This research deals with the performance assessment and upgrading of Walga micro hydrornpower plant owned by government and fitted with cross flow turbine. Walga site is located inrnOromia Regional State, South West Shoa zone, Wonchi Woreda Azer_Keransa Kebele. Walgarnsite is located in a remote area. Currently, even though the village has the opportunity to getrnpower from micro hydro power plant that was installed in 2014 by the Ministry of Water,rnIrrigation and Electricity, still the plant lacks reliability, sustainability and safety problems. Thernkey reasons for the performance assessment and up grading of the existing Walga micro hydrornpower station were to know the efficiencies (turbine and unit efficiencies) and to determine thernelectrical power output of the plant. And also to know the power demand gap between supplyrnside from the existing micro hydro power generator and demand side obtained from the villagernpower demand assessment during the field survey. Therefore, performance assessment andrntesting, power need assessment of the community, determination of the power gap between thernsupply side from the existing Walga micro hydro power station and demand side were thernpurpose of this thesis work.rnIn this study, performance assessment of existing Walga micro hydro power station was carriedrnout and performance indicators were identified. Based on the performance test results and thernvillage power demand assessment findings, the power demand gap of Walga village was known.,rnTwo options were proposed to meet the power demand gap of the village. The first option isrndeveloping a PV/micro hydro hybrid power supply system and the second option is developingrnmicro hydro resource existing at the site.rnSystem designing and modeling by using Hybrid Optimization Model for Electric Renewablernsoftware for the two options were done and the simulation results were presented. Based on thernHybrid Optimization Model for Electric Renewable software simulation results, the performancernand economic evaluations of each system were presented. Option I is characterized by as initialrncost 8,719,300 Birr ($379,100), operating cost 276,690 Birr ($12,030), total NPC 12,618,812rnBirr ($548,644) and cost of energy 8.70/kWh Birr (0.378$/KWh). The second option (Option II)rnis characterized by initial cost 1,357,000 Birr ($59,000), operating cost 54,510 Birr ($2,370),rntotal NPC2,125,269 Birr ($92,403) and cost of energy1.47Birr/kWh (0.064$/KWh).rnFinally, the performance evaluations and economic evaluations made for the option I and optionrnII. From the evaluation results, option II was selected as better option to fill the power demandrngap of Walga village.rnKey Words: Assessment, Micro-hydro, Hybrid System, HOMER