China has officially begun construction on what is set to become the world’s largest hydropower dam, situated on the eastern edge of the Tibetan Plateau. The project, announced by Premier Li Qiang and reported by the state-run Xinhua news agency, is expected to cost an estimated $170 billion and marks China’s most ambitious hydroelectric endeavor since the Three Gorges Dam.
The massive complex, to be built on the lower reaches of the Yarlung Zangbo River, will consist of five cascading hydropower stations. This section of the river experiences a dramatic 2,000-meter (6,561-foot) drop over just 50 kilometers (31 miles), offering immense hydropower potential. The dam is projected to generate up to 300 billion kilowatt-hours of electricity annually, which Beijing says will meet growing energy demands in Tibet and across China.
Premier Li called the project a “project of the century” and emphasized the importance of ecological protection during construction. “Special emphasis must be placed on ecological conservation to prevent environmental damage,” he said.
However, the project has sparked concern from neighboring countries and environmental groups. India and Bangladesh, which lie downstream of the Yarlung Zangbo (known as the Brahmaputra River once it crosses into India), have voiced apprehension about the dam’s potential impact on water flows and the livelihoods of millions. NGOs, including the International Campaign for Tibet, warn of irreversible damage to one of the most biodiverse regions on the Tibetan Plateau.
China has dismissed these concerns, maintaining that the project will not significantly disrupt downstream water supplies or the environment. No official estimates have been provided on the number of people who might be displaced or on the environmental impact assessments conducted so far.
The announcement has also sent ripples through financial markets. China’s CSI Construction & Engineering Index surged by as much as 4% to a seven-month high. Major engineering firms, such as Power Construction Corporation of China and Arcplus Group PLC, hit their daily limit with 10% gains. Tunnel equipment provider Hunan Wuxin Tunnel Intelligent Equipment Co and Geokang Technologies Co Ltd, a maker of monitoring terminals, both surged 30%.
Cement manufacturer Xizang Tianlu Co Ltd and civil explosives producer Tibet GaoZheng Explosive Co also rose by their daily maximum, reflecting the anticipated surge in demand for construction materials. Analysts at Huatai Securities noted that the project would significantly benefit industries linked to infrastructure and engineering supplies.
Wang Zhuo, a partner at Shanghai Zhuozhu Investment Management, described the dam as offering “long-term investment opportunities” while also cautioning that speculative buying could lead to overvaluation in related stocks.
While construction is underway, many questions remain, particularly regarding the social and ecological costs. The Three Gorges Dam displaced nearly one million people; authorities have yet to clarify if similar displacement is expected with this new project.
Operations are slated to begin sometime in the 2030s. Until then, China’s bold step in energy infrastructure is likely to remain under intense global scrutiny.
Written By Rodney Mbua
