Written by Godfrey Marawanyoka and Brian Latham | From Bloomberg News

Zambia and Zimbabwe signed an agreement to carry out urgent repairs on the 50-year-old Kariba dam, which supplies half the electricity used in the neighboring nations, Zambian Finance Minister Alexander Chikwanda said.

The agreement to spend $294 million for rehabilitation of the dam’s plunge pool and six spillway gates is cheaper than having to build a new plant at an estimated value of $5 billion, Chikwanda said on Friday at the site of the dam, which spans the Zambezi river between the two countries.

Failure to conduct the work on the plant, which generates more than 1,600 megawatts of power, would “result in consequences that are too ghastly to contemplate in economic and humanitarian terms,” Chikwanda said,

The World Bank will provide $75 million for the project, which is meant to bring up the dam to international standards, according to a statement by the Washington-based lender in December. The African Development Bank, European Union, government of Sweden and the Zambezi River Authority have also committed financing, it said.

Reshaping the plunge pool will take three years to complete, while the rehabilitation of the gates will be done over six years, Charity Mwansa, chairwoman of the jointly-owned ZRA which manages the dam, said at the same event.

Zambian Finance Ministry Permanent Secretary Felix Nkulukusa was cited by the Newsday newspaper in March as saying the dam was in danger of collapsing if no repairs were made in the next three years, putting as many as 3.5 million people at risk, including in Malawi and Mozambique. The ZRA later said there was no danger of a collapse.