Abstract-The Danakil Depression is located in Eritrea, a few kilometers inland from the Red Sea coast and sinks 120 meters below sea level. This concept paper attempts to explore Eritrea's ability to develop a hydroelectric and potable water generation capacity from the Red Sea. Unlike many countries with access to seas and oceans, Eritrea is endowed with a natural hydro dam because of its geographical location and topography. The Red Sea can be used as a resource for the production of energy as hydro dam and potable water source through desalination. The availability of cheap, clean and environmentally safe energy and water sources will enable the country to eliminate poverty and stop environmental degradation, thus contributing to reduce or minimize the global warming problem.