The thesis deals with the assessment of the energy potential on the Paka River with construction of small hydro power plant, and it was created on the basis of historical plans from the year 1917, which predicted the construction of the small HPP at the selected location. Its purpose is to provide an assessment of the energy potential of the today's situation and to further assess the cost of investment. The first part describes the importance of hydropower in Slovenia and its historical development. In the second part we describe the existing situation, we analyze the hydrology and we passed the geodetic measurements. We have developed a hydraulic model in the program HEC RAS and determine the course of surface water for different characteristic flow profiles. Then we inserted threshold in the stream in order to increase the upper water level and thus the gross fall. Based on the flow curves for the upper and lower water obtained from the HEC RAS program, we calculated water balance and energy production for various installed power flow values. In the third part we have developed conceptual design and selected four ventricular regulating Banki turbine. Then we have made a rough assessment of the cost for the construction and maintenance, mechanical and hydromechanical equipment, on the basis of the existing plans. The calculation was performed for two cases of water inlet to the turbine; through the tunnel with the procedure of mikrotunelling and by building a channel along the stream. Then we have made sensitivity analysis. The aim of the project was to determine if the investment in the construction of small HPP is still justified.