Neelum-Jhelum Hydropower Plant was to begin in 2002 and to complete in 2008. But, the Construction on the 969 MW project began in 2008 and continuously faced financial problems. Due to this delay Pakistan suffered loss of billions of rupees. The new government in 2013 pledged all financial support to the project and the pace of the work was improved.
The Neelum-Jhelum Hydropower Project is a run of the river electricity generation project in Muzaffarabad, Azad Kashmir. It diverts water from the Neelum River through a tunnel and after producing power in the underground power house, the water is discharged into the Jhelum River. The Neelum-Jhelum Hydropower project has a dam, an underground waterway system consisting of 52 kilometers long tunnels, and an underground powerhouse with four power generating units. The 90% of the project is underground and beneath high mountains, has total installed capacity of 969 MW, and total power generation capacity of 5.15 billion units per year.
Prime Minister Shahid Khaqan Abbasi inaugurated the first unit of Neelum-Jhelum project on April 13, 2018, and on July 10, 2018 the power generation from the plant was increased to 726 MW.