Inside China’s $167 bn Tibet dam and why India has more than just power to worry about

China has broken ground on a $167 billion mega-dam in Tibet’s Yarlung Tsangpo river basin, signaling a new phase in its high-stakes hydropower expansion near the India border.

Premier Li Qiang inaugurated the project Saturday in Nyingchi, a city in southeastern Tibet, state-run Xinhua News Agency reported. The project—one of China’s most expensive infrastructure undertakings to date—will be developed by the newly formed China Yajiang Group.

Bloomberg reported the hydro complex will consist of five cascade dams and be primarily used to export electricity outside the region, though some power will stay for local use. Beijing has not disclosed the facility’s expected capacity.

Strategically located along the Yarlung Tsangpo, which becomes the Brahmaputra River downstream in India, the project could strain already tense relations between the two nuclear-armed neighbors. Beijing has insisted there will be no negative effects on downstream areas, but New Delhi remains wary.

Environmentalists have sounded alarms for years. The Yarlung Tsangpo gorge—where the river drops over 6,500 feet in just 31 miles—is not only geologically volatile but also ecologically rich. It cuts through a national nature reserve and is considered one of China’s top biodiversity hotspots.

The massive investment also comes as Beijing pushes to reboot its slowing economy through aggressive infrastructure spending. The dam, if completed, could be a key plank in China’s broader strategy to enhance energy security and regional development.