This paper proposes application of STATCOM to extend steady-state voltage stability margin in electric power systems. A systematic analytical methodology based on the concept of modal analysis of modified load flow is used to determine the most effective locations for placement of STATCOM. In addition it is considered an optimal power flow based on Quadratic Programming to illustrate influence of STATCOM with OPF to improve voltage stability. A computer program has been developed and applied to the 14-bus to demonstrarte the effect of STATCOM and OPF on voltage stability. Results reveal that the incorporation both of STATCOM and OPF improved static voltage stability and loadability of the system