Ethiopia is a developing country with a total access to electricity not exceeding 58% (in 2017) and the number of household connected to this access is 25%. About 85% of the population lives in places where access to electricity is less than 5%. The village for this study, Zalima rural Village (11.610 N, 28.400 E) has a total population of 2035 and 275 households. The village is about 1.2km from Fetam Irrigation canal power house substation; which makes the extension of the grid not yet practical and off grid electrification is the best option for the village. The community in the Zalima Village uses Kerosene for lighting, water for milling and biomass for cooking and dry cells for radios. Nothing has been done so far in developing the renewable energy resources, such as micro hydro energy in the village. In this study, finical and economic feasibility of micro hydro power electric supply system to the village is analyzed using HOMER software as complete sensitivity analysis tool. Hydro potential of the village is analyzed by measuring the gross head of the irrigation canal with the help of serving data and stream flow irrigation canal data obtained from Bureau of Water, Irrigation and Energy of Development of Amhara. Electric load for the basic needs of the community, such as, for lighting, radio, water pumps, and flour mills is estimated. One primary school and one health posts are also considered for the community. Additionally one Orthodox churches also considered. As a result, many feasible standalone the system was then optimized and determined the best configuration result using the Homer software. For primary load of 203 kwh/d and 18.9 KW hydro turbines backup Generator 7KW. Micro-hydro system combinations are generated, and accordingly, total net present cost (NPC) of the micro hydro configuration and cost of energy (COE) for micro hydro system is $67,044 and $0.07/kWh, respectively. Further HOMER calculates the emissions of the following six pollutants CO2, CO, UHC, PM, SO2, & NO2 as a result the system is environmentally friendly and free from greenhouse gases. These facts indicate that electrifying rural villages using micro hydro systems is beneficial and suitable for long-term investments.