Freshwater scarcity is becoming more of a concern as populations grow and economic demands increase. The Dhidhessa River, a critical source for the Abbay River basin, is under pressure. This study looked at how water resource development projects and changes in water flow impact the basin. Water flow was simulated using WEAP model (software), which took into account various water sources and needs. The study also looked at crop water requirements and the level of flow alteration. Future water demand scenarios were created. The first, scenario considered population growth, with projections indicating that unmet water demand would increase significantly by 2050. The second scenario focused on irrigation expansion, which resulted in a significant increase in unmet water demand. These findings demonstrate the impact of both population growth and water resource development for irrigation activities. The study further investigated how flow alterations affect the river. While most months saw little change, a particular section near Dembi was discovered to be more vulnerable. Remarkably, allocating water specifically for environmental needs, in addition to human demands, resulted in a decrease in unmet water demand. This suggests that prioritizing environmental flow management is critical for long-term water use in the Dhidhessa River basin.