The dam is a project of the Ethiopian Water Works Construction Enterprise (EWWCE).

The dam is aimed at providing irrigation primarily for the Tendaho Sugar Factory sugar cane plantation.,[1] as well as drinking water for the region.

Out of the 60,000 hectares of land planned to be irrigated, 10,000 would be allotted for social services and the community, and the remaining 50,000 hectares for cultivating sugar cane for the sugar factory.

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