During the 1960s, power production in Lao PDR was insufficient to meet the national demand. The Mekong Commission as part of a national development plan constructed Nam Ngum 1, the first hydropower scheme in Lao PDR. Feasibility studies presented in 1962 indicated that the dam would not only aid in meeting electricity demand, but would also provide flood mitigation and irrigation benefits.

Nam Ngum Dam is situated 60 kilometers north of Vientiane on the Nam Ngum tributary of the Mekong River. It is a concrete gravity dam with a power station at the base and penstocks within the dam wall. The powerhouse originally contained two 15 MW generators, to which two 40 MW generators were added in 1978 and a third 40 MW generator in 1984.