Substations are connecting the generating station, transmission systems and load centers. Most studies about substation reliability focus on only reliability adequacy by neglecting the protection failures. The reliability of substation without considering protection failure has its own effects on the substation reliability. In this thesis, evaluating and enhancing the reliability of substations based on protection failures is analyzed using fault and event tree analysis methods. For this analysis, the actual failure statics from Bahir Dar II substation is used. The reliability of existing Bahir Dar II substation based on protection failure is evaluated using reliability indexes of energy not supplied and economy lost per year. The maximum, average and minimum energy not supplied due to protection failure in the existing Bahir Dar II substation is 31361.85 MWh/year, 17056.912 MWh/year and 2752.18 MWh/year during the substation operating at maximum, average and minimum power flow conditions. The economic loss in the existing Bahir Dar II substation due to protection failure is 16×106 Birr/year, 8.7×106 Birr/year and 1.4×106 Birr/year during the conditions of the substation at maximum, average and minimum energy not supplied to the customers. The reliability indexes which are energy not supplied in the existing Bahir Dar II substation due to protection failure is higher while comparing to other country's energy not supplied due to protection failures. The reliability between different substation configurations due to protection failure is also compared using fault and event tree analysis methods which are used for enhancing the reliability of substations. The sensitivity analysis is conducted in the substation to indicate which substation components are more sensitive. To enhance the reliability of Bahir Dar II substation, the high voltage switching configuration reconfigured using ½ circuit breaker substation configurations, whereas in the low voltage side the feeders reconfigured using bus bar sectionalized circuit breaker with bypass isolator configurations. The reconfigured Bahir Dar II substation is enhancing the reliability of Bahir Dar II substation by 21.82% and reduces the economic loss by 21.82% during the substation operated at maximum and average power flow conditions.