Construction of the world’s biggest hydropower megadam has begun, China’s premier has said, calling it the “project of the century”.

The huge structure is being built on the Yarlung Tsangpo river, in Tibetan territory.

Li Qiang made the comments on Saturday, at a ceremony in the region to mark the start of the build, leading Chinese markets to rise on the expectation of the long-planned megaproject, first announced in 2020 as part of China’s 14th five-year plan.

The dam has drawn criticism from India and Bangladesh,through which the river runs, as well as Tibetan groups and environmentalists.

The project announced by Li is planned for the lower reaches of the river, according to the official state news outlet, Xinhua. Xinhua reported that the project would consist of five cascade hydropower stations, producing an estimated 300 million megawatt hours of electricity annually at a cost of about 1.2tn RMB (£124bn).

In comparison, the Three Gorges dam cost 254.2bn yuan and generates 88.2m MWh .

No further details were given about timing or scope of construction, but the figures reported by Xinhua exceed estimates from 2020.

China, the world’s biggest carbon emitter, is operating a huge renewable energy expansion as it seeks to reach emissions reduction goals and stabilise its power supply. It has tens of thousands of hydropower projects, far more than any other country.

The Yarlung Tsangpo megadam will reportedly harness the power created by the river dropping 2km in about 50km as it winds through a canyon on a U-shaped bend.