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In this paper, an efficient expansion planning method for distribution networks based on reactive tabu search is proposed. This method consists of two-step procedures to determine the location of SVR and SVC to be installed. In the first procedure, the allocation of SVR is determined and the optimal tap positions of SVRs are selected by a static optimization. In the second procedure, output changes of distributed generators are considered and the allocation of SVC is determined and optimal tap positions of SVRs are determined against voltage deviations caused by connections of distributed generators by a dynamic optimization. This proposed method can take the installation cost of both SVR and SVC into account as an economic criterion, and is able to incorporate the upper and lower limit of voltage at each node and also the upper limit of line currents as constraints.