The dependability and security of power system is significantly affected by voltage instability. FACTS (Flexible AC Transmission Systems) devices are employed in the system to enhance the voltage stability margin. In this regard, Static VAR Compensator (SVC) is an efficient FACTS device to control the reactive power flow through the transmission lines and maintains the voltage of system within limits. However, SVC should be placed at optimal location to enhance the reliability, performance of any power system. Towards this goal in this work, an index referred to as Voltage Sensitivity Index (VSI) is employed to determine optimal location for installation of SVC. The effectiveness of the suggested index is investigated on IEEE-30 bus test system. Results show that placing SVC at the location obtained from VSI significantly enhances voltage profile of the system.