Indonesia is to sign a US$280 million deal with Germany for the purchase of 130 Leopard 2 battle tanks, the Defence Ministry said today.

The deal between the government and Munich-based defence company Krauss-Maffei Wegmann GmbH & Co KG would be signed on Nov 7 in Jakarta, said ministry spokesperson Hartind Asrin.

“The memorandum of understanding will stipulate the transfer of technology and the provision of spare parts,” Asrin said.

He said Indonesia would in future produce the Leopards at the country’s weapons manufacturer PT Pindad.

“It’s a very good deal, which not only involves hardware, but also the system,” he said.

Indonesia has launched an ambitious plan to modernise its under-equipped military and build a strong defence industry.

The government allocated a defence budget of 156 trillion rupiah (US$16.4 billion) for the 2011-2014 period, allowing it buy hardware such as modern fighter aircraft and submarines.

Krauss-Maffei Wegmann products include armoured vehicles, artillery, bridge-laying equipment and rocket launchers.

- dpa