In electrical power systems there are many problems, from these problems voltage drop, over voltage and instability. These problems are solved by using FACTS technology. Flexible AC transmission system (FACTS) can provides better control than conventional control and achieves fast control time response; therefore FACTS controllers play an important role in power system stability enhancement. STATCOM
is a shunt FACTS device which is used for voltage controlling and increasing the performance of the system. In this paper STATCOM is used to improve voltage magnitude and stability of electrical network by using MATLAB/SIMULINK. To show its effectiveness a prototype of electrical network has been chosen which consists of five buses, three generators and four loads. Simulation results show a robust improvement in network with STATCOM. If a three phase to ground fault occurs
between buses (3&4) there are oscillations after clearing fault. To reduce these oscillations power oscillations damping (POD) has been proposed with STATCOM. Simulation results show that an enhancement of the network prototype with proposed controller (STATCOM- POD).