This paper evaluates the performance and effect of the static VAR compensator (SVC) on the system stability enhancement. In addition, the paper presents a proposed method to coordinate between SVC-based stabilizer and power system stabilizer (PSS) through an optimization process for the system stability problem that employs a variety of single or multi-objective functions. These objective functions are based on the nonlinear model of the system. Particle Swarm Optimization (PSO) technique is applied to search for the optimal SVC and PSS controller parameters. The proposed method leads to more flexibility to the system by involving all the controller parameters in the optimization process and using different objective functions. The system response is analyzed with utilizing the PSS only and compared with utilizing the SVC coordinated with the PSS. The simulation results confirm that coordination between the PSS and the SVC as well as adding more flexibility to the system improves the system response.