Shandong Province plans to invest 20.6 billion yuan (3.2 billion U.S. dollars) in the construction of the eastern route of the South-North Water Diversion Project (SNWD) over the next two years, local authorities said.

The investments will fund the construction of 11 water projects along or near the Beijing-Hangzhou Grand Canal that passes the province, according to the Shandong Administration for SNWD.

The projects, expected to be completed in 2013, will bring water to drought-prone Shandong and Tianjin, a northern municipality, ensuring local demands for drinking, industrial and agricultural water.

China has been working on the South-North Water Diversion Project, which consists of three routes -- eastern, middle, and western. The eastern channel will use the Grand Canal, the world's longest artificial waterway initially built 2,500 years ago.

Shandong has been building its part of the eastern route since 2002, completing investments of 12.5 billion yuan as of late September.