The United States plans to supply 24 refurbished F-16C/D fighter aircraft to Indonesia, the presidents of the two countries announced in Bali on Friday on the fringes of an Asia-Pacific summit.
It was the second militarily significant announcement of President Barack Obama's ongoing nine-day Asia-Pacific trip.
The upgraded Lockheed Martin Corp (LMT.N) F-16s will give Indonesia a "much-needed" capability to protect its sovereign airspace, the White House said in a "fact sheet" that emphasized the relatively low price tag, put at $750 million by the Pentagon.
Under a separate tightening of ties with Australia, U.S. Marines will start rotating through northern Australia next year, eventually growing to a 2,500-strong task force, the two governments said during a visit by Obama before he flew to neighboring Indonesia for the summit with leaders of the Association of Southeast Asian Nations.
The Pentagon's Defense Security Cooperation Agency said Jakarta was seeking more capable F-16s able to carry out operations "in the outermost border regions of Indonesia."
The air force's existing fleet of 10 F-16 A/Bs cannot do this, the agency said in a mandatory notice of the tentative deal to the U.S. Congress. It put the estimated cost at $750 million. The aircraft are from excess U.S. inventory.
"The proposed sale will contribute to the foreign policy and national security of the United States by improving the security of a strategic partner that has been, and continues to be, an important force for economic progress in Southeast Asia," the notice to lawmakers said.
The White House said the plan was to start deliveries by July 2014, as requested by Jakarta. The deal would help boost Indonesia air defenses significantly "without compromising the defense budget and other national priorities," it said.
The transfer of F-16C/D models to Indonesia may raise new questions about Obama's refusal to meet Taiwan's standing request for 66 new F-16C/Ds of its own to help deter China, which regards the island as a rogue province.
The Obama administration in September notified Congress of a proposed $5.85 billion weapons package for Taiwan, including upgrades of 145 F-16 A/B fighters but none of the C/D models that Taiwan has sought.
Obama said on Thursday in Canberra the U.S. military would expand its presence in the Asia-Pacific despite budget austerity, declaring the United States was "here to stay" as a Pacific power that would help shape the region's future.
The F-16 deal involves the overhaul of 28 United Technologies Corp (UTX.N) Pratt & Whitney engines including spares. The aircraft will have the most advanced "Modular Mission Computer" produced by Raytheon Co (RTN.N), along with improved radar, avionics and the capability to carry and field more advanced weaponry and sensors, the White House said.
(Editing by Todd Eastham)