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This paper deals with the application of permanent shunt capacitors to primary distribution feeders. Two distinct optimization techniques have been developed for selection of capacitor size and location depending on the location of the additional loads that can be served with the capacitors present. The objective cost function minimized includes revenues due to energy loss reduction in the feeder and released kVA at the substation. The minimization is subject to voltage drop constraints. These techniques have been applied to a typical rural distribution zone in Egypt and the results are briefly summarized.