To protect the global environment by using energy more efficiently, NTT is developing a phosphoric acid fuel cell (PBFC) energy system for telecommunication cogeneration systems. Fuel cells are used to provide electrical power to telecommunication equipment and the heat energy is used by absorption refrigerators to cool the telecommunication rooms throughout the year. We have recently developed a highly efficient system for recovering heat and water from the exhaust gases of a 200-kW (rated power) fuel cell, it is composed of a shell-and-tube type heat exchanger to recover high-temperature heat and a direct-contact cooler to recover the water efficiently and simply. The reformer and cathode exhaust gases from the fuel cell! are first supplied to the heat exchanger and then to the cooler. The high-temperature (85-60 degrees C) heat can be recovered, and the total efficiency including the heat recovered from the fuel-cell stack coolant can be improved by supplying the recovered heat to the dual-heat-input absorption refrigerator. The water needed for operating the fuel cell is also recovered from the exhaust-gases. We are currently applying this heat and water recovery system to the PC25C-type fuel cell, Maximum total efficiency including electrical power efficiency is estimated to be 78% at the rated power of 200 kW: composed of 17% heat recovery for the fuel-cell stack coolant 21% from the exhaust gas by improving the hear exchanger, and 40% from electrical conversion. Next, we plan to evaluate the usefulness of this heat recovery system for cooling telecommunication equipment.