Electrical energy plays a vital role for the socio-economic development of a nation. To combat for the power system profile problems, a distribution station established considering future expansion due to urbanization, impact of distributed generation to satisfy the energy demand of the area and energy management system for energy conservation and efficient utilization is required. In this regard, distributions networks might need expansion to meet the growing load demand by rehabilitating the existing network or by establishing new distribution network considering the criterion of reliable power supplying, penetration limit of distributed generation, developing energy manager to facilitate energy conservation and efficient utilization. Thus, in this thesis the Debre Markos distribution network expansion planning considering future demand growth and distributed generation penetration limit is carried out using a metaheuristic optimization technique. To evaluate the capability of the existing Debre Markos distribution network and capability to supply reliable power considering future expansion, load demand forecast for the years 2016/172021/22-2026/27 is done using least square method. The performance evaluation of the exsting and the expanded netwrok considering the exsting and forcasted load demand for the years 2021/22 and 2026/27 is done using forward-backward sweep power flow method. Acordingly, the results revealed that the exsting netwroks cannot meet the existing load demand of the town with major problems of inreased voltage deviation and power loss. To make the distribution network reliable, the expansion planning is carried out using PSO as a major task of the thesis. Accordingly, the optimization tasks considered minimizing voltage deviation and power losses of the distribution network on the feeders: F3A, F3B and F4. The optimization results on the selected feeders of percentage reduction in voltage deviation and power losses respectively are recorded as 80.33% and 92.82%, 88.24% and 87.95%, and 81.89% and 85.75% for feeder F3A, F3B and F4 respectively.