Climate change exacerbates hydrological variability in arid regions, rendering conventional single-reservoir systems increasingly vulnerable to prolonged droughts. This study proposes a novel Water-Energy Nexus solution by transforming an existing single dam into a multi-dam Seasonal Pumped-Storage Hydropower system. Using the Wadi Dayqah Dam in Oman as a case study, a hydro-economic optimization framework was developed in GAMS to evaluate system performance under both deterministic (37-year) and stochastic (scenario-based) conditions. Results demonstrate that the proposed 4-Dam configuration improves water supply reliability from 88.7% (baseline) to 100% under historical conditions and maintains an average reliability of 95% under severe stochastic uncertainty. Economically, the system increases the total net benefit to 897 million Omani Rials, a 46% gain over the optimized single-dam alternative driven by 1.77 terawatt-hours of annual energy generation. Sensitivity analysis reveals a structural decoupling where water security remains inelastic to market volatility, while profitability responds aggressively to energy price signals. These findings quantify the value of structural adaptation, offering a roadmap for transforming vulnerable water infrastructure into resilient water batteries that support both water security and clean energy transitions in developing arid nations.