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The modelling of, and a nonlinear control strategy for, a three-phase voltage source shunt active power filter is presented. The dynamic model is at first elaborated in the system 'abc' and then transformed into the synchronous orthogonal 'dq' frame. The 'dq' frame model is divided into two separate loops, namely the two current dynamics inner loop and the DC voltage dynamics outer loop. The exact feedback linearisation theory is applied in the design of the controller. Then, the pole placement strategy is used to synthesise the closed loop error dynamics of current tracking and DC bus voltage regulation. The adopted control strategy allows the decoupling of the currents and improves their tracking behaviour and enhances DC voltage regulation. Simulation results validate the expected active filter performance in both steady state and transient operation, and also show that the controller is capable of compensation under severe load current imbalances.