This article explores the potential of hydropower, including small-scale units, in the context of the Small Independent Power Producers project proposed by the Government of Mauritius. Its dependency on rainfall is investigated. The revamping of existing hydropower facilities to attain higher efficiency is also analyzed. Pumped hydropower is found to be a possible solution to the problem of peak electricity demand in Mauritius. This will reduce the need for investing in fossil-fuel-based power generation. However, its capital investment can be high and cases have to be considered on their specific merits. Recommendations are made to optimally exploit the limited potential of hydropower in Mauritius.