The increased power system loading combined with the worldwide power industry deregulation requires more reliable and efficient control of the power flow and network stability. Flexible AC transmission systems (FACTS) devices give new opportunities for controlling power and enhancing the usable capacity of the existing transmission lines. This paper presents a combined application of the particle swarm optimization (PSO) and the continuation power flow (CPF) technique to determine the optimal placement of static var compensator (SVC) in order to achieve the static voltage stability margin. The PSO objective function to be maximized is the loading factor to modify the load powers. In this scope, two SVC constraints are considered: the reference voltage in the first case and the total reactance and SVC reactive power in the second case. To test the performance of the proposed method, several simulations were performed on IEEE 30-Bus test systems. The results obtained show the effectiveness of the proposed method to find the optimal placement of the static var compensator and the improvement of the voltage stability.