The power houses will be constructed on Hydel Channel, which is downstream from Shahpurkandi Dam.
The water released by Ranjit Sagar Dam is to be utilised for generating power for this project.
The construction of the dam is as per the framework of the Indus Waters Treaty regarding sharing of rivers between India and Pakistan.
[1][2] The project comprises seven hydro-generating sets located in two power houses 6 nos.
The water released from the upstream Ranjit Sagar Dam, after generating electricity through the 600 MW power house during peak hours, is stored in the balancing reservoir to supply water to the irrigation canals continuously without any overflow into the downstream river.