The Ministry of Finance and the Ministry of Water Resources have jointly issued the Interim Measures for the Administration of Financial Subsidy Funds for Rural Hydropower Enhancement, Capacity Expansion, and Reconstruction. It is clarified that the central subsidy funds will be provided to support Zhejiang and Chongqing in the 2011-2012 pilot project for rural hydropower efficiency expansion, Hubei, Hunan, and Guangxi and Shaanxi carried out some pilot projects.

According to statistics, there were more than 5,700, nearly 8 million kilowatts of rural hydropower stations built or scrapped before 1995. Due to the constraints of the technological level and economic conditions at that time, the equipment and facilities of rural hydropower stations that were built in the early days were aging and the energy efficiency was declining year by year. This not only caused a huge waste of hydropower resources, but also affected the river's ecological environment. It also brought a number of safety hazards. In order to increase the efficiency of water energy resources utilization, ensure rural electricity demand, and promote the sustainable and orderly development of rural hydropower, the central government has decided to allocate funds from special funds for renewable energy to support the expansion of efficiency and capacity expansion.

According to the pilot implementation plan of 6 provinces (autonomous regions and municipalities) jointly approved by the two departments, the pilot project totaled 620. The installed capacity before the transformation was 881,000 kilowatts, and the average annual power generation in the first three years was 2.75 billion kwh. The installed capacity after the transformation will be It reached 1.102 million kilowatts and annual power generation reached 3.91 billion kwh. The installed capacity and power generation increased by 25.1% and 42.2% respectively.

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