Buško Blato lake, as well as entire watershed system, is a man-made, draining waters of karstaquifer of poljes of Western Herzegovina and Western Bosniaregions, in the heart of Bosnia and Herzegovina Dinaric Alps. These are almost exclusively sinking rivers, draining waters of Livanjsko Polje, Duvanjsko Polje and Kupreško Polje through system of ponors and estavelles, subterranean flows, and karstic wellsprings. The actual lake is elevated 716 m above sea level, has an area of 55.8 km² and a total volume of 782 million m³. One third of the area falls under the jurisdiction of the municipality of Livno while the remaining two-thirds belongs to the municipality of Tomislavgrad. The total area of Buško Blato makes it one of the largest accumulation lakes in all of Europe.
Buško Blato was essentially farmland up until 1974 when it was converted into a lake. The hydroelectric power plant system was conceived mainly to provide electricity for the Dalmatian coastline and further development of tourism. The governments of Bosnia and Herzegovina and Croatia worked together on a project to build a hydroelectric power plant in Rudo called HE Orlovac that would have an output of 237 MW and an average annual yield of 366 GWh. The Bistrica river is largest, and forms Lipsko Lake, near village of Lipa, which is first and smaller of two artificial reservoirs in hydroelectric powerplant system Buško Blato - HE Orlovac, other being Buško Blato reservoir. In this system Lipsko Lake is a compensation basin and serves for regulation of an outflow of water toward intake facility at penstock station "Lipa" at the foot of Kamešnica mountain, and across the border into Croatia where hydroelectric power plant "HE Orlovac" is situated. Lipsko Lake is connected with much larger reservoir of Buško Blato, whose head can rise above head of Lipsko Lake up to several meters, via the reversible canal of "Lipsko-Buško" where it stores an excess waters from Livanjsko Polje and the Bistrica, especially during floodingseason and high precipitation periods. For transfer of these waters over the barrage "Podgradina", at village Podgradina, into Buško Blato reservoir, system uses reversible pumping station "Buško Blato", built at the point where canal reaches barrage.