The Neelum–Jhelum Dam is a tall and long gravity dam. It withholds a pondage (reservoir) with a capacity of which is peak storage. The dam diverts up to of the Neelum southeast into a long head-race tunnel, the first of the head-race is two tunnels which later meet into one. The tunnel passes below the Jhelum River and through its bend. At the terminus of the tunnel, the water reaches the surge chamber which contains a tall surge shaft (to prevent water hammer) and a long surge tunnel. From the surge chamber, the water is split into four different penstocks which feed each of the four 242 MW Francis turbine-generators in the underground power house. After being used to generate electricity, the water is discharged southeast back into the Jhelum River at through a long tail-race tunnel. The drop in elevation between the dam and power station afford an average hydraulic head of . The tail race tunnel of the dam cracked, collapsed and got blocked in July 2022 leading to the shutdown of the power plant. It is expected to resume power generation from July 2023.
