Finchaa-Amarti-Nashe (FAN) project generates 97MW and irrigates land on more than 5,200 hectares so as to realize the Growth and Transformation Plan (GTP) and boost the national economy by increasing the existing level of energy sector. However, Ethiopia is characterized by negative history of dam induced displacement and its functions (compensation and resettlement); top-down planning for dams’ construction; highly politicized development of hydro powers; lack of environmental protection and Integrated Watershed Management in watersheds. Accordingly, the FAN project has displaced more than 10,000 people and local investors against their will and neither compensation nor resettlement are made yet. This is due the incumbent weak and corrupt government officials and project executives. Further more, the lives of the local communities are deteriorating following the disruption of their economic activities, social and cultural lifestyles, poor compensation and resettlement patterns accelerating rates of environmental degradation. Hence, the project is not environmentally sound and sustainable on one hand and the local people are victims of the project on the other.