The dam has a storage capacity of 101 million cubic meters of water and seeks to provide clean water to people in Soomar and Naft Shahr, two border cities near Iraq in the western province, the Energy Ministry news website Paven reported.
Sharaf Shah reservoir dam also provides water for over 3,000 hectares of lands in the region, especially in Soomar and can help expand farming in Soomar, which was occupied during the 1980-88 Iran-Iraq war.
People are involved in farming and animal husbandry in the region, with products such as citrus fruits, grapes and dates among others.
Soomar is located near the Iraqi city of Mandali and is the closest route to northern Baghdad, Samarra and Iraqi Kurdistan, and can become an important hub for the exchange of goods with Iraq.
Naft Shahr is known for its huge oilfields. British explorers found oil there for the first time in 1931. It is the only active oilfield in Kermanshah. The field is shared jointly by Iran and Iraq and provides a portion of Kermanshah's refinery feed.
Supported by government funding, construction of the dam started in 2009 and cost $25 million.