Edward MacColl had been thinking about Loch Sloy since 1936. Working for the Central Electricity Board, he proposed something radical: a pumped-storage scheme that would push water uphill from Loch Lomond into Loch Sloy at night, when demand was low, and let it fall back through turbines at peak hours. He called it a reversible hydraulic station. The 1937 review committee whittled his eight turbines down to four, then rejected the whole project as uneconomic. But MacColl kept the file open. When the Hydro-Electric Development (Scotland) Act of 1943 created the North of Scotland Hydro-Electric Board, MacColl became its deputy chairman and produced a list of 102 potential schemes across the Highlands. Loch Sloy moved to the top. The pumping was dropped. A simpler 130-megawatt conventional design was approved on 28 March 1945, six weeks before VE Day.

The post-war labour shortage hit construction immediately. Within months, 398 German prisoners of war joined 45 British workers on the project. They built access roads, camps, and a railway bridge for the West Highland Line. Aggregate came from a quarry at Coiregrogain, moved by a 1.75-mile conveyor belt. Sand came up Loch Lomond from Balloch on tugs pulling dumb barges loaded fifty tons at a time. Portland cement was scarce. An aerial cableway over the dam site allowed concrete to be placed anywhere, and a 3.6-megawatt diesel station was built just to power construction. The weather was savage: continuous rain through 1947 and 1948, regular flooding, mass walkouts of British workers protesting cold huts and inedible food. The cold killed and the wet weakened, but the work continued. Twenty-one men died before the dam was finished. Their plaque is mounted inside the power station they helped build.

James Williamson, one of the Board's panel engineers, designed the dam as a buttress rather than a solid gravity wall. The decision saved roughly twenty percent of the concrete that would otherwise have been needed, a serious benefit when cement was being rationed. The completed structure is 1,171 feet long, 184 feet high, and curves slightly across the valley below Loch Sloy. It raised the loch's surface by 155 feet at full pool and provided a head of 909 feet down to the turbines at Inveruglas on the shore of Loch Lomond. The turbines came from English Electric. The spiral casings weighed 42 tons each, larger than road regulations normally permitted. The alternator rotors weighed 85 tons and required specially adapted railway wagons. When they arrived at the power station, no crane was big enough to unload them and they had to be jacked off the rails.

Loch Sloy's natural catchment was too small for the project. The engineers extended it westward and southward by capturing burns that would otherwise have run to Loch Long, Loch Fyne, and Loch Lomond directly. Tunnels and pipelines now thread through the Arrochar Alps from Eas Riachain and Garbh-allt in the west, to Allt a' Bhalachain and Allt Sugach in the south, to Allt Coiregrogain and Allt Ardvorlich in the east. All of it ends up in Loch Sloy, then drops through pipelines into the powerhouse beside Loch Lomond. The four turbines installed by 1950 were the largest generator sets in Britain at the time, three rated at 40 megawatts and one at 32.5, total capacity 152.5 megawatts. Today the station is operated by Scottish and Southern Energy in standby mode, holding water in the loch and waiting. From a cold start it can reach full output in five minutes, responding to surges anywhere on the British grid.