Yunnan is criss-crossed by around 600 rivers. They all connect to the six important water systems - the Irrawaddy, Nujiang, Langcang, Yangtze, Honghe and Zhujiang rivers. Yunnan's water resources account for 15.3 per cent of China's total, ranking third among all the provinces, just after Tibet and Sichuan.

About 85.2 per cent of the water resources in the province which can be utilized for generating electricity, center on the Jinsha River, Lancang River and Nujiang River. Recently the Manwan Hydroelectric Station on the Lancang River began operation. The Dachaoshan Hydropower Station with an installed capacity of 1.35 million KW is now under construction. The Lubuge Hydropower Station with an installed capacity of 600,000 KW, is constructed and equipped with the most advanced technology in the country.There are also countless small hydropower stations throughout the province, which are vital to the local economy and the improvement of people's living standards.It is estimated that the total installed capacity which could be developed in Yunnan is over 90 million KW. Electricity is now available in all the 120 cities and counties of the province.

Apart from its rivers Yunnan is known for its numerous limestone fault lakes,around 30 in all, so it has the most fresh-water lakes in southwestern China. These beautiful lakes include the Dianchi Lake in Kunming,the Fuxian Lake in Chengjiang, the Xingyun Lake in Jiangchuan, the Yangzong Lake in Yiliang, the Qili Lake in Tonghai, the Erhai Lake in Dali, the Chenghai Lake in Yongsheng, the Lugu Lake in Ninglang, the Jianhu Lake in Jianchuan, the Zibi Lake in Eryuan, the Yilong Lake in Shiping, and Nanhu, Changqiao and Datun Lakes in Mengzi. The deepest of these lakes is 150 meters and the shallowest no more than 20 meters. They are like numerous shining mirrors embedded in the highland regions. The land around the lakes is very fertile, excellent for farming, and the majority of Yunnan people reside in these areas.

Because of its geographical location, Yunnan has a bright future for the development of solar energy, heat energy, wind energy and geothermal energy. The coal reserves rank ninth among Chinese provinces, with brown coal reserves totalling 1.54 million tons, the largest reserves in the country.