The use of capacitors bank in power systems has many well-known benefits that include improvement of the system voltage profile, increasing maximum power flow and to reduce the line losses. This thesis is devoted to determine the optimal location and size of capacitors in radial distribution system under Southern region of Ethiopian at Shakiso town using a genetic algorithm. The capacitor placement problem is a combinatorial optimization problem having an objective function composed of voltage support and annual capacitor installation cost, which is commonly solved by employing genetic algorithm (GA) to obtain solution. The proposed algorithm has been implemented by ETAPs software. The performance of the proposed method was investigated on Shakiso distribution system outgoing feeder Line-1consisting 15 buses and it was found that a significant bus voltage improvement by placing optimal capacitor in the radial distribution system. Results of the study show an improving of voltage profile at a bus terminal. For examples voltage at bus-1is corrected from 14.116kV to 14.961kV which is about 5.99% of the terminal voltage is improved.