Abstract: The 21st century revival of large-scale water resources development projects makes it important to keep assessing their impacts – preferably from an interdisciplinary perspective – in order to not repeat past mistakes and explore whether they could improve livelihood conditions for rural communities. In this study, costs and benefits of the World Bank-funded Ribb Irrigation and Drainage Project (RIDP) were investigated using a unique systems approach. The impact for farmers with different initial farming systems (rainfed – residual moisture – irrigated) was studied using field observations, document analyses, remote sensing, agronomic data and semi-structured interviews (n = 165). Data on project-induced changes to land and water availability, cropping patterns, farming systems and farm-level economics were collected. The results show that dam and dyke construction has reduced flooding, which has resulted in declining rice productivity ( – 42%) and concomitant shifts to lower value cropping systems. Results also reveal that the land redistribution has caused widespread livelihood deterioration as households had to give up 25% of their farmland and the communal grazing land was fully converted into farmland. Due to top-down implementation, nontransparent communication, delayed construction and lagging financial compensation, social resistance has appeared in the command area, impeding the construction works. In addition to these problems, if no rapid change to higher value crops can be realized, 20.5% of the farmers (those who already irrigate) will experience a loss of livelihood, 64.1% of the farmers (those with rainfed and residual moisture cultivation) will be on the verge of livelihood deterioration and only 13.5% of the farmers (those with solely rainfed cultivation) will enjoy RIDP-induced improved livelihoods. The fate of this project stresses the importance of investigating initial farming systems, exploring worthy project alternatives, improving participation, communication and benefit-sharing and strengthening the institutional capacity of implementing authorities.