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The new generation of FACTS controllers is based on Voltage Source Converter (VSC) using self-commutating devices like GTO and IGBTs. They require lower ratings of passive elements (inductors and capacitors) and their voltage source nature present several advantages over conventional controllers based variable impedances. The application of these controllers brings up new challenges, not only in hardware implementation, but also in design of controllers. On-going deregulation exercise in the electric power industry has inspired considerable research interest in the area of improvement of the power factor in power systems. The thesis reports an investigation on effects of linear model control scheme on improvement of the power factor in power systems, using a STATic synchronous COMpensator (STATCOM). The control scheme is simulated and all implementing peripherals are designed.