The aim of this paper is to design a power electronics converter interfacing Utility Grid and AC Microgrid to reduce frequency variation in a grid during frequent load variation in another grid. The utility grid is interfaced with the AC Microgrid using an interfacing converter. Interfacing Converter protects microgrid from utility grid and vice versa during frequent variation of load. It allows bidirectional power flow. It provides essential frequency, voltage isolation and improves power quality. A proper, accurate real and reactive power sharing is attained by adjusting two independent quantities: frequency and magnitude of voltage.