The problem of designing small hydroelectric plants has been properly analysed and addressed in terms of maximizing the economic benefits of the investment. An appropriate empirical model describing hydroturbine efficiency was developed. An overall plant model was introduced by taking into account their construction characteristics and operational performance. The hydrogeographical characteristics for a wide range of sites have been appropriately analyzed and a model that involves significant physical parameters has been developed. The design problem was formulated as a mathematical programming problem, and solved using appropriate programming techniques. The optimization covered a wide range of site characteristics and three types of commercially available hydroturbines. The methodology introduced an empirical short-cut design equation for the determination of the optimum nominal flowrate of the hydroturbines and the estimation of the expected unit cost of electricity produced, as well as of the potential amount of annually recovered energy.