Indonesia’s Ministry of Finance (Kemenkeu) has reportedly approved a financing plan for the acquisition of three defense systems from China through external loans. The initiative would include the purchase of J-10B multirole fighter aircraft for the country’s Air Force, Type 22 fast attack craft (NATO designation: Houbei class), and CM-302 cruise missiles — the export version of the YJ-12 supersonic missile — in its land-based configuration for coastal defense.
According to information published on October 16, the total value of the loan would amount to 3.1 billion U.S. dollars, exclusively dedicated to financing these three programs. Documents from the Ministry of Finance addressed to the Ministry of Defense (Kemhan) reportedly indicate authorization to seek credit sources from foreign export credit agencies, bilateral lenders, or private financial institutions.
In the specific case of the J-10B fighter acquisition, the Ministry of Defense would have been authorized to secure external loans of up to 1.6 billion dollars. According to a British outlet, the aircraft that could be supplied to the Indonesian Air Force would be units previously operated by China’s People’s Liberation Army Air Force (PLAAF).
Regarding the CM-302 missiles, the Indonesian government is said to have obtained approval to seek external financing of up to 1 billion dollars, aiming to acquire land-based versions of the system for coastal defense. The potential credit sources would be the same as those for the fighters and fast attack craft.
This potential deal would add to other modernization programs Indonesia has pursued in recent years, such as the purchase of Dassault Rafale fighters from France and the troubled negotiations with the United States for the acquisition of 24 F-15EX fighters, estimated at 13 billion dollars. The country also continues to participate in South Korea’s KAI KF-21 program, although delays have been reported in its financial contributions.
However, recent budget constraints could cast doubt on the country’s ability to sustain multiple acquisition programs simultaneously. In mid-2024, Indonesia’s Ministry of Defense spokesperson, Dahnil Anzar Simanjuntak, stated in a televised interview that “the government… has postponed the purchase of Mirage aircraft because our fiscal capacity, at the moment, cannot support such a purchase.” This measure reportedly affected the planned acquisition of 12 second-hand Mirage 2000 fighters from Qatar, intended as a stopgap solution until the arrival of the Rafale.
In this context, the potential purchase of Chinese-origin J-10Bs could represent an alternative to gradually replace the Indonesian Air Force’s current F-16A/B fleet and other platforms, though the program’s financial feasibility and the terms of Beijing’s financing still remain to be confirmed.
Images for illustrative purposes only.
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