Indonesia wants foreign banks to finance its Sukhoi deal

Indonesia's deal to buy six Su-30 fighters from Russia is dependent on foreign banks giving the country a loan, as it cannot afford the aircraft, the Indonesian ministry of defence's (MoD's) directorate of procurement announced on 29 August.

The deal was sealed on 21 August at Russia's MAKS 2007 aviation and space show. Jakarta was to buy three Su-27SKM and three Su-30MK2 aircraft. Delivery was scheduled for between 2008 and 2010.

Funds for the deal have not yet been cleared by the Indonesian government, which has struggled to find finances for a number of recent military procurement bids.

Indonesia's defence minister Juwono Sudarsono confirmed that though the agreement had been signed, funds had not been sanctioned. Defence officials were "studying the possibility" of foreign banks financing the purchase, he said.

Indonesian defence sources indicated, however, that a number of foreign banks — from Russia and South Korea — have already been approached to fund the $350-million Sukhoi deal.