In this paper, the authors present three phase voltage source inverter based STATCOM using hysteresis current controller for mitigating voltage sag due to sudden increase in load. A STATCOM injects a current to the system such that it negates the effect of non-linear current waveform generated by load. Three phases voltage source inverter based on MOSFET is designed and firing pulses to the device is given by hysteresis current controller, which produces proper switching frequency to the inverter to manipulate the voltage sag during change in load.