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Summary Ongoing pressures from population growth, recurrent drought, climate, urbanization and industrialization in the Nile Basin raise the importance of finding viable measures to adapt to these stresses. Four tributaries of the Eastern Nile Basin contribute to supplies: the Blue Nile (56%), White Nile-Albert (14%), Atbara (15%) and Sobat (15%). Despite much peer reviewed work addressing conflicts on the Nile, none to date has quantitatively examined opportunities for discovering benefit sharing measures that could protect negative impacts on downstream water users resulting from new upstream water storage developments. The contribution of this paper is to examine the potential for mutually beneficial and sustainable benefit sharing measures from the development and operation of the Grand Ethiopian Renaissance Dam while protecting baseline flows to the downstream countries including flows into the Egyptian High Aswan Dam. An integrated approach is formulated to bring the hydrology, economics and institutions of the region into a unified framework for policy analysis. A dynamic optimization model is developed and applied to identify the opportunities for Pareto Improving measures to operate these two dams for the four Eastern Nile Basin countries: Ethiopia, South Sudan, Sudan, and Egypt. Results indicate a possibility for one country to be better off (Ethiopia) and no country to be worse off from a managed operation of these two storage facilities. Still, despite the optimism of our results, considerable diplomatic negotiation among the four riparians will be required to turn potential gains into actual welfare improvements. [ABSTRACT FROM AUTHOR]