The plant had managed to reach 1040 MW production on a few occasions, which is beyond its capacity and a rare precedence in hydel power sector.

The project was intended to begin in 2002 and be completed in 2008 but this time-frame experienced significant delays due to problems meeting rising costs.

[8] On 1 November, Pakistan's Prime Minister Syed Yusuf Raza Gilani publicly stated his concern for the project's delay.

[9] The project was constructed under the supervision of the Water and Power Development Authority (WAPDA) and funding was achieved through the Neelum Jhelum Hydropower Company, taxes, bond offerings, middle-eastern and Chinese banks.

[15] All the civil work including tunnel boring, installation of generators and turbines was completed and water filling of the dam began on 17 October 2017 to put it on the test.

The Kishanganga Hydroelectric Plant operates in a similar way to the Neelum–Jhelum, using a dam to divert a portion of the Neelum waters (58.4 m3/s (2,062 cu ft/s)) to a power station before it is discharged into Bonar Nalla, another tributary of Jhelum.

The court ruled that India was permitted to divert waters from one tributary to another for power generation, and it had priority as it started the Kishanganga project before Neelum–Jhelum.

From the surge chamber, the water is split into four different penstocks which feed each of the four 242.25 MW Francis turbine-generators in the underground power house.

[10] The tail race tunnel of the dam cracked, collapsed and got blocked in July 2022 leading to the shutdown of the power plant.

[28] On April 3, 2024, electricity generation from the Neelum-Jhelum Hydel Power Station was restricted to 530 MW due to decrease in head race tunnel pressure.

On May 3, 2024, electricity generation from the Neelum-Jhelum Hydel Power Station was stopped for the physical inspection of the head race tunnel to locate and fix the problem.