The Ethiopian Electric Power Corporation (EEPCO) is, currently, undertaking a huge electricrnpower generation expansion. The generation capacity under construction is about 7757 MW.rnThis huge expansion demands existing AC transmission line upgrading and new transmissionrnline installations. On the other hand, instability problems have occurred frequently withinrnEEPCo system manifesting themselves in the form of system blackouts.rnConsidering these two problems this thesis work proposes integration of Voltage SourcernConverter Based High Voltage Direct Current (VSC-HVDC) transmission system forrnimproving future system stability and enhancing power transfer capability.rnThe thesis investigates the dynamic performance improvements that can be attained throughrnintegrating VSC-HVDC transmission system. The investigation started by developing arnmonopolar VSC-HVDC transmission model with a complete control system on DigitalrnSimulation and Electrical Network calculation program (DIgSILENT power factory) software.rnDifferent controllers are designed including, faster inner current controllers having transientrnresponse specifications: rise time 0.0003 s, settling time 0.000842 s; DC voltage controllerrnhaving transient response specifications: rise time 0.00156 s, settling time 0.0132 s; and outerrnPQ controllers. Then the performance of the control system is evaluated and found to functionrnsatisfactorily at supporting bidirectional power flow and at maintaining stability duringrndisturbances. Finally the designed VSC-HVDC link is integrated to North-Western EEPCornhigh voltage grid model and time domain simulations are carried out to investigate systemrndynamic performance improvement. It is obtained that with the proposed option the systemrnpre-disturbance bus voltage values are improved from below 0.95 pu to 1 pu and postrndisturbance bus voltage values are improved from below 0.9 pu to above 0.95 pu. On the otherrnhand system low load higher voltage values that go beyond upper limit of 1.05 are managed torncome within the limit. A better damping of generators’ rotor angle oscillations is also attainedrnshowing general system dynamic performance improvement.rnKEY WORDS: Dynamic performance improvement, VSC-HVDC, Vector Control, North-rnWestern EEPCo, bus voltage profiles.