Particularly in arid and semiarid areas, more and more populations rely almost entirely on imported water. However, the extent to which intentional discharge into transiting river systems and unintentional leakage may be augmenting water resources for communities along and down gradient of the water transfer scheme has not previously been subject to research. The objective of this study was to assess both the potential of a large-scale water transfer (WT) scheme to increase groundwater availability by channel transmission losses in a large dryland aquifer system (2,166 km²) in Brazil, and the capability of the receiving streams to transport water downstream under a prolonged drought. An integrated surface-water/groundwater model was developed to improve the estimation of the groundwater resources, considering the spatio-temporal variability of infiltrated rainfall for aquifer recharge. Aquifer recharge from the WT scheme was simulated under prolonged drought conditions, applying an uncertainty analysis of the most influential fluxes and parameters. The annual recharge (66 mm/year) was approximately twice the amount of water abstracted (1990–2016); however, the annual recharge dropped to 13.9 mm/year from 2012 to 2016, a drought period. Under similar drought conditions, the additional recharge (6.89 × 106 m³/year) from the WT scheme did not compensate for the decrease in groundwater head in areas that do not surround the receiving streams. Actually, the additional recharge is counteracted by a decrease of 25% of natural groundwater recharge or an increase of 50% in pumping rate; therefore, WT transmission losses alone would not solve the issue of the unsustainable management of groundwater resources.