This work presents and develops an improvement of boiler performance essentials by identifying the avoidable heat loses, and targeting to the problem areas. Higher institutions are large consumers of energy at high annual cost. From the principle, energy save is energy produce, it is believed whenever a wasted heat is observed at a given plant, it is wise to install a means of a waste heat exchangers. From the terms of reference, applied in this work - the Bahirdar Institute of Technology and Textile factory, the major energy loss areas, has been found to be the steam generating boilers. This thesis identified, particularly, the energy losses of the existing student mess boiler system by conducting visual inspection; interview and testing the boiler feed water quality using available measuring instruments. The Salient findings of the study have been depicted; the boiler systems work improperly because of: untreated feed water, absence of monitoring and schedule maintenance program, lack of trained boiler operator and high purging steam to the atmosphere at the end of each operation. The boilers in all institutions never achieve their design objective due to improper execution or poor workmanship. Using the boilers efficiently is a necessity to keep the institution be competitive, clean, and at their peak of productivity. Throughout this project various attempts have been made to improve the boiler essentials, and proposed significant energy saving measures. Proper cleaning and regular maintenance is needed to reduce fouling and avoid corrosion. Lesser the fouling, the main cause for lower heat transfer, is the lesser will be the wastage of energy and the highest will be the efficiency. More attention has been paid towards the purging steam, thus a direct contact concentric tube heat exchanger has been manufactured and tested. It has been proved an amount of 135 497MJ of energy is saved per annum from purging steam to the atmosphere for nothing, which can be used different low temperature applications (such as laboratory, office, work shop, cafeteria ). For more yield and compactness of volume per unit area, a computer aided thermal design of shell and tube heat exchanger, using a C++ program has been developed to tap the wasted heat from the boiler. Application of this program can help to predict a new heat exchanger of the same nature in all institutions throughout the country.