China will invest 100 billion yuan ($12.9 billion) in projects in Tibet, including an extension of its first railway, state media reported.

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The money will be spent on 180 projects in the years up to 2010, including upgrading an airport; extending availability of drinking water, electricity and telephone lines to herding communities; and building a railway from regional capital Lhasa to Xigaze, the region's second-largest city, the Xinhua news agency reported late on Monday.

The vice chairman of the regional government, Hao Peng, said the new wave of infrastructure investment would be tilted towards herding regions "so farmers and herders and the grassroots population will fully enjoy the fruits of reform and development," Xinhua reported.

Between 1994 and 2005, the Chinese central government invested about 63 billion yuan ($8.1 billion) in large infrastructure projects in Tibet.