Lake Tana sub-basin is known to have significant water resources potential and naturalrnassets. In light of this fact, there are a number of water development schemes in thernregion on the hydropower and irrigation sectors. ARBIMPP outlines more than 121,000rnha net irrigation area for Lake Tana sub-basin (BCEOM, 1998). However, currently therernare only two hydropower plants operational, with total generating capacity of 84MW.rnThough the hydropower sector is the sole water user, the water level of Lake Tana fell torna historic low level in June 2003. This had an effect on both the lake’s ecology and thernnavigation sector. In this study a scenario based analysis of the water developmentrnschemes was conducted using WEAP. Scenarios were based on 44 year time series ofrnflow, rainfall and evaporation, 1960-2004. Each scenario was undertaken to determinernthe likely effects of a different degree of future water resource development on the waterrnlevels of Lake Tana and hence the implications for the lake ecosystem. Furthermore, thernpotential of the sub-basin’s water resources for the proposed projects were assessed. Thernsimulation results revealed that the water levels of the lake were lowered in all thernscenarios when compared to the ‘virgin’ situation since water abstraction increases forrnthe projects. Nevertheless, the drawdowns were severe only during dry years. Forrnexample, for the future development scenario with the cropping pattern in the irrigationrnschemes dominated by rice, the average lake level was reduced by about 1.2 meters fromrnthe observed levels during the period 1980-1988. This indicates a reduction in the littoralrnzone, which is biologically rich area of the lake, by about 23%. For each scenariornanalysis of the model outputs was undertaken to determine the extent of “unmetrndemands†in both the hydropower and irrigation sectors. Frequency analysis of lakernwater-levels was also undertaken to determine the likely impact on shipping on the lake.rnFor each scenario the water resource implications of maintaining environmental flowsrndownstream to the Tis Issat Falls, including the impact on lake water-levels wasrndetermined. In general, the simulation results indicate the need, in future, to carefullyrnassess trade-offs among the sub-basins water resource users.rnKey words: Lake Tana sub-basin, lake level, water resources development and waterrndemand sectors.