The Sterkfontein Dam, located just outside the town of Harrismith, in the Free State, province of South Africa, is part of the Tugela-Vaal Water Project and the Drakensberg Pumped Storage Scheme, and located on the Nuwejaarspruit, a tributary of the Wilge River in the upper catchment area of the Vaal River.

However shortly before construction was about to start the site on the Nuwejaarspruit was selected for political reasons because it avoided the partial flooding of the newly planned Bantustan of Qwaqwa in Phuthadichaba.

It could have meant this strategic national resource could have been located in a "foreign country" which would have been unacceptable as seen from the perspective of the current government in that time.

The dam is unique as the majority of water is sourced by diverting flow from the upper reaches of the Tugela river.

The dam was not built on a river but instead, it is sited on what can at best be classed as a large stream in the upper reaches of a valley on the Nuwejaarspruit.

The advantage of this location is the Dam is a highly effective reservoir, since it has the depth to store a large amount of water, with very little loss to evaporation.

The Vaal Dam lake (reservoir) by comparison has a large surface area and is relatively shallow, which results in a higher rate of evaporation.

If the Sterkfontein Dam were to be empty the Driekloof reservoir would retain the water for the pumped storage scheme to operate unimpeded.