|Small hydro power Dams, like any other major infrastructures, have economic, environmental and social impacts on the community. The MSHPP was expected to come with a number of social, economic and environmental costs to the surrounding communities. Therefore, there was need to provide evidence whether the project was having any significant effect on the social economy and environment of the communities. The study focused on the determination of social- economic and environment impacts of the construction phase of Mpanga Small Hydro Power project and the evaluation of the impacts caused by the MSHPP construction activities onto household livelihoods. Key person interviews, individual interviews, EIA/ SIA reviews were the methods of data collection used. Data was collected and entered in Epidata and analyzed in SPSS. Results revealed that the project led to increase in jobs by 81%, and 84% of the respondents agreed that there was improved road network in the area. Also people agreed with Increasing income and value of land. However the construction phase of the project came with negative impacts and most notably included reduction access to recreation areas, changing cultural lifestyles and 58% of the people agreed with reduced access to water ways for cattle & goat keeping and fire wood collection due to obstruction of animal migration path by headrace canal. Environmentally 60% agreed that the dam led to the loss of the aesthetic beauty in the area, Increasing vehicular smoke emissions and fugitive dust by 95% and 70% said yes to noise and destruction of aesthetic beauty in particular the endemic Cycad. In review of the projects SEIA it was also anticipated that the construction phase of the project was to create adverse impacts on the day today activities of the people due to the influx of many outsiders in the area. The findings from the study agreed with these predications. In conclusion, the project has resulted into improvement of the livelihoods of the surrounding communities. The key areas noted were improvement of the road network and employment opportunities, but negatively it also impacted on the health of the communities, vegetation loss and reduced access to the river waters. It is recommended that awareness on health and environmental issues among the communities be created, a study on cost benefits of the project needs to be undertaken, and that the project should implement the EMP as stipulated in the SEIA.