Over the past three decades, the electricity demand has risen dramatically. Therefore, transmission lines operated at maximum capacity near thermal limitations to meet the load requirements. Consequently, electrical utilities are more focused in controlling and regulating the power flow via the main transmission lines. Flexible Alternating Current Transmission System (FACTS) equipment can be used to expand transmission capacity, improve dynamic behavior and stability, and limit power quality issues. Oman electricity demand increases as well as global demand, which leads to operate the transmission lines near thermal limitations. Therefore, the operating voltages of transmission lines should be maintained within grid code limits which require both active and reactive power flow control. A static VAR compensator (SVC) is one of the FACTS devices used to improve voltage profile. This thesis studies the Oman Main Interconnected System (MIS) with main focus on the Muscat governorate and demonstrates the effect of SVC devices on the voltage profile of the system. This study aims to find optimal locations and sizes of SVC by using Particle Swarm Optimization (PSO) which will improve the voltage profile at the area using MATLAB software. Simulation results show that the voltage profile improved, and total system losses decreased. In addition, this thesis investigates the dynamic behavior of SVC on the MIS using DigSILENT software. Therefore, load flow, voltage profile, harmonics and stability were investigated. The simulation results show that integrating SVC in the MIS improves the voltage profile and decreases losses. Also, system stability improved since the system response due to connecting SVC become faster. However, due to nonlinearity of SVC harmonics increased but still they are within limits of the grid. Also, the loading of the system increased when SVC was connected to the system as per reactive power to voltage (QV) curve simulation. Therefore, SVC can be one of the solutions that improves voltage profile and enhances system loading and stability.