This paper presents an exact mixed-integer nonlinear programming (MINLP) model for optimal sizing and location of capacitor banks in radial distribution networks (RDN). The total operating costs of the RDN are minimized taking into account the classical restrictions of the electrical system, which are modeled by using a power flow formulation. Only fixed capacitor banks are considered in this paper. A commercial optimization package known as general algebraic modeling system (GAMS) is employed to implement the MINLP, ant its solution is obtained by CONOPT package. The effectiveness and robustness of the proposed mathematical model is tested in two RDNs with 10 and 33 nodes respectively. Additionally, three different demand scenarios are considered for simulation analysis.