Export-Import Bank of Korea to Provide $45 Million for KAI's KT-1B Life Extension Project in Indonesia
by Moon Chaeseok
Published 28 Sep.2025 12:40(KST)
"First Case of Financial Support Covering the Entire Defense Export Lifecycle"
"Backing the Aftermarket, Including MRO, with Financial Solutions"
The Export-Import Bank of Korea announced on September 28 that it will provide $45 million (approximately 63 billion won) in support for Korea Aerospace Industries’ (KAI) basic trainer aircraft (KT-1B) life extension project, which was contracted with the Indonesian Ministry of Defense.
This project targets 12 out of the 20 basic trainer aircraft that KAI has exported to Indonesia since 2003.
According to the Export-Import Bank of Korea, this initiative marks the first case of financial support that covers the entire defense export lifecycle, from exporting finished products to subsequent airframe modification.
The project aims to disassemble the trainer aircraft for a thorough inspection and then reinforce key structures such as the fuselage and main wing, extending the design lifespan by 50%.
The unit cost for the life extension project is nearly equivalent to the price of a finished aircraft, highlighting its high added value.
The Export-Import Bank of Korea explained that by expressing its intention to provide long-term financing over a period of 10 years in advance, it contributed to securing a contract for all 12 aircraft at once.
According to the Export-Import Bank of Korea, this financial support will allow companies to increase opportunities for generating revenue through long-term maintenance, modification, and upgrade projects.
This is because companies have pioneered the "aftermarket" sector, which involves providing parts replacement, maintenance, facility expansion, and consulting services after product sales.
The aircraft aftermarket encompasses maintenance, parts supply, technical consulting, and aircraft modification and upgrades, including MRO (maintenance, repair, and overhaul).
An official from the Export-Import Bank of Korea stated, "This financial support is a leading example of pioneering financial solutions for the aftermarket and maintenance, repair, and overhaul (MRO) businesses, which are new growth engines for K-defense." The official added, "Companies will not only secure stable sources of revenue but also gain competitiveness that remains resilient despite high volatility in the market for new orders."
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