By Mary Childs

WASHINGTON, June 27 (Reuters) - The World Bank said on Wednesday it will provide $201 million in credits and grants to improve road and rail links between West African neighbors Chad, Cameroon and Central African Republic.

"Those three countries have some of the least functional traffic connections of any area in the world," World Bank spokesman Tim Carrington told Reuters.

Cameroon's location on the Atlantic Ocean is vital for getting goods from landlocked Chad and Central African Republic to international markets, but poor infrastructure has frustrated efforts to increase trade and lower transport costs.

The World Bank project will target sections of road and stretches of rail between Chad's capital N'Djamena and Bangui in Central African Republic to the port of Douala in Cameroon.

In addition, it will finance improvements to accelerate border crossings and reduce other barriers along the Douala-N'Djamena and Douala-Bangui corridors. It will also provide technical assistance to speed up port clearance at Douala.

The World Bank estimated that for Chad and CAR, transit costs represent 52 percent and 33 percent, respectively, of the value of exports.

Road travel from Douala -- the main port and regional gateway -- currently takes about 15 days to N'Djamena and 10 days to Bangui. Delays in the port can add another 28 days, it said.

Carrington said 30 percent of the contributions for the project will come from the International Development Association, the World Bank's fund that lends to the world's poorest countries.

The package includes $147 million credit for Cameroon, $30 million grant for Chad, and $24 million grant to Central African Republic.

Other donors include the African Development Fund, European Union, and French development agency. Chad has also agreed to use some of its oil profits to fund part of the project.

"Challenges of implementing a major project like this are not small," Carrington said, "but I think everybody's going in with their eyes open," he added.

He said all three countries have long struggled to get their goods to market, and transportation improvements could have far-reaching effects in bolstering their economies.

"A significant part of that burden would be lightened if those connections became more functional and physically improved," said Carrington.

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