China’s $170bn hydropower dam project raises environmental concerns

By Obiabin Onukwugha

Construction has begun on what will be the world’s largest hydropower dam, on the eastern rim of the Tibetan Plateau, at an estimated cost of at least $170 billion, China’s Premier, Li Quang, has announced.

The hydropower project is said to be China’s most ambitious dam project since the Three Gorges Dam on the Yangtze. Made up of five cascade hydropower stations with the capacity to produce 300 billion kilowatt-hours of electricity annually, equal to the amount of electricity consumed by Britain last year, the dam will be located in the lower reaches of the Yarlung Zangbo.

Accordong to reports, a section of the river tumbles 2,000 metres (6,561 feet) in a span of 50km (31 miles), offering huge hydropower potential.

However there are environmental concerns by stakeholders. India and Bangladesh have already raised concerns about its possible impact on the millions of people downstream, while NGOs warned of the risk to one of the richest and most diverse environments on the plateau.

Reuters report that Beijing has said the dam will help meet power demand in Tibet and the rest of China without having a major effect on downstream water supplies or the environment, with operations expected sometime in the 2030s.

“From an investment perspective, mature hydropower projects offer bond-like dividends,” Wang Zhuo, partner of Shanghai Zhuozhu Investment Management said, while cautioning that speculative buying into related stocks would inflate valuations.
The project will drive demand for construction and building materials such as cement and civil explosives, Huatai Securities said in a note to clients.

The Chinese premier described the dam as a “project of the century” and said special emphasis “must be placed on ecological conservation to prevent environmental damage,” Xinhua said on Saturday.

Government bond yields rose across the board on Monday, with the most-traded 30-year treasury futures falling to five-week lows, as investors interpreted the news as part of China’s economic stimulus.