ZESCO sues Savenda Insurance over K1.3 million performance bond dispute

ZESCO Limited has dragged Savenda General Insurance Limited to the Lusaka High Court, demanding K1.3 million over its alleged failure to honour a performance bond after a contractor defaulted on delivering essential electrical equipment.

In a statement of claim filed before the court, ZESCO said it floated a tender for the supply and delivery of cable fault locators and a power transformer test system, which required bidders to submit bid securities from financial institutions or insurance companies.

The contract, referenced ZECO/033/1/2022, was awarded to Tronex Contractors and Suppliers Limited on August 26, 2024.

Savenda issued a performance guarantee—No. SG/02/23/08002-000392—on October 14, 2024, undertaking to pay ZESCO up to K1,387,360 if the contractor failed to meet its obligations.

The bond was set to expire on March 31, 2025, and stipulated that any payment demand from ZESCO must be made on or before that date.

It also stated that Savenda would be required to pay upon ZESCO’s first written demand without proof or justification of the breach.

ZESCO said the contract expired on November 26, 2024, with Tronex having delivered only 50 percent of the contracted goods—far short of the agreed 100 percent.

On March 20, 2025, ZESCO submitted a formal written demand to Savenda for the full bond amount, requesting payment within seven days. However, the insurer allegedly failed to respond or make the payment by the March 27 deadline.

ZESCO contends that Savenda’s refusal to honour the demand was unjustified, adding that the contractor’s alleged intention to deliver the outstanding goods after the contract’s expiration was irrelevant—especially since the goods remain undelivered.

The power utility claims to have suffered loss and inconvenience and is now seeking full payment of K1,387,360 under the bond, plus interest and legal costs.

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