A heat exchange cooling system for an internal combustion engine co-generation plant, which allows exhaust recycled gas combustion while maintaining lower head temperatures to reduce thermal NOx emissions while delivering increased process/utility heat to a proximate co-generation client, is provided. The cooling system has two cooling loops with different flow rates: one through the engine and the second through exhaust manifolds, such that higher engine block flow resulting in cooler head temperatures is provided, while allowing higher temperature coolant to flow through exhaust exchangers, such that when the two coolant flows converge at a process/utility heat exchanger for heating co-generation client liquid, the combined flows substantially increase the transferred heat. In another embodiment, a separate intercooler circuit is used to cool the compressed intake charge containing the recycled gas prior to entry into the intake engine manifold to further reduce head temperatures and control thermal NOx emissions.