China Begins Construction on $170B World’s Largest Hydropower Dam in Tibet

China has officially begun construction on what will become the world’s largest hydropower dam, located on the lower reaches of the Yarlung Zangbo River on the eastern Tibetan Plateau. The $170 billion megaproject, made up of five cascade hydropower stations, is China’s most ambitious energy infrastructure since the Three Gorges Dam. It is expected to begin operations in the 2030s and generate up to 300 billion kilowatt-hours of electricity annually.

Premier Li Qiang hailed it as a “project of the century,” emphasizing ecological preservation to prevent environmental damage. The dam takes advantage of a dramatic 2,000-meter drop in elevation over just 50 kilometers, offering vast hydroelectric potential.

While Beijing claims the project will meet growing power needs in Tibet and other regions with minimal environmental impact, neighboring India and Bangladesh have voiced concerns about downstream water security. Environmental groups also warn of irreversible harm to one of the planet’s most biodiverse regions and potential displacement of local communities.

News of the project drove a surge in Chinese infrastructure and construction stocks. The CSI Construction & Engineering Index rose 4%, with companies like Power Construction Corporation of China and Arcplus Group PLC hitting their daily 10% limits. Shares of tunnel equipment firm Hunan Wuxin and monitoring tech provider Geokang Technologies soared 30%, while cement maker Xizang Tianlu and explosives producer Tibet GaoZheng also surged.

Analysts say the project presents both long-term investment opportunities and short-term speculative themes. However, they caution that a wave of enthusiasm could temporarily inflate valuations.

The Yarlung Zangbo, which becomes the Brahmaputra River downstream, is already the focus of existing Chinese hydroelectric projects, adding urgency to cross-border concerns in South Asia.