KF-21 fighter jet undergoes air-to-air refueling for the first time over waters off the southern coast of Korea, March 19, provided by the Defense Acquisition Program Administration. Yonhap

Korea's state procurement agency on Wednesday hinted at accepting Indonesia's proposal to reduce its cost sharing for the KF-21 fighter jet program under the condition of providing fewer technology transfers, a move that would increase the financial burden on Seoul.

The Defense Acquisition Program Administration (DAPA) said Indonesia has offered to pay 600 billion won ($439.5 million) in total for the KF-21 jet project by 2026, a decrease from the initial 1.6 trillion won.

"We are pushing for measures to adjust the scale of the technology transfer to Indonesia in line with the adjusted cost sharing," Noh Ji-man, director general of DAPA's KF-X Program Group, said in a press briefing.

Indonesia had initially agreed to pay 20 percent of the total development cost of 8.1 trillion won in return for receiving one prototype model and technology transfers that would allow it to produce 48 units in Indonesia.

It has so far contributed around 300 billion won to the project and has missed payment deadlines, leading to questions over its commitment.

DAPA said it will finalize its decision at a committee review as early as late May so as not to cause delays in the development project, which is set for completion in 2026.

If approved, the government and Korea Aerospace Industries (KAI), its manufacturer, will have to increase their financial burden.

"We need to adjust the ratio of cost sharing and secure additional funds so as not to cause delays in the KF-21 development program," Noh said.

Despite the offer for less money and a reduced technology transfer, Indonesia's plan to build 48 aircraft at its local factory remains effective, a senior DAPA official said.

If the project proceeds as planned, the Air Force is expected to receive its first KF-21 in the second half of 2026 to replace its aging fleet of F-4 and F-5 jets. The KAI plans to build 20 KF-21s this year and produce 20 more next year.

The proposal comes at a sensitive time as an investigation is under way into an Indonesian engineer's alleged attempt to steal the jet's technologies at KAI, the manufacturer of the KF-21.

The engineer from PT Dirgantara Indonesia was caught in January attempting to leave a KAI facility with a USB storage device containing data on the fighter jet.

Earlier in the day, a prototype of the KF-21 successfully conducted its first live-fire test with medium-range air-to-air Meteor missiles, demonstrating its extended range capabilities.

The Meteor missile is capable of flying at over Mach 4, equivalent to four times the speed of sound, and can intercept targets over 200 kilometers away. Each KF-21 can carry up to four Meteor missiles, with deployment scheduled to begin next month. (Yonhap)