"The Rathugala project will illuminate the lives of indigenous people and their living standards will also be improved," the power and energy ministry said.
According to reports the inhabitants of Rathugala, trace their ancestry to Kuweni, a leader of indigenous people who was said to have been taken as wife by a visiting Indian prince and later driven to the jungles along with her children.
In the first millennium and earlier seafaring Indian empires especially from North and Eastern regions, expanded out as far as East Asia taking over the land of indigenous peoples and establishing Hindu-Bhuddist kingdoms, similar to the way Europeans later expanded into North and South America.
The areas ranged from present day Thailand, to Vietnam and Indonesia.
Remnant tribal villagers are still found in these countries engaging in practices such as ancestor worship, which is also found in the mainstream communities in some of these countries even now.Sri Lanka's indigenous people are known as Veddah's while they refer to themselves as Wannielaaththo or people of the forest.
Inhabitants of Rathugala are believed to have moved on to simple cultivation after leaving their caves in the last century. They were believed to have been displaced to their current location by the building of the Senanayake Samudra, an irrigation reservoir.
Sri Lanka has a more famous indigenous community in Dambane, also in the same district.