The document presents an algorithm for optimal placement of capacitors in radial distribution systems to enhance voltage stability. It uses voltage stability index (VSI) calculations to determine candidate nodes for capacitor placement. The algorithm iteratively selects the node with the lowest VSI value, calculates the required reactive power compensation, and checks that value against limits. It continues placing capacitors until all VSI values exceed a threshold. The method was tested on several standard test systems and showed improvements to voltage stability and reductions in losses.