[1] On 16 May 1889, the Ministry of Public Works in Bogotá let a contract with a Colombian company to build what would have been the first street railway in Panama City.

The contract was then bought out by foreign investors, who formed the United Electric Tramways Company in London on 22 October 1892.

[1] On 1 October 1893, the service was inaugurated on a Panama City line that was built with English financing and Siemens electrical technology along Avenida Central.

Service along that first Panama City tramway line ended during the Thousand Days' War, which lasted from 1899 to 1902.

While canal construction was underway, on 29 October 1906 the new Panamanian government let a contract for a new tramway in Panama City.

In 1916 an author noted that Panama City: ...has two light and power plants, a gas plant and an excellent tramway service which communicates with the towns of Ancon and Balboa on the Canal Zone, as well as with the suburban district of the Sabanas; one of the street car branches runs to the Balboa docks at the terminus of the Canal where the great steamers arrive.

[1] A level junction intersection of the two track 3 ft 6 in (1,067 mm) tram line with the two track 5 ft (1,524 mm) Panama Rail Road line was constructed along Avenida Central in 1920 to avoid the need for the trams to follow a longer route around the mainline railroad that had previously gone along Avenida Norte and Calle 23 Este.