UPDATE 1-KenGen plans 280 MW new geothermal capacity by 2013

* Power plant to cost $1.3 billion

* KenGen already producing over 200 MW from geothermal

(Adds details)

NAIROBI, Feb 9 (Reuters) - Kenya Electricity Generating Company (KenGen) (KEGN.NR) said on Tuesday it planned to add 280 megawatts of geothermal power at a cost of $1.3 billion shillings by 2013.

"The scope of the project includes four 70 MW power generating machines, steam-gathering systems, substations, transmission lines and other infrastructure," KenGen said in a statement.

The company, Kenya's biggest electricity generator, has contracted New Zealand's Sinclair Knight Merz as consultants for technical design, tender preparation and evaluation and supervision of construction contracts.

KenGen said it was also procuring two drilling rigs for the new power plant.

The company is already producing over 200 MW of electricity from geothermal sources in the Rift Valley.

Geothermal power comes from steam made from underground water heated by the Earth's core, which is in turn used to spin turbines.

Although cheap and renewable, the start-up cost for geothermal is expensive compared with other sources such as hydropower. ($1=77.15 Kenyan Shilling)