Flexible AC Transmission Systems (FACTS) technology opens up new opportunities for controlling power and enhancing the usable capacity of the present as well as new and upgraded lines. D-STATCOM is a FACTS device which can independently control the flow of reactive power in the distribution system. Most of the loads in this system, being inductive in nature consume more reactive power. As a result, the power factor of load deteriorates and this limits the active power flow in the line. So, developing a D-STATCOM, based on voltage source converter, which injects the reactive power in the distribution line. The output voltage of D-STATCOM is made leading to that of system voltage for the purpose of controlling VAR generation