Total Investment of 1.2 Trillion Yuan: Yarlung Zangbo Hydropower Project Commences, Creating Investment Opportunities in Water Conservancy, Power Grid, and Cement Sectors

On the morning of July 19, the groundbreaking ceremony for the downstream hydropower development on the Yarlung Zangbo River took place in Nyingchi City, Tibet Autonomous Region, according to AASTOCKS. The project adopts a configuration that combines river straightening with tunnel-based water diversion, and will feature five cascading hydroelectric stations. With a projected investment of approximately RMB 1.2 trillion, it is anticipated to become the largest hydropower endeavor worldwide and could also rank as the most extensive engineering initiative globally. Companies linked to the project’s concept include Dongfang Electric Corporation (01072), TIMES ELECTRIC (03898), Huaxin Cement (06655), and ZOOMLION (01157).

The investment structure of the Yarlung Zangbo Hydropower Station allocates 60% to infrastructure, 30% to equipment, and 10% to ecological compensation. In contrast, centralized photovoltaic installations channel 70–80% of capital into equipment, with solar panels representing 30–40% of that. This variation reflects distinct investment patterns: hydropower channels expenditure first into construction—spanning civil explosives, engineering services, and construction machinery—before equipment outlays. Photovoltaic projects concentrate predominantly on equipment procurement, particularly solar panels.

Designed primarily for long-distance energy transmission, large hydropower and wind-solar bases prioritize supplying power externally over local usage. The Yarlung Zangbo Hydropower initiative also targets external transmission while meeting regional electricity needs in Tibet. Consequently, significant funding for ultra-high-voltage transmission infrastructure is expected.

The project will incorporate wind, solar, hydro, and storage systems, further integrating renewable sources and enhancing operational compatibility. As the new energy architecture evolves, hybrid generation-storage configurations are becoming increasingly prevalent.

Recent data highlights mounting electricity demand nationwide. China’s power load recently surpassed 1.5 billion kilowatts, with three record highs recorded since July. The China Electricity Council projects peak national power requirements will reach 2 billion kilowatts (2,000 GW) by 2030.

Local power authorities have responded with wide-ranging initiatives across generation, transmission, and consumption. For instance, on July 6, State Grid Jiangsu Electric Power deployed a large-scale energy storage dispatch, activating 64 grid-side and 29 source-side energy stations. The combined discharge capacity hit 71.4 million kilowatts—enough to sustain one hour of electricity for 48 million households. In Shenzhen, the Virtual Power Plant Management Center engaged peak load regulation measures with a maximum response capacity of 11 million kilowatts, quickly mobilizing distributed assets such as charging stations, air conditioners, electric vehicles, and energy storage systems under tier-two intelligent dispatching to ensure grid stability.

On June 26, the National Development and Reform Commission (NDRC) estimated that peak power demand during the summer of 2025 will rise by around 100 million kilowatts compared to the previous year. The nationwide power balance is expected to improve over last summer’s outlook. The National Energy Administration (NEA) reaffirmed its commitment to monitoring fuel supply, reservoir levels, weather conditions, and electricity dynamics, while continuing its “one province, one policy” initiative to secure adequate summer peak supply through regional coordination. 

Early in the year, State Grid and China Southern Power Grid unveiled investment plans for 2025. State Grid’s planned annual investment will surpass RMB 650 billion for the first time, while China Southern Power Grid will invest RMB 175 billion. Together, the two will allocate over RMB 825 billion—marking a record level of spending.

Tianfeng analysis suggests that the Yarlung Zangbo project entails significant construction investment, with primary opportunities in the power generaton and water management sectors. Due to complex downstream geology, foundational preparation will present substantial technical challenges. Key tunnel equipment providers—especially tunnel boring machine manufacturers—should be closely monitored. Blasting operations are also important, with Tibet GaoZheng Explosive cited as a notable participant. Material suppliers, particularly in the cement industry, will play a key role.

East Money Information research indicates that the project’s formal launch will spur demand across various segments including civil explosives, tunneling, and geotechnical services, creating lasting positive momentum.

CITIC Securities notes that the expansion of China's new power system continues to foster a strong investment climate for grid development. Investment in grid infrastructure is forecast to grow by over 10% in 2025, with emphasis on supporting dual-carbon targets and improving both core and distribution network capabilities. The rollout of reserve projects will further support expansion.

Dongfang Electric Corporation (01072): As a flagship unit of Dongfang Electric Group, the company supplies key domestic pumped-storage equipment and operates in power manufacturing, EPC contracting, station services, trade, and finance. Since the 1960s, it has built a diversified power portfolio encompassing hydro, thermal, nuclear, wind, solar, and gas technologies.

TIMES ELECTRIC (03898): Focuses on products for ultra-high-voltage direct current and flexible DC transmission projects. In Q1, revenue reached RMB 45.37 billion (up 14.81% YoY); net profit attributable to shareholders was RMB 6.31 billion (up 13.42%); earnings per share stood at RMB 0.45.

Huaxin Cement (06655): On July 14, the company projected H1 2025 net profit attributable to shareholders to fall between RMB 10.958 billion and RMB 11.32 billion, reflecting a year-on-year increase of 50–55%. Estimated non-recurring net profit was RMB 10.61 billion to RMB 10.95 billion, up 56–61% YoY.

ZOOMLION (01157): In Q1 2025, recorded revenue of RMB 121.17 billion (up 2.92% YoY), with net income attributable to shareholders reaching RMB 14.10 billion (up 53.98%). Domestic demand for construction machinery is recovering, especially for core product lines such as lifting and concrete equipment. International expansion continues amid external headwinds, with areas like earthmoving, agricultural, and mining machinery positioned to support future growth.