Indonesia seeks foreign loans for J-10 fighters, naval systems

J-10 fighter jet during flight performance at the aviation open-day activities of the Chinese People's Liberation Army Air Force (PLAAF) and the Changchun Air Show 2025 on 19 September. (Yue Shuhua/VCG via Getty Images)

Indonesia's Ministry of Finance (MoF) has approved plans for the country to fund the acquisition of three major defence systems from China via foreign loans, and Jakarta has begun actively seeking lenders to support the initiative.

The three systems are the J-10B multirole fighter aircraft, the Houbei (Type 22) fast attack craft, and an export variant of China's YJ-12 ramjet-powered coastal anti-ship missile known as the CM-302.

Documents that have been provided to Janes , including a letter from Indonesia's MoF to its Ministry of Defense (MoD), by a source close to the matter indicate that a total loan quantum of USD3.1billion has been approved specifically for these three programmes.

For the tranche to procure the J-10B fighter aircraft, the MoD has been cleared to source up to USD1.6 billion in foreign loans and the funds can be provided by either foreign export credit agencies, bilateral creditors, or private lending institutions.

Janes understands that Indonesia is planning to procure second-hand J-10B airframes that have been in service with China's People's Liberation Army Air Force (PLAAF) for this programme.

For the plan to procure CM-302 missiles, the MoD has been cleared to source up to USD1 billion in foreign loans and Jakarta plans to procure land-based variants of the weapon for coastal defence.

Similarly, the source of funds can be either foreign export credit agencies, bilateral creditors, or private lending institutions.