T H E I N T E R-WA R Y E A R S

Poland and the largest textile centre in Europe, had been supplied with power before the war by the 1886 Company for Electric Lighting, a company operating under Russian law, but managed by German and Swiss firms. After the war, the Łódź power station was commandeered by the Polish government, in the belief that most of the stock of the 1886 Company , as it was generally known, was in German hands. In 1922, Société Générale de Belgique and Traction et Électricité reached an agreement with two French compa- nies, Société Lyonnaise des Eaux et de l Éclairage and Compagnie Française des procédés Thomson-Houston, to approach the Reparations Commission with a view to acquiring the German holdings in the 1886 Company. Pursuant to the terms of the Treaty of Versailles, all German shareholdings in companies operating outside Germany had been ceded to the Reparations Commission, which then sold them off to companies from Allied countries. The Commission duly accepted the Société Générale de Belgique group s offer and released the assets. On 23 October 1925, Traction et Électricité and the companies working with them set up the Łódź Electricity Company, Lotesa for short. All the assets of the former power company were transferred to the new company established under Polish law. Lotesa was given a 40-year concession for the production and distribution of electricity in Łódź, in return for which the city obtained a 20% stake in the company.

Lotesa achieved substantial growth: between 1925 and 1938, installed capacity at the power station increased from 29MW to 100 MW, the number of customers from 26,000 to 131,000, output from 41,000 to 174,000 MWh and the length of the distribution network from 292 to 1,860 kilometres.

Meanwhile holding company Electrobel, founded in 1895 by Paribas and Banque de Bruxelles, had in 1904 set up a sub-holding company for operations in the Tsarist Empire called Tramways et Électricité en Russie. Prior to 1914 this company acquired or set up three businesses in Russian-held Poland: the Radom Electric Company, the Częstochowa Electric Plant, and the Bialystok Electric Company. However, the 1919-1920 war between Russia and Poland altered the situation. In 1923, Electrobel created a new subsidiary, Société d Entreprises Électriques en Pologne, alias Electropol, as a vehicle for developing business in Poland. This company, established under Belgian law, bought from Tramways et Électricité en Russie the three electricity companies it owned in Poland so as to encourage better relations between the Belgian power producers and the Polish authorities.

After 1923, Electropol gradually expanded its activities in Poland. In 1926 it bought addi- tional electricity businesses and set up four separate companies to run them the Kielce Electric Plant; the Piotrków Electric Plant which held the power supply concession in Piotrków and Tomaszów ; Company for the Electrification of the Częstochowa-Piotrków Region; and the Electric Company of the Częstochowa Region.

When Electrobel s capital was restructured in 1929, both Société Générale de Belgique and Belgian investment holding company Sofina were invited to take stakes. At that time, Electrobel owned 36,000 of the 160,000 shares issued by Electropol, which continued to grow. In 1938, its seven subsidiaries served a population of around 570,000 residents.

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