China Starts Construction of Mega Dam worth $167 Billion

China officially launched the construction of a colossal hydroelectric dam in Tibet, a project slated to become one of the largest infrastructure undertakings in the nation’s history, in a move that could heighten already strained relations with neighboring India.

The groundbreaking ceremony, held on Saturday, was presided over by Chinese Premier Li Qiang, marking the formal start of development on the lower reaches of the Yarlung Tsangpo River. According to state-run Xinhua News Agency, the project carries a staggering price tag of 1.2 trillion yuan ($167 billion).

The project will be executed by a newly established state-owned entity, China Yajiang Group, and includes a series of five interconnected dams. The complex will be located in Nyingchi, a city in southeastern Tibet Autonomous Region, near the contentious border area with India’s Arunachal Pradesh, a territory claimed by both countries.

The hydroelectric initiative is designed primarily to export power out of Tibet, although a portion will be used locally. While specific generation capacity figures were not disclosed, the total investment places the project among the most expensive infrastructure builds in Chinese history, underscoring Beijing’s push to bolster economic growth through large-scale construction.

However, the project's location has triggered geopolitical alarms in New Delhi. The Yarlung Tsangpo River flows downstream into India, where it is known as the Brahmaputra, one of the subcontinent's most vital waterways. Indian officials have long expressed concern about Chinese damming activities on the upper reaches of the river, fearing disruptions to water flow, ecological balance, and regional stability.

Despite the concerns, China has maintained that the project poses no negative impact to downstream regions.

Beyond geopolitical tensions, environmental activists have warned about the consequences of building dams in the geologically fragile region. The Yarlung Tsangpo Gorge — where the river descends nearly 2,000 meters over just 50 kilometers — is not only among the world’s deepest canyons but also lies within a protected national nature reserve, renowned for its rich biodiversity.

“This area is a biological treasure trove, and tampering with its delicate ecosystems could be catastrophic,” said one Chinese environmental researcher, who asked not to be named due to the sensitivity of the issue.