The purpose of this study is to evaluate the accuracy of limited climatic parameters and simulated climatic parameters (NewLoclim) through estimation of reference evapotranspiration using CROPWAT 8.0 Model. Full set of climatic parameters is not available to estimate reference evapotranspiration therefore it is important to evaluate the accuracy of limited climatic parameters and simulated climatic parameters against full set of climatic parameters through CROPWAT 8.0 Model, which uses FAO Penman-Monteith method to calculate reference evapotranspiration. SAS 9.0 and Excel were used to analyze correlation coefficient, linear regression and root mean square error (RMSE) for comparison purpose. The result showed that during dry season, reference evapotranspiration estimated using limited climatic parameters with local area mean wind speed (2.5m/s) has a good relationship with reference evapotranspiration calculated using full set of climatic parameters than limited climatic parameters with global mean wind speed (2m/s) and using simulated climatic parameters from NewLoclim model. During rainy season and annually for humid areas of Arsi Zone, reference evapotranspiration estimated using simulated climatic parameters from NewLoclim have good relation with reference evapotranspiration calculated using full set of climatic parameters.