The announcement comes days after the company announced the Rs 60,000-million (US$990-million) deal to buy Lanco Infratech's plant in Karnataka.
According to sources, the 2,500 MW thermal power plant in Odisha will use "coal reject", or residues after washing the fuel, from its two mines in the state of Odisha.
This plant will be funded through a debt equity ratio of 70:30.
However, the proposal to set up the plant is in a very early stage. The plant would be built when the two mines start production, which will take another couple of years.
The rejected coal cannot be transported beyond 500 kilometres from the mines and has to be consumed before.
Currently Adani Group is implementing coal mining projects with total annual coal production capacity of around 110 million tonnes per year.
Adani Group has a plan to have a power generation capacity of 20,000 MW by 2020.