The Sabah Power Development Masterplan 1984 has identified the Upper Padas area as one of the promising sites to develop a hydroelectric scheme to cater for the rising need of electricity in Sabah.  

The Upper Padas Hydroelectric Project was originally initiated by the Sabah Electricity Sdn Bhd, but was later transferred to Upper Padas Power Sdn Bhd.  The main components of the Project include:

• A reservoir with surface area of NTWL of 6.6 km² and a regulation storage capacity of 256 Mm³.
• A 130-m high Roller Compacted Concrete (RCC) gravity dam with a gated main spillway.
• A power intake located as a separate structure adjacent to the upstream face of the dam.
• A 9.3-km long concrete lined headrace tunnel with a diameter of 5.5 m connected to a surge shaft located at the downstream end of the tunnel. 
• A 300-m long steel penstock with a diameter of 5.5 m down to a 180-MW power house, equipped with a 3 Francis turbine units.
• A tailrace canal, with a length of 330 m, to return the generation flows to the Upper Padas River.
• Potentially 2 quarry and 3 disposal sites within the Project boundary.
• Establishment of construction camps and residential housing.

In 2018, Upper Padas Power Sdn Bhd has appointed Chemsain Konsultant Sdn Bhd to carry out a (Revised) Special Environmental Impact Assessment (SEIA) for the Project. Under the Environment Protection Department (EPD) of Sabah, a SEIA is required if the Project has special magnitude and sensitivity regarding the environmental impacts which may extend beyond the geographical boundaries of the project site and/or can adversely affect the welfare of local communities.

Among the crucial environmental issues that will be assessed are; soil erosion; water pollution and sedimentation impacts; biomass removal; diversion of river flow (the need to cater for environmental flow); and loss of habitat for flora and fauna due to the creation of reservoir.