The Electricity generated at the generation station is transferred to the distribution system via an electrical power transmission system. When the power transmission system utilizes heavily loaded lines, there are increasing voltage deviations and power losses, which can cause malfunction or even collapse of the transmission system. Based on the study of the existing Bahir Dar to Debre Markos 400 kV transmission line, using data from the Bahir Dar Substation of the Ethiopian Electric Power System, it was determined that the system experiences a power loss of 1.3673 MW and a voltage profile of 0.9522 per unit. This indicates a low voltage profile, as the acceptable range for per unit voltage profiles is generally between 0.95 and 1.05. To mitigate these problems, the study focuses on the use of a Static Synchronous Compensator (STATCOM) to minimize power loss and improve the voltage profile in Bahir Dar to Debre Markos 400 kV transmission line. In this thesis, the design and simulation of the transmission system in MATLAB/Simulink were involved to demonstrate the significance of using a compensating STATCOM device for mitigation of the power loss and voltage profile improvement. Optimal placement of the STATCOM is done using Newton Raphson, based on the power flow analysis result. In the first section, a PI-controlled STATCOM was implemented. In the second section, the Artificial Neural Network(ANN) model was trained and used for the controller of the STATCOM device. From the results of the simulation, the receiving end voltage profile is improved by 5.02% at the peak load, and reactive power flow is improved by 11.43% when a PI-controlled STATCOM is used at the weakest bus of the system. Then, when the PI-controller is replaced with a trained ANN-controlled STATCOM, the receiving end voltage profile is improved by 5.92% and the reactive power flow is improved by 17.14%. Hence, the ANN-controlled STATCOM has better performance than PI-controlled STATCOM in terms of regulating reactive power flow and improving voltage profile. Keywords: ANN, STATCOM, Transmission Line Loss, Voltage Profile