jets in Bandung.

But the agreement had been bogged down by delayed payments and allegations of sensitive data theft, which were carried into numerous renegotiations on cost-sharing arrangements.

In 2024, Jakarta requested to extend the payment timeline until 2034, but Seoul declined because it would derail deployment plans. The countries eventually agreed to reduce Indonesia’s contribution to 600 million won, but the deal will significantly lessen tech transfer coverage.

There had been confusion on the status of the KF-21 co-production deal, which had been kept tightly under wraps.

Earlier in April, Indonesian authorities revealed that the KF-21’s domestic production would no longer push through and confirmed in June that the government had scrapped the program.

This comes after Jakarta finished settling the 600 million won commitment under the reduced agreement in exchange for a single-seat KF-21 prototype. Officials also said they are more interested in buying ready-made jets.

Jakarta’s decision “appears to be largely practical and financial,” Hyung-Ju Kim, president of the Security Management Institute think tank, told Defense News.

“Indonesia may still want the aircraft, but not necessarily the burdens of local co-production. From Seoul’s perspective, this is probably easier to manage and potentially more attractive for the KF-21’s broader export campaign,” Kim said.

If Jakarta’s plans push through, Indonesia would also become a good first reference case for the KF-21 jets and will boost its market potential, Kim said.

Local officials said that procurement plans are still being explored. PTDI told Defense News that internal discussions are ongoing and no definitive plan has been established.

While purchasing the KF-21 remains on the table for Jakarta, official sources told Defense News the odds are in favor of existing contractors with more attractive tech transfer arrangements.

Officials are reportedly weighing the purchase of 24 additional French Dassault Rafale jets to supplement the 42 jets the government ordered under a contract signed in 2022.

Jakarta also signed in April an overseas loan scheme to buy 48 KAAN stealth jets from Turkish Aerospace Industries worth $10 billion, which will be delivered beginning in 2032.