The dam's main purpose is for the generation of hydro-power and is one of the sixteen major dams that comprise the Snowy Mountains Scheme, a vast hydroelectricity and irrigation complex constructed in south-east Australia between 1949 and 1974 and now run by Snowy Hydro.

The dam was constructed by Societe Dumez based on engineering plans developed under contract by the Snowy Mountains Hydroelectric Authority.

At 100% capacity the dam wall holds back 43,542,000 cubic metres (35,300 acre⋅ft) of water.

A 14.4 megawatts (19,300 hp) small hydroelectric power station was completed in 2010 and is attached to the diverted flow of the Tumut River below the Jounama Dam wall.

It is claimed that the small hydro facility generates enough energy to power 6,800 homes.