Environmental flow assessment and maintenance are relatively new practices for thernwater sector, especially in developing countries. The concept of environmental flowrnassessment is new to Ethiopia; so far no studies have been conducted, despite the factrnthat the country is endowed with many natural lakes and rivers. The main objectives ofrnthe research were to determine the environmental flow requirements downstream of thernLake Tana and to investigate the associated social, economic, and environmental impactsrnof the Chara Chara weir. To accomplish these objectives both the survey data andrnhistoric records of hydrological data were used. To analyze the hydrological data therndesktop reserve model (ver.2) were employed. The research indicates that, in order tornmaintain the Abay River at an ecological category of C class, requires an average annualrntotal environmental flow allocation (sum of low and high flows) of 1197.977 MMC,rnwhich is 30% of the Mean Annual Runoff. The model results indicate that the absoluternminimum dry season flow required to maintain the aquatic organisms in the vicinity ofrnthe Tis Issat Falls is 5.271m3/s. However, the actual minimum dry season flow in the arearnwas found to be 2.754 m3/s, (i.e. just 51.9 % of the proposed minimum instream flowrnrequirement). The Water Stress indicator over the falls was calculated to be 1.99. Thisrnimplies that the too little water goes to the falls, which is overexploited by the near byrnhydropower station. Furthermore, the study investigated both the adverse and beneficialrnimpacts of the Chara Chara weir on the downstream villages. The provision ofrnenvironmental flows is not only a scientific question but also a social, economic, andrnpolitical issue. Therefore, establishing an environmental flow regime will involve manyrndifferent actors, from the highest levels of government to local communities. This studyrnprovides sound options that could be used to improve the current situation and tornalleviate the environmental problems in the downstream of Laka Tana; especially in thernvicinity of the Tis Issat Falls, in order to maintain the aquatic biodiversity and to keep thernvisual amenity of the Falls for tourists without, unduly compromising the energy out ofrnthe hydropower station.