The placement of FACTS devices in a power network is of great importance to ensure the utilization of the full potential of the transmission network. In this study firstly, a static VAr compensators (SVCs) are placed optimally in a power network by taking into consideration the generation costs of both active and reactive power and the cost of the SVCs. The optimal power flow (OPF) and the low discrepancy sequences (LDS) based optimization procedure are employed to solve the problem of optimal allocation of SVCs. Secondly, a small disturbance stability study is performed in order to investigate how installing the SVCs with additional control loops at such locations could contribute to system small disturbance stability. The study demonstrated that the optimal allocation of SVCs is a cost effective measure since the installed SVCs reduce overall generation costs and additionally contribute to the enhancement of the security of the transmission network by improving the damping of electromechanical oscillations