Voltage stability is a major concern while planning and operating an electrical powerrnsystem. As electrical power demand increases, power system networks should be used inrnmaximum of their capacity to meet the demand growth. In such case Flexible ACrnTransmission System (FACTS) can be used so that maximum capacity of systemrnequipments utilized keeping the thermal limit and maintaining system voltage stability.rnStatic Var Compensators (SVCs) can endlessly provide or consume the reactive powerrnwhich is necessary to control the dynamic voltage oscillation helping to get stablerntransmission system and also help to achieve maximum power transfer. rnPower transmission can always be improved by upgrading or adding new transmissionrnlines. But sometimes due to financial constraints and lack of corridors for newrntransmission lines (environmental reasons), this may not be practical solution. SVC isrnfeasible alternative for optimizing the existing transmission system so that maximumrnpossible power will be transferred in the range of thermal limit and without affectingrnsystem stability. rn Great Ethiopian Renaissance Dam (GERD) which is now under construction is going torngenerate around 6450 MW. This energy is far more than the current total generationrncapacity of the country. HOLETA 500 /400kV substation will be the gate way for thisrnpower to the grid. There are four 500 kV transmission lines coming from GERD tornHOLETA 500/400 kV substation. SVCs are installed at HOLETA 500/400 kV substationrnto enable in evacuating the power generated at GERD power plant. rnThis thesis focuses to investigate the impact of the SVCs in HOLETA 500 /400kVrnsubstation on voltage stability and power transfer improvement. Three SVCs of totalrncapacity 900 MVAr are used at HOLETA 500/400 kV substation. They are connected tornthe AC 400 kV system using 400/33 kV coupling transformers. The study also evaluatedrnpossible installation of SVCs at DEESA or GERD substation and observes the effect onrnthe voltage stability and transferred power. In this study, the system is simulated using rnMATLAB 2017a /simulink environment. rnrnIt is observed that the best location of the SVCs is HOLETA 500/400kV substation as thernpower transferred and voltage stability is better than if it is in DEDESA or GERD. Usingrnthe SVCs in the network, didnâ€™t improve transfer of power. But the voltage at GERD busrnbar becomes 509.3 kV from 568.6 kV. The voltage at HOLETA 400 kV bus bar becomesrn338.4 kV from 362.8kV. The SVCs improve the voltage stability margin in the 500 kVrnnetwork at GERD bus bar. The simulation also depicts that while the SVCs are used,rnreactive power of the system increases and system voltage reduces. The PV and QV curve Study shows that SVCs improve over voltage problem. During 50% loading in thernabsence of SVCs, the voltage at HOLETA 400 kV bus bar is 418.5 kV. But when thernSVCs are present it is 396.3 kV which is very good for the system. Since the system isrnfacing both over voltage and under voltage problem, the SVCs are helpful in controllingrnthe over voltage problem. rnWhen The SVCs are used with Reactors on the line, the voltage is reduced to 314.1kVrnfrom 338.4kV.The system is having 620 km of 500 kV transmission line length andrnheavy loading, 2591 MW at HOLETA 400 kV bus bar leading to under voltage. ButrnGERD bus bar has no any load and very far away from the load center leading to overrnvoltage. So for better voltage stability and power transfer improvement, series capacitiverncompensator should be inserted in the GERD-DEDESA-HOLETA 500/400 kV networkrnas they reduce inductive reactance and boost receiving end voltage. In long term,rnadditional FACTS device should be considered for better stability and transfer of power.