Banasura Sagar Dam is situated 15 km north west of Kalpetta. It is the second largest earth dam in Asia and the largest in India. The dam has been constructed on Banasura Lake, situated amidst the Banasura Hills. It is believed that these hills were named after the demon king Banasura, who was the son of king Mahabali. It is a popular picnic spot which offers boating and other recreational activities. The dam was built using big stones and boulders. This dam site is also considered to be an ideal trekking point. Tourists can visit this dam during the monsoon season, when small islands can be seen in the dam reservoir. It was constructed under the Indian Banasura Sagar Project that was started with an aim of supporting the Kakkayam Hydro Electric Power Project. This project also aimed at contributing to the drinking water and irrigation requirements of the locals during the hot summer season.