Add all dipping sauce ingredients to a pot on a low temperature. Heat for 10 minutes, making sure you stir ingredients every few minutes.
In a large, heavy pot, heat 2-inches of the peanut oil to 325 degrees F.
Meanwhile, in a large bowl, whisk together the flour, salt, and baking powder. Add the water and whisk until smooth. Let the batter stand for 15 minutes.
In a wide, shallow bowl, toss the coconut and bread crumbs together.
Put the shrimp into the batter. Remove the shrimp, 1 at a time, and dredge in the coconut mixture, pressing to help the coconut adhere. Fry the shrimp in batches in the hot oil for 1 to 2 minutes or until brown. Use a slotted spoon to transfer the shrimp to a baking sheet lined with paper towels. Serve the shrimp with the dipping sauce.