Add the sugar and water to a saucepan and cook it over medium heat for about 15 mins, until it turns into a brown color.
Place the caramel into your baking dish, sprinkle 2 tbsp shredded coconut over the caramel, set aside.
Add the evaporated milk, condensed milk, coconut milk, eggs, remaining shredded coconut, and vanilla extract into the blender and then place the blended mixture into the baking dish.
Place the baking dish in a bigger baking dish and add some boiling water to create a water bath this will help the flan cook evenly.
Bake in a preheated oven at 350 degrees for 1 hour and 20 minutes.
Refrigerate for a minimum of 4 hours before serving.
Garnish with shredded coconut and enjoy!