China has commenced construction on what it says will become the world’s largest hydropower dam, located on the eastern edge of the Tibetan Plateau, the official Xinhua news agency reported, in a project valued at over $170 billion.
The Yarlung Zangbo hydropower project, which consists of five cascade stations, will eventually have the capacity to generate 300 billion kilowatt-hours of electricity annually—roughly equal to the annual power consumption of the United Kingdom. It is China’s most significant hydropower initiative since the Three Gorges Dam on the Yangtze River.
Xinhua quoted Premier Li Qiang as calling the dam a “project of the century,” while emphasizing that “special emphasis must be placed on ecological conservation to prevent environmental damage.”
The project is being overseen by the newly established state-owned China Yajiang Group. It marks a significant public infrastructure investment amid Beijing’s efforts to reinvigorate slowing economic momentum. Analysts from Citi estimated that if construction continues over 10 years, it could contribute up to 120 billion yuan ($16.7 billion) to annual GDP, with broader economic effects beyond direct investment.
Chinese equity markets reacted positively to the announcement, interpreting the move as a signal of increased government-led stimulus. The CSI Construction & Engineering Index surged to a seven-month high, and shares of infrastructure-related firms such as Power Construction Corporation of China and Arcplus Group hit their daily 10% upper limit.
The dam is situated in the lower reaches of the Yarlung Zangbo River, where a steep 2,000-meter drop over a 50-kilometre stretch provides substantial hydroelectric potential. However, the location and scale of the project have raised concerns in neighbouring India and Bangladesh, as the river continues downstream as the Brahmaputra, a vital waterway for millions.
Environmental groups have also voiced alarm over potential harm to biodiversity on the Tibetan Plateau, widely regarded as one of the world’s most ecologically sensitive regions. Beijing has stated that the project is designed to meet power demands in Tibet and the broader country, while minimizing downstream and ecological impacts.
No official figures have been released on job creation or displacement linked to the project. By comparison, the Three Gorges Dam, completed over nearly 20 years, created close to one million jobs but also displaced a similar number of people, according to previous state media reports.
Shares of companies involved in tunnel equipment, monitoring technologies, and civil explosives all saw sharp gains following the announcement, with several reaching their maximum daily limits. Huatai Securities noted in a client briefing that the project would drive substantial demand for construction materials such as cement and explosives.
The hydropower dam is expected to begin operations in the 2030s, further expanding China’s renewable energy output while reinforcing the state’s infrastructure-led economic strategy.
