China’s Premier Li Qiang announced the commencement of construction on the world’s largest hydropower dam on the Yarlung Zangbo River in Tibet.
The project is estimated to cost at least $170 billion and will comprise five cascade hydropower stations. Once completed, it will generate 300 billion kilowatt-hours of electricity annually, which is equivalent to the United Kingdom’s total yearly electricity consumption.
The dam is strategically located to take advantage of a 2,000-meter drop over a distance of 50 kilometres, providing significant energy generation potential. Chinese markets reacted positively to the announcement, viewing the project as a means of economic stimulus amid slowing growth. However, India and Bangladesh have raised concerns about the potential impact on downstream water supplies. Additionally, NGOs have raised alarms about the environmental consequences the dam may pose to the biodiversity of the Tibetan Plateau.
China's dam cluster on the Yarlung Zangbo River (Brahmaputra), will include a series of 50 km long tunnel, that drops from an altitude of 3000m down to 800m.
Translating the immense potential energy into kinetic energy/electricity. Capable of providing power to 300 million… pic.twitter.com/Pw9wQNw2hS
— Zhao DaShuai 东北进修🇨🇳 (@zhao_dashuai) July 20, 2025According to Reuters, the dam will feature advanced engineering to harness the river’s steep descent. Operations are projected for the 2030s, with authorities emphasising ecological conservation to minimise damage. As Li Qiang stated, “Special emphasis must be placed on ecological conservation to prevent environmental damage,” Xinhua reported.
The initiative, overseen by the state-owned China Yajiang Group, aligns with China’s push for clean energy and infrastructure-led growth.
Markets interpreted the announcement as a stimulus. The CSI Construction & Engineering Index jumped 4% to a seven-month high. Stocks like Power Construction Corporation of China and Arcplus Group PLC surged 10%. Hunan Wuxin Tunnel Intelligent Equipment Co. and Geokang Technologies Co. Ltd. rose 30%, while cement maker Xizang Tianlu Co. Ltd. and Tibet GaoZheng Explosive Co. gained 10%.
🇨🇳 China launches the construction of what is set to become the world’s largest hydropower project
🌊 The project is located in the remote Yarlung Zangbo River gorge in southwestern Tibet https://t.co/T3jrgU2OTa pic.twitter.com/w0na5xXyOf
— Anadolu English (@anadoluagency) July 20, 2025Citi analysts estimate: “Assuming 10 years of construction, the investment/GDP boost could reach 120 billion yuan ($16.7 billion) for a single year.” Huatai Securities noted an increase in demand for construction materials, such as cement and explosives. Government bond yields rose, with 30-year treasury futures hitting five-week lows, signalling investor optimism.
The Yarlung Zangbo River flows into India’s Brahmaputra River and Bangladesh, raising concerns about water flow disruptions for millions of people downstream. NGOs highlight risks to the plateau’s diverse ecosystem. China assures minimal impact on water supplies and the environment, but critics remain sceptical.
This “project of the century” could create jobs, though estimates are unavailable. The Three Gorges Dam displaced a million people but generated similar numbers of jobs. No displacement figures for Yarlung Zangbo have emerged. Amid faltering drivers, the dam bolsters public investment for growth.
