A notice from the Ministry of Finance has given the national water conservancy industry a "reassurance pill". After a brief policy gap at the beginning of the year, the National Major Water Conservancy Project Construction Fund has decided to continue its collection until the end of 2030, with the collection standards remaining unchanged. This special fund, which has been in operation for more than ten years, will continue to provide stable funding for the follow-up projects of the South to North Water Diversion Project and the construction of major water conservancy projects in the region.

From Three Gorges Fund to National Major Water Conservancy Fund

The National Major Water Conservancy Project Construction Fund has a profound historical origin. Its predecessor was the "Three Gorges Project Construction Fund" established to safeguard the Three Gorges Project, which raised construction funds through electricity price surcharges. With the completion of the Three Gorges Dam main project, in order to ensure the funding needs of subsequent major water conservancy projects, on December 31, 2009, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Water Resources jointly issued the "Interim Measures for the Management of the Collection and Use of National Major Water Conservancy Project Construction Funds", which stipulated that from January 1, 2010, the collection of the Three Gorges Dam Project Construction Fund would be stopped, and a National Major Water Conservancy Project Construction Fund would be established. This transformation has achieved a smooth transition of funding policies, expanding the use of funds from a single project to multiple fields such as the South to North Water Diversion Project, the follow-up work of the Three Gorges Dam, and the construction of major water conservancy projects in the central and western regions.

A funding mechanism that covers the whole country and is used at different levels

The collection and use of funds have clear institutional designs. The collection scope covers the national sales of electricity except Xizang, which reflects the overall planning concept of "one game for the whole country". In terms of usage, differentiated arrangements will be implemented based on whether the provinces directly benefit from the South to North Water Diversion Three Gorges Project: funds raised by 14 directly benefiting provinces such as Beijing, Tianjin, and Hebei will be turned over to the central treasury for special use in related project construction and subsequent work; The funds raised by 16 non directly beneficiary provinces, including Shanxi, Inner Mongolia, and Liaoning, will be kept in the provincial treasury and specifically used to support the construction of major local water conservancy projects. This collaborative mechanism between the central and local governments not only ensures the implementation of major national strategies, but also caters to the needs of local water conservancy infrastructure to fill gaps.

Financial security capability under standard adjustment

The annual scale of the fund is directly linked to the national electricity consumption and has maintained steady growth in recent years. Data shows that the fund's revenue in 2023 will be 13.656 billion yuan, increasing to 14.482 billion yuan in 2024, and the budgeted revenue in 2025 will reach 15.275 billion yuan. It is worth noting that in the initial stage of establishment, the annual scale of the fund exceeded 30 billion yuan. However, in order to reduce the burden on enterprises and support the development of the real economy, the collection standards underwent three tiered reductions from 2017 to 2019, with a significant cumulative decrease. Despite the decrease in standards, with the continuous growth of electricity consumption in China, the fund size still maintains a stable level of about 15 billion yuan per year, continuing to provide reliable financial support for major water conservancy projects. Keywords: Macro Latest News, Macro Latest Reports

The continued collection of this fund not only provides clear funding expectations for water conservancy construction during the 15th Five Year Plan period, but also demonstrates the country's determination to continuously strengthen water conservancy infrastructure construction. Against the backdrop of an annual investment scale of trillions of yuan in water conservancy construction, the stable supply of this fund will complement market-oriented financing channels and jointly support the improvement of China's modern water network system and the enhancement of water security capabilities.Editor/Gao Xue