Small Hydro Power (SHP) has been identified as one of the appropriate and environment friendly, renewable energy sources which can provide convenient and uninterrupted energy to remote rural villages, which are yet to be electrified. The development of SHP in remote and hilly areas will obviously result in comprehensive socio-economic development of such areas. Providing power supply through RE systems has a much larger socio-economic impact, in that it would facilitate improved income generation in the rural setting. Providing power supply to villages would enable small and village level industries to be established, communication facilities improved etc., there by reducing migration to urban centres, which are already under tremendous strain due to inadequate conditions.

Hydroelectric power plants convert the energy from flowing water in rivers and streams into electricity. Micro-hydro plants producing less than 100 kilowatts (0.1 megawatts) have very low impact on environment. Therefore, micro-hydropower is recognized as a renewable source of energy, which is economic, non polluting and environmentally sustainable and ideal for rural electrification.
Currently 2 billion people have no access to modern commercial energy. Rural electrification is recognized as a ncessary condition for alleviating poverty, satisfying basic human needs, stimulating productive employment and income generation.

Upon request, UNIDO assists developing countries at every stage of micro-hydro power development, including.