With the increasing integration of renewable energy sources and the growing demand forpower quality improvement in modern power systems, the application of Static Synchronous Compensators (STATCOMs) has gained significant attention.  This master's thesis investigates the application of Multi-Level Inverter Voltage Source Converters (VSCs) in Static Synchronous Compensators (STATCOMs) for voltage stability improvement and reactive power compensation in power systems. The study focuses on the IEEE 14-Bus power system model, utilizing MATLAB/Simulink for the design, simulation, and analysis of the proposed Multi-Level Inverter-based STATCOM The primary objectives include assessing the advantages of Multi-Level Inverters in STATCOM applications within the complex topology of the IEEE 14-Bus system. The research aims to enhance voltage regulation, mitigate voltage sags and swells, and compensate reactive power under varying operating conditions and different type of unsymmetrical faults (line-ground, line-line, double line-ground fault).  The research outcomes contribute to the understanding of the practical implementation aspects and challenges associated with deploying Multi-Level Inverter-based STATCOMs in realistic power systems. The findings serve as a reference for power system engineers and researchers aiming to enhance the reliability and efficiency of large-scale power networks through the integration of advanced voltage control technologies.