Smart power supply grids may be required to link future energy production and consumers. Multilevel converters are a building block for smart grids. There are several structures of multilevel converters, for example the Neutral Point Clamped (NPC), the Flying Capacitor Circuit and the Cascaded H-Bridge (CHB) converter. The modular structure of the CHB multilevel converter makes it one of the best options for smart grids. Using modular converter structures reduces production and maintenance costs. Implementation of efficient and fast controllers for multilevel converters requires accurate measurement of the voltages and currents for the system feedback loops. Knowledge of the DC link voltages is necessary to construct voltage control loops. In a typical CHB multilevel converter there are many DC links which means that a lot of voltage transducers maybe required. Voltage transducers at medium voltage are not easy to implement and add to system cost. This thesis presents an efficient way to observe the DC link voltages and hence eliminate the cost associated with voltage transducers. A “Sliding Mode Observer (SMO) using the Equivalent Control Method” has been chosen because of its robustness against system uncertainties. Simulation and practical work has been performed on a three-phase, three-cell multilevel converter to validate the use of this observer.