The growing population of Amudarya River basin has resulted in an increased demand for water for food and hydropower generation. Most of the renewable water resources are transboundary with the main rivers flowing through several states. The hydropower generation potential is upstream, where the key reservoirs regulate the river flow, while the irrigated land, requiring 80% of the river flow, is located downstream. With water in short supply the competition for water between the upstream hydropower and the downstream agriculture results in reduced water use efficiency, and overall, in reduced basin-wide water productivity. Since first best solution is complicated due to transboundary nature of the Amudarya River, second best solution is proposed aiming mitigating competition for water by improving water and energy use efficiency.