- Anhui is using government funds, development finance and private capital to finance one of the world’s most ambitious fusion projects
- The strategy aims to turn fusion from a long-term science project into an investable industrial venture
While much of the global fusion race remains centered on laboratory breakthroughs and government-backed research, China is testing a different way to finance the pursuit of what is often called the ultimate energy source.
Anhui Province has mobilized more than 10 billion yuan ($1.48 billion) in long-term financing for the construction of the Burning Plasma Experimental Superconducting Tokamak (BEST) in Hefei, officials said at a provincial investment and research event on August 3.
The financing strategy is designed to address the unusually high costs and long development cycles of fusion projects.
The province has also loosened performance requirements for government investment funds, allowing investment losses of as much as 80% to be tolerated under certain conditions.
Meanwhile, Anhui has been encouraging banks to strengthen mechanisms protecting officials and investors who make compliant but unsuccessful investments.
The aim is to channel more capital toward early-stage, high-risk technologies with long payback periods.
The BEST project
BEST is the successor to China’s Experimental Advanced Superconducting Tokamak (EAST), a major fusion research facility in Hefei.
A tokamak is a doughnut-shaped machine that uses powerful magnetic fields to contain extremely hot plasma and recreate some of the conditions needed for nuclear fusion.
BEST uses a more compact, high-field magnetic design and aims to demonstrate fusion power generation around 2030.
Construction is already underway at the Institute of Plasma Physics under the Hefei Institutes of Physical Science.
Qin Jinggang (秦经刚), a deputy director of the institute, said major equipment installation has been progressing since the first half of 2026, with the facility scheduled for completion by the end of 2027.
The project is targeting what would be a global first: a compact fusion-energy experimental facility capable of demonstrating electricity generation.
From science project to industry
What distinguishes BEST is not only its technical ambition but also its financing structure.
The project is being developed through a combination of government funding, development finance and specialized corporate investment, with Fusion New Energy (Anhui) Co. serving as the operating entity.
Chinese electric-car maker Nio joined as an early investor, followed by capital from Anhui and Hefei state-owned investment platforms and PetroChina’s Kunlun Capital.
The operating company now has registered capital of about 14.5 billion yuan.
The financing model reflects a broader effort by Chinese local governments to move beyond traditional grants and use state-backed capital to support technologies that may take decades to generate commercial returns.
Building a fusion cluster
Hefei is also trying to turn fusion research into an industrial ecosystem rather than a standalone scientific project.
The city hosts major facilities including EAST, BEST and the Comprehensive Research Facility for Fusion Technology (CRAFT), and has attracted more than 70 companies across the fusion supply chain.
It is also planning a fusion science and technology demonstration zone spanning 2.3 million mu, about 1533 hectares, roughly twice the size of Hangzhou’s West Lake.
That combination of large-scale research infrastructure, government capital and private-sector participation is intended to create a pipeline from experimental physics to commercial equipment and eventually power generation.
Why it matters globally
Fusion has long been regarded as one of the most difficult technologies to commercialize because of its enormous capital requirements, technical uncertainty and exceptionally long development cycles. Governments have therefore remained the dominant source of funding.
Anhui’s approach offers a different model: public money absorbs some of the early risk, development finance extends the investment horizon, and corporate capital is brought into the project before commercial viability is proven.
The speed of construction is another point of interest. Li Jiangang (李建刚), an academician of Chinese Academy of Engineering, has said BEST completed nearly half of its installation work in just over two years, a pace he described as unprecedented globally.
If BEST succeeds in demonstrating fusion power around 2030, it could put China significantly ahead of the current timetable for the International Thermonuclear Experimental Reactor (ITER), the multinational fusion project under construction in France, which is targeting major fusion milestones much later.
The bigger question, however, is not simply whether China can build a fusion machine faster. It is whether a government-backed, multi-investor model can turn fusion from a decades-long scientific pursuit into an industrial technology with a credible path to commercialization.
