01 - Pat shrimp dry with paper towels and season evenly with salt and black pepper.
02 - Set up three shallow bowls: place flour in the first, beat eggs with water in the second, and combine shredded coconut with panko breadcrumbs in the third.
03 - Dredge each shrimp in flour, shake off excess, dip into egg wash, then coat thoroughly with the coconut-panko mixture, pressing gently to adhere.
04 - Warm vegetable oil in a deep skillet or saucepan to 350°F (180°C).
05 - Fry shrimp in batches for 1 to 2 minutes per side until golden brown and crispy. Avoid overcrowding. Remove with a slotted spoon and drain on paper towels.
06 - Combine sweet chili sauce, lime juice, and cilantro if desired in a small bowl.
07 - Serve crispy coconut shrimp hot alongside the sweet chili dipping sauce.