The World Bank grant is meant to support the diversification and climate resilience of tourism in Gambia, a country of around 2.1 million inhabitants surrounded by Senegal.
The grant also promotes sustainable tourism, develops different holiday experiences and helps protect Gambia's Atlantic coastline from the impacts of climate change.
The sector, like industries across Africa, has been hard-hit by the pandemic and economic fallouts of the war in Ukraine, World Bank managing director of operations Axel Van Trotsenburg said at the signing ceremony in Gambia's capital Banjul.
Tourism accounts for roughly 20% of Gambia's gross domestic product and is the largest foreign exchange earner, according to the government.
The pandemic caused Gambia's economic growth to contract by 0.2% in 2020, according to the World Bank. The economy has since started to recover, reaching 5.6% growth in 2021, largely driven by the return of beach resort-goers and remittances.