The role of Independent System Operator (ISO) in the restructured power industry includes system control, capacity planning, transmission tariff and congestion management; the challenging task being minimizing the congestion. One of the popular techniques used to alleviate congestion is using Flexible AC Transmission Systems (FACTS) devices. The power system generally operates near its rated capacity in deregulated market because of intensive usage of transmission grids. So, the major issues that need to be addressed are improving the voltage profile and reducing the power loss in the electrical network. Motivation: The location of FACTS devices can improve the power flow in the line, maintain the bus profile and reduce the losses. However locating the ideal location is a NP problem. This study presents a novel heuristic method to determine the types of FACTS devices and its optimal location in a power system without violating the thermal and voltage limits. Power flow sensitivity index to find the optimal location of UPFC is suggested in this study. A hybrid fish bee swarm optimization is proposed which is based on Artificial Bee Colony (ABC) and Fish School Search (FSS) methods. This proposed algorithm is tested based on IEEE 30 bus system and line performances are studied.