The dam supports a power station with a design capacity of 100 MW of electricity.

[7] Construction of Naghlu Dam was financed and supervised by the Soviet Union between January 1960 and 1968.

After the 1992 collapse of the Soviet-backed Democratic Republic of Afghanistan, the power station was used by supporters of Gulbuddin Hekmatyar as a tool to deprive Kabul of electricity.

In August 2006, the Afghan Ministry of Energy and Water awarded the Russian company Technopromexport a $32.5 million contract to rehabilitate the two inoperable generators and replace the transformers.

[10] In January 2016, the World Bank granted Afghanistan $83 million dollars in aid to completely rebuild the Naghlu Dam.