China Launches Mega Hydro Power Project Amid Economic Recovery Efforts

China has launched its largest dam project, the Yarlung Zangbo River dam, with a total investment of $167 bln. The dam will comprise five cascade hydropower stations and is expected to begin operating in the early 2030s. Once operational, it will dwarf the electrical output and scale of China's Three Gorges Dam. Analysts at UBS highlight key sector and stock beneficiaries, including Weichai Power, Sinotruk, CNBM, and Tibet Tianlu. The project is expected to boost demand for heavy-duty trucks, cement, and steel.

China has initiated construction on what is set to become the world's largest hydropower dam, the Yarlung Zangbo River dam, with an estimated total investment of $167 billion. The project, which includes five cascade hydropower stations, is expected to begin operations in the early 2030s [1]. This mega-project will significantly boost China's energy output, potentially dwarfing the Three Gorges Dam, currently the largest in the world [2].

The Yarlung Zangbo River dam is located on the eastern rim of the Tibetan Plateau, where the river drops more than 6,500 feet in just 31 miles, presenting vast hydroelectric potential. The project aims to generate 300 billion kilowatt-hours of electricity annually, equivalent to the total electricity consumption of the United Kingdom last year [3]. This massive energy output will meet growing electricity needs both in Tibet and across China.

The dam's construction is expected to have significant economic implications. Analysts at UBS highlight key sector and stock beneficiaries, including Weichai Power, Sinotruk, CNBM, and Tibet Tianlu. The project is anticipated to boost demand for heavy-duty trucks, cement, and steel [3]. These sectors are likely to experience increased activity due to the dam's construction and subsequent energy production.

Geopolitically, the project is not without controversy. India has expressed concerns about the dam's impact on downstream water supplies, particularly in Bangladesh and India, which rely on the Brahmaputra for irrigation, hydropower, and drinking water. China maintains that the dam will not significantly affect downstream water supplies or the environment, and has pledged to communicate with downstream countries regarding hydrological information, flood control, and disaster mitigation cooperation [2].

Despite concerns, the dam's construction is proceeding. Chinese officials emphasize the project's strategic importance, noting that it will prioritize ecological preservation and special emphasis must be placed on ecological conservation to prevent environmental damage [3]. The dam's construction is a significant milestone in China's energy and infrastructure development, with implications for both domestic and international markets.

References:
[1] https://www.aljazeera.com/news/2025/7/22/china-starts-construction-of-worlds-biggest-hydropower-dam-in-tibet
[2] https://www.reuters.com/world/china/why-chinas-neighbours-are-worried-about-its-new-mega-dam-project-2025-07-22/
[3] https://www.newsweek.com/china-worlds-largest-hydropower-dam-construction-begins-2104185