China's vast western region has for years been less favored by investors due to its relatively poor infrastructure.

However, one industry has been attracting savvy investors - hydropower plants.

Scores of companies have reportedly been sounding out deals in the region which has good resources for the power industry, accounting for almost all - 80 per cent - of the country's hydropower output.

However, only a tiny 8 per cent of the available natural resource is being harnessed.

The far-reaching power shortage over the last two years has whetted investors' appetite.

Compared with other power-generating industries such as coal-fired plants, small hydropower plants are less capital-intensive and are not affected by the tight transportation and supply of the fuels, an acute problem at present.

The gold rush to build small hydropower plants will certainly contribute to the local economy and help quench the nation's thirst for power.

But if it were done in a disorderly manner and geared up only for the sake of money-making ends - and all the while failing to take into account other issues ranging from environment to ecology - the latest small hydropower building mania could turn out to be a curse rather than a blessing.

Although hydropower is a clean source of energy, dam projects are always controversial, for they often involve displacement of the local population, destruction of the riparian zone and other environment consequences and biodiversity.

However, the signs are encouraging as more and more attention is being paid to such issues when taking on hydropower projects.

A mammoth dam project on the Nujiang River in Yunnan Province has been put on hold after concerns about its impact on the environment and biodiversity were raised and weighted on.

The possible environmental or ecological impact these small hydropower projects will bring should not be overlooked as their aggregate damage could be as big as colossal projects.

(China Daily September 15, 2004)