South Korea is gearing up for a significant milestone in its pursuit of an indigenous advanced fighter jet, the KF-21, with production slated to commence this year as planned, announced the state arms procurement agency on Wednesday.

The Defense Acquisition Program Administration (DAPA) intends to sign a contract with Korea Aerospace Industries Ltd. (KAI), the manufacturer of the KF-21, within the first half of the year. This agreement is pivotal in paving the way for the large-scale production of the fighter jet.

This endeavor marks the culmination of a joint fighter jet development initiative launched in 2015 between South Korea and Indonesia. The overarching goal involves deploying 120 KF-21s within the South Korean Air Force by 2032, effectively replacing its aging fleet of F-4 and F-5 jets.

A DAPA official highlighted the successful completion of test flights by all six KF-21 prototypes. These flights encompassed diverse performance assessments, including supersonic flights and arms separation tests, validating the aircraft’s capabilities.

Further tests are scheduled for this year, including a phase where one of the prototypes will undergo rigorous extreme weather trials at the Agency for Defense Development’s test center in Seosan, located southwest of Seoul.

However, the joint development project, estimated at 8.1 trillion won ($6.1 billion) through 2026, faces uncertainties associated with Indonesia’s overdue payments, amounting to nearly 1 trillion won as of last October.

Amidst the funding concerns, Seoul has committed to covering approximately 60% of the project’s expenses, with Jakarta and KAI jointly contributing the remaining 40%. Ongoing negotiations aim to resolve payment issues, with Jakarta expected to submit an updated payment plan for the project.