Beijing has officially commenced construction on what is set to become the world’s largest hydropower project, a colossal dam system on the lower reaches of the Yarlung Zangbo River in southeastern Tibet. The massive infrastructure undertaking, named the Medog Hydropower Station, will surpass the scale of the Three Gorges Dam and is expected to generate approximately 300 billion kilowatt-hours of electricity annually once completed.

The project, estimated to cost around 1.2 trillion yuan (approximately USD 168 billion), is part of China’s strategic efforts to stimulate its slowing economy, enhance energy security, and accelerate its transition to renewable energy sources. The dam system consists of five cascade stations and is expected to be fully operational by the 2030s.

The financial markets responded positively to the announcement. Shares of key infrastructure and engineering companies, such as Power Construction Corporation of China and Arcplus Group, surged nearly 10 percent. The CSI Construction & Engineering Index also recorded a 4 percent jump. Analysts from Citi estimate the project could inject as much as 120 billion yuan annually into China’s GDP over the next decade, further reinforcing investor confidence. Government bond yields dropped, indicating increased expectations of continued state-driven economic stimulus.

However, the dam’s construction has sparked significant environmental and geopolitical concerns. India and Bangladesh, located downstream from the project, have voiced strong objections, citing potential threats to water availability, agriculture, and ecosystems. Indian officials have labeled the dam a “ticking water bomb,” pointing to the risk of unilateral control over the vital Brahmaputra River.

Environmental activists and NGOs have also raised alarms about the project's possible irreversible ecological damage. The Yarlung Zangbo River flows through one of the world’s most biodiverse and seismically active regions. Critics warn that the dam could disrupt fragile ecosystems, displace communities, and threaten cultural heritage sites in Tibet.

Despite these concerns, Chinese authorities maintain that the project will be built with environmental protection in mind. They argue that the dam is crucial for stabilizing China’s power grid, reducing carbon emissions, and supporting long-term sustainability goals.

This hydropower development is part of a broader initiative under President Xi Jinping’s infrastructure-led growth strategy, which includes ambitious national water diversion and management projects. The absence of a formal water-sharing agreement between China and its downstream neighbors adds another layer of complexity to the situation, raising fears of increased regional tensions over transboundary water governance.

As construction progresses, the world will closely watch both the engineering achievement and the diplomatic and environmental implications surrounding what may become the most ambitious hydropower endeavor in history.