The company will acquire a total of 39 solar power plants, which are located in five US states including California, Massachusetts, New Jersey, New York and Pennsylvania.
TerraForm Power chief executive officer Carlos Domenech said: "These high quality assets are expected to provide TerraForm Power with an attractive levered cash-on-cash return of approximately 9% while adding further geographic and cash flow diversification."
"Today’s announcement underscores TerraForm Power’s ability to work with world-class partners in acquiring high quality portfolios. It also demonstrates TerraForm’s scalable capabilities in underwriting and managing large portfolios of power plants."
Following completion, the transaction will provide approximately $21m in unlevered cash available for distribution in the 12-month period.
Additionally, the acquisition will be funded through committed debt financing including an increase in TerraForm Power’s existing term loan facility by $275m.
Scheduled to close in fourth quarter of 2014, the transaction is subject to regulatory approvals and customary closing conditions.
TerraForm Power chief financial officer Alex Hernandez said: "This expanded facility, provided by our bank group, gives us a flexible capital source and additional liquidity to execute our growth strategy."
TerraForm Power, concurrent with the transaction, plans to increase the existing revolving credit facility size to $215m.
