The reservoir is constructed building a dam across Yan Oya which flows to sea from Pulmoddai in the Eastern Province.

The project would be capable of solving water problems in the North Central Province including Kebithigollewa, Padaviya, Welioya, and Medawchchiya.

China CAMC Engineering Corporation in November 2011 signed a contract with Ministry of Irrigation and Water Resources Management to build the Yan Oya water reservoir.

The project includes two main irrigational channels along the banks of Yan Oya and an anicut dam to release surplus water to the nearly 20 kilometers long channels. Once completed the anicut scheme would be able to feed more than 50 medium and micro scale tanks.

The reservoir with a capacity of 254 million cubic meters is expected to provide water to 5000 hectare and to benefit directly 10,000 farmer families who are currently affected by acute drought throughout the year.

According to the Ministry, the project, estimated to cost US$ 176 million, will boost agricultural production and inland fishery development benefitting the local economy and creating more employment opportunities for the local youth in the Northeast.