Lesotho's energy balance is largely dominated by combustible renewable resources. However, the country is well endowed with hydropower resources for the development of both large and small-scale hydropower projects. There are several challenges that have to be addressed in order to reap the full benefits of this resource. Some of the main challenges are high capital investment costs on projects of this nature and heavy siltation of small reservoirs due to extensive soil erosion. Various studies countrywide have identified 22 sites, with a combined potential of more than 20 MW to be suitable for small hydropower development. Of these sites, 4 have been developed to operational from mid 1980's to early 1990's. The plants were designed as hybrid system with diesel generator sets. Three of those plants operate on a river run-off system. It has been a general practice that the plants run on diesel for most periods of the year, which render them more expensive to run. Currently, 2 of the plants are mothballed as a result of the costs and other operational problems frequently encountered. This paper gives an overview of the setbacks that inhibit the smooth operation of small hydropower plants in Lesotho. (C) 2012 Elsevier Ltd. All rights reserved.