Modern forms of energy are simply not available in rural areas of Ethiopia,rnwhile traditional sources such as fuel wood, cow dung, and crop residue arernbeing depleted rapidly thereby deepening the rural energy crisis. Comparedrnwith other new and renewable sources of energy, micro-hydropower hasrnbeen recognized as being a viable and mature technology. It can be appliedrnimmediately on an economic scale in a flexible manner and canrncomparatively easily bring benefits to the population in isolated areas, whornare so far not covered by national electricity supply grid.rnAbout 84 percent of the Ethiopian people reside in rural areas and less thanrnone percent of this population has access to electricity. However, a numberrnof micro- irrigation dams have been constructed and planned forrnimplementation, especially in Tigray and Amhara Regional States whichrncould generate and provide electricity to the local population. A case studyrnregarding reservoir operational planning had been conducted on Haiba dam,rnwhich is one of the fully implemented micro-irrigation earth dams in TigrayrnRegional State so as to integrate it with micro-hydropower. Accordingly arnnumber of objectives were accomplished like formulation of discrete dynamicrnprogramming model, collecting, processing and analyzing meteorologicalrndata, collecting and preparing input data for the DP model.rnA Visual Basic Program was written to solve the DP model. The main resultsrnobtained were monthly energy output, energy output duration curve andrnoptimal reservoir operation guide curve. The optimal power output of Haibarnreservoir has an electrification capacity of 50 to 650 households each usingrnone light bulb of 40w each.rnThe results of this study showed that it is possible to produce a valuablernamount of electric energy that is very useful in electrifying the ruralrncommunity, from micro-irrigation dams without affecting its irrigationrnixrnservice by applying systems engineering as a planning tool. Based on thernfindings, conclusions and recommendations for further studies are drawn.