Step 1

Preheat oven to 250°F. Stir together flour and 1 1/2 teaspoons of the salt in a shallow dish. Whisk together eggs and water in a separate shallow dish. Toss together panko, coconut, oil, and sugar in a third shallow dish until evenly coated.

Step 2

Working in 3 batches, toss shrimp in flour mixture; gently shake shrimp to remove excess, and dip in egg mixture. Dip in panko mixture, pressing lightly to adhere; gently shake shrimp to remove excess, and place in a bowl.

Step 3

Preheat a 5.3-quart air fryer to 375°F for 2 to 3 minutes. Generously coat fry basket with cooking spray. Working in 3 batches, add shrimp to air fryer basket in a single layer, and coat with cooking spray. Cook until shrimp are golden brown, crispy, and cooked through, 6 to 7 minutes, turning shrimp and coating with cooking spray halfway through cook time. Arrange cooked shrimp on a baking sheet lined with parchment paper, and transfer to preheated oven to keep warm.

Step 4

Sprinkle cooked shrimp evenly with remaining 1/2 teaspoon salt. Transfer to a serving platter. Serve with sweet chili sauce.