In Ethiopia the power demand has been increasing rapidly, power generation and transmission are being affected due to limited resources, environmental restrictions and other losses. Transient stability control plays a vital role in maintaining the steady state operation of power system in the event of voltage, current and frequency deviation from normal operation due to fault occurrence, the major transient stability problems are coming due to sudden change in loads and, severe short circuit happened in transmission line. Flexible AC Transmission Systems (FACTS) are the power electronic components used to overcome the transient instability problems. So this thesis presents modelling and analysis of IPFC based on proportional integral (PI) controllers using MATLAB/ Simulink to improve the transient stability in Tis Abay power generation system. The study system is simulated using MATLAB- Simulink under steady state condition, three phases to ground fault and line to line fault condition with and without the application of IPFC. The simulation result shows for all the parameters such as the load angle improvement 70%, excitation voltage 70%, rotor speed 64%, active power 79% and reactive power 80% is by using IPFC.