The power plant is located on a hillside in Ihala Galagama, in the Ratnapura District in Sabaragamuwa, utilising the run-of-the-river water of the BelihulOya which originates in the protected nature reserve in the mountains above Horton Plains.
The location is a climatically transitional area, in between the dry and wet zones, where the hill country merges with the low country. In the area surrounding the site there are beautiful mountain ranges and several eye-catching waterfalls, natural ponds, boulders and rock formations over which the water flows, to reach the Samanala Wewa reservoir about 20 km south of the plant.