The Autonomous Community of Andalusia in Spain has awarded a €16.4m contract to French firm Alstom and Spanish firm Inabensa to electrify Granada's tramway system.
The tramway system spans 15.9km, covers 26 stations and caters to nearly 140,000 passengers.
The electrified system is expected to carry nearly 12 million passengers in its first year of service.
Alstom's share in the contract is €9.8m and covers installing 35km of catenary and seven traction substations.
Work is expected to finish by July 2011.