Afghanistan hosts the Hindu Kush, an extension of the Himalaya mountains that act as water sources for five major rivers flowing through Afghanistan. Most of these rivers provide promise for the construction of water dams and installment of micro hydropower plants (MHP). Although civil war and political strife continue to threaten the country for more than four decades, the Afghan government introduced strategic plans for the development of the country. In 2016 Afghanistan introduced the Afghanistan National Peace and Development (ANPD) Framework at Brussels designed to support Afghanistan’s progress towards achieving the SDGs (Sustainable Development Goals). This study discussed the 7th Goal (ensuring access to affordable, reliable, and sustainable energy for all) and 8th Goal (promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all) alignment in Afghanistan. The Afghan government acknowledges its responsibility to provide electricity for all of its citizens, but this can only be achieved if the government can secure a reliable source of energy. Afghanistan’s mountainous terrain provides a challenge to build a central energy distribution system. Therefore this study looks for alternative solutions to the energy problems in Afghanistan and explores feasibility of micro-hydropower plant installations in remote areas. This study evaluated socio-economic impacts of micro-hydropower plants in the life of average residents. We focused on one example of a micro hydropower plant located in Parwan, conducted interviews with local residents, and gathered on-site data. The findings in this study can help policymakers to analyze the effects of development projects in the social and economic life of residents. It will encourage the government and hopefully the private sector to invest in decentralized energy options, while the country is facing an ever-growing energy demand.