The agreement with JPM Capital will see the parties invest up to $75m in a $175m solar energy development fund.
TerraForm will use the money to acquire about 60MW of solar power projects that are being developed and built by SunEdison.
SunEdison said the funding allows it to continue to provide advantageous pricing and financing to its customers.
SunEdison vice-president of project finance for North America Ryan Bennett said: "Putting together a fund with an investment commitment from JPM Capital, one of the world’s leading tax equity investors in renewable energy projects, is an important milestone not only for our company, but for the solar industry as a whole.
"This is one of the largest funds of its kind in 2014, and it puts SunEdison and Terraform Power in an ideal position to rapidly grow and expand the solar energy market, all while offering excellent pricing and financing to our customers."
TerraForm Power president and chief executive officer Carlos Domenech said: "This fund enables TerraForm Power to make substantial acquisitions that strengthen our position as a leader in the highly fragmented solar energy market."
TerraForm Power has recently acquired 77.6 MW of solar power plants from the Capital Dynamics U.S. Solar Energy Fund.
In November 2014, SunEdison and TerraForm Power have agreed to acquire the US-based renewable energy firm First Wind for about $2.4bn.
Image: TerraForm will use the money to acquire about 60MW of solar power projects that are being developed and built by SunEdison. Photo: Courtesy of worradmu/FreeDigitalPhotos.net.
