The power plant is designed to generate 242 gigawatt hours (GWh) of electricity annually required to power 117,000 homes while reducing CO2 emissions of more than 125,000 tons.
The company expects the Quilapilun facility, upon completion, to be largest solar project in Latin America and its first solar project in Santiago.
Power generated from the facility will be sold to the regulated market under long-term power purchase agreements with local electricity suppliers.
Sistema Interconectado Central (SIC) will purchase the power generated from the facility as part of the 570GWh contract awarded in 2014 to SunEdison by the Chilean National Energy Commission.
SunEdison Latin America vice president Carlos Barrera said: "With solar, we are able to supply regulated market consumers with clean energy at lower prices than they pay now."
SunEdison Services will be responsible for operation and maintenance of the power plant upon commissioning scheduled in early 2016.
TerraForm Power CEO Carlos Domenech said: "Today’s announcement underscores the important role our call rights with SunEdison play on TerraForm Power’s growth strategy.
"This solar project more than doubles our footprint in the fast-growing Chilean solar market and provides significant value to our shareholders."
