It is the centerpiece of the Berg Water Project (BWP) which is designed to capture the winter rainfall and store it for supply to Cape Town during the dry summer months.

It was designed and built in accordance with the United Nations World Commission on Dams, to provide water for Cape Town.

Planning for the Berg river dam began in 1989 by the South African Department of Water Affairs and Forestry.

In April 2002, the Cabinet approved the construction of the dam on condition that the City of Cape Town reduces the demand for water by 20% by 2020.

[2] According to the South African government, the decision to build the dam was taken only after an extensive review of the alternative options.

[6] The dam will increase the water storage capacity to supply Cape Town, South Africa's second largest metropolitan area, from 768 to 898 million cubic metres (623,000 to 728,000 acre⋅ft).

Parallel to the dam's construction alien vegetation was removed from the upper river catchment, significantly increasing the amount of water available for storage and for indigenous plant species.

[2] The scheme was designed to maintain the ecological integrity of the river, including through the release of specific volumes of water for this purpose.

[8] It remains unclear how the above values relate to actual water use in the Berg system, which was 493 million cubic metres (400,000 acre⋅ft) in 2008.

[9] On the basis of a dynamic spatial equilibrium model for the Berg River, it has been estimated that the net present value of economic activities in the basin could be reduced by 11.5%.