Sri Lanka has a number of small waterfalls and channels. Related to this there is a significant potential to develop small hydropower plants, thus to generate much needed electricity for country’s development efforts. Small hydro power plants cause less environmental effects compared to large scale hydro power generation and power generation using fossil fuel. Therefore, it is a timely requirement to explore the possibilities of utilizing small water streams to generate electricity as much as possible as well as to optimize the energy generation with the available    water in those water streams.   The importance of small hydro power is highlighted in the   Sri Lanka’s energy generation plan, and  the Ceylon Electricity Board (CEB) annual report states that in year 2011 total installed capacity of small hydro plant was around 200MW and it is expected to expand energy generation to around 800GWh. This study focuses on finding out optimum operating parameters to maximize the energy generation of existing small hydro power plant in the country. By selecting a few small hydro power plants, preliminary studies were performed to identify optimum values of water flow rate to maximize the efficiency of the power generation. The study revealed that the selected plants had not operated at the maximum efficiency; hence they did not optimally utilize the available water.