Preheat oven to 160°C/325°F.

Stir sugar and the water in a small saucepan over medium-low heat without boiling until sugar dissolves. Bring to the boil. Boil, without stirring, for 5 minutes, brushing down the side of the pan occasionally with a wet pastry brush to remove any undissolved sugar crystals, or until mixture turns a golden caramel. Immediately pour into a 20cm (8-inch) round cake pan; cool.

Meanwhile, stir coffee granules and extra boiling water in a small cup until coffee dissolves; cool. Place coffee mixture in a large bowl; whisk in egg yolks, then sweetened condensed milk and milk until smooth.

Pour milk mixture over caramel in cake pan. Place cake pan in a roasting pan; add enough boiling water to come one-third of the way up side of the cake pan.

Bake 45 minutes or until mixture is just set. Remove cake pan from water; cool to room temperature. Cover; refrigerate overnight.

Carefully run a knife around the inside of the pan to loosen custard from the side of the pan, then turn onto a plate with a rim. Serve topped with coconut and nuts.