Central Huijin Investment Co Ltd, which was recently merged into sovereign fund China Investment Corp, has agreed to inject $20 billion into China Development Bank (CDB) as part of a restructuring plan for the State-owned policy bank.

Central Huijin and CDB signed the capital injection agreement today in Beijing following approval by the State Council, or China's cabinet, the central bank said in a statement posted on its website.

The capital injection will help raise CDB's capital adequacy ratio significantly and strengthen its financial muscle to ward off operational risks, the People's Bank of China said.

Huijin's investment will also help accelerate CDB's full commercialization, it said without elaborating.