With increase in the level of living standard of human beings and technological growth, demand of energy is increasing exponentially. Limited sources of fossil fuels and unevenness in rain falls put the constraints on power generation. This situation forced the human beings to make use of energy optimally and recover the energy as and where possible. There are many industries namely sugar industries and thermal power plants where a large amount of heat energy is wasted to atmosphere via flue gases. About 15 % of generated heat is wasted through flue gases. There is wide scope to recover this energy by using heat pipe heat exchangers. This research work is mainly focused on developing a heat pipe heat exchanger which will recover reasonable amount of heat energy from the flue gases of the boilers. The heat pipe heat exchanger under consideration is relatively large in size as compared to heat pipe heat exchangers developed so far. The concept of Heat pipe and latent heat is chosen where in phase change of working fluid leads to the increase of heat transfer efficiency of the heat pipe. Accordingly the device has been developed to fit in the path of flue gases via to the chimney.