<p>Small hydropower plants (SHPs) are promoted to advance development by providing affordable, decentralized energy—particularly in rural and remote areas. With low capital and maintenance costs, long lifespans, and adaptability to local conditions, SHPs are increasingly favored in energy policies worldwide. However, their environmental impacts are often underestimated. SHPs can fragment aquatic habitats, disrupt species mobility, reduce genetic diversity, and increase the risk of local extinctions. These ecological and evolutionary consequences are rarely addressed in policy or project design, especially when cumulative effects of multiple SHPs are overlooked. Many national policies now promote SHPs through simplified regulations and private sector incentives, but often without adequate ecological safeguards. This paper emphasizes the need for a nexus approach—linking energy production, environmental health, and societal well-being—to guide SHP development. A nexus framework enables a more integrated evaluation of trade-offs and synergies between energy goals and ecosystem protection. While SHPs offer clear energy benefits, sustainability requires balancing development with ecological integrity. Embedding SHPs in a nexus-oriented planning model is vital to avoid biodiversity loss and support long-term socio-environmental resilience.</p>