Rising energy costs, increased transmission distances and use of large generating machines are resulting in increased demands for reliable and more economic operation of transmission and distribution systems. However, even in the most efficient power transmission and distribution system, some transmission losses are inevitable. To overcome losses in weak system where minor losses are considerable reactive power compensation is a well established technology. By reducing the negative impact of reactive power in high voltage AC networks, the capacity of transmission systems can be dramatically increased. For this VSI-SVC (Voltage Source Inverter Static Reactive Power Compensator) is the best solution. This paper deals in design of control system for a VSI-SVC by considering the requirements of the AC system and the requirements of the SVC itself. These are combined to produce a schematic block diagram describing the control system of the SVC connected to a simple power system [I].