Korea Aerospace Industries (KAI) and Indonesian Aerospace have signed an agreement for the joint development of the KFX fighter aircraft.

The deal was signed between the leadership of the two companies at Indonesia’s defence ministry in Jakarta, says KAI in a statement.

The agreement sets the stage for Indonesia to share 20% of the development costs for the fighter project, which are estimated at KRW8.5 trillion ($8.3 billion).

The South Korean government will foot 60% of the programme. KAI and its partners will cover the final 20%.

Jakarta will furnish 1% of the total budget by April 2016, and over 2% starting in 2017. Overall, Jakarta’s contribution is expected to come to “about KRW1.6 trillion.”

Indonesia Aerospace, also known as PTDI, will send 100 staff to KAI’s Sachon factory to aide in the design of the new fighter, which is foreseen as being more advanced than the Lockheed Martin F-16, but not up to the standard as the F-35.

In late December 2015, KAI had formalised an agreement with the South Korean government to develop the jet. It is aiming for a first flight by 2022 and the completion of development by 2026. It expects the programme to create some 300,000 jobs.

Jakarta’s presence in the programme is controversial. Several observers have said that it may make the US government reluctant to provide export licences for technologies related to the jet.

In September 2015, the programme hit a roadblock when it emerged that the US had declined to provide export licences for four core fighter technologies: active electronically scanned array (AESA) radars, infrared search and track (IRST), electro-optical target tracking devices, and jammers.

One US expert says that Seoul was “really asking for the crown jewels” in seeking these technologies.

KFX is destined to become Seoul’s biggest defence acquisition programme. It will see 120 twin-engined fighters delivered the country’s air force, and 80 to Indonesia.

Source: FlightGlobal.com