Place ramekins in a large baking pan. Prepare a pot of boiling water for water bath. Place a heavy-bottomed pan with a lid on the stovetop. Pour the sugar and ¼ cup water in the pan, turn heat to medium and put the lid on. The sugar will begin to dissolve. Stir, and then return the lid to the pan. Check the sugar frequently to see when it turns from clear to a caramel color. This will take about 10–15 minutes—be patient. Once it has reached this stage you will need to work quickly to pour it into the ramekins because the caramelized sugar will set up quickly. Pour a bit into each ramekin and roll the caramel around the container, coating the bottom and sides. Place into the waiting baking pan.
Preheat oven to 350°.
In a large mixing bowl, mix the condensed milk with the eggs. In a separate bowl place the warm water, cocoa powder and espresso powder or Kahlua (if using). Whisk this mixture together until all lumps disappear. Add the egg mixture to this and whisk again. Add the vanilla. Strain this mixture and then pour into the waiting ramekins. Pour the boiling water into the baking pan halfway up the outside of the ramekins. Bake for 1 hour, until a toothpick inserted in the middle comes out clean. Allow to cool. Invert before serving. May be garnished with whipped cream.