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Constructing a shelter is a great act. Especially if there is a need for a shelter in a town, in which case the reward is limitless.

I see something unusual in the word 'which' here. I think there should be 'this'. I don't think if the conjunction 'which' grammatically fits in the main clause after the If-clause.

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There is nothing wrong with the grammar. Which refers to something previously mentioned, and introduces more information about it.

This is the umbrella which I bought yesterday.

This is the box in which I keep my treasured possessions.

In which case refers to the circumstances of the town really needing a shelter.

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  • Some more examples of "in which case" to talk about a possible or imagined situation: "It may be raining, in which case we will meet indoors"; "I am considering going back to school, in which case I would need to take out a loan".
    – nschneid
    Nov 4, 2021 at 13:56

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