Studies on concrete dam breach are limited compared to earthen and other types of dams. With an increase in the construction of concrete dams, particularly in the developing world, it is imperative to have a better understanding of the dam breach phenomena and the identification of the most influential breach parameters. This study aims to contribute to this gap by taking the case of the concrete arch dam proposed for the 1200 MW Budhigandaki Hydropower Project located in central Nepal. This study carries special significance for Nepal, primarily because of the increasing number of under construction and proposed large dams for water resources development in the country. We carry out dam breach analysis of the Budhigandaki dam using HEC-RAS 2D model to calculate the flood discharge peaks, time to peak, water surface elevation and the extent of inundation for two scenarios (with and without probable maximum flood) to estimate the damage on four downstream settlements. We carry out sensitivity analysis of the breach parameters on the flood magnitudes and severity. Results show that all the study locations lie in the high flood hazard zone. Flood peaks can reach as high as 286,000 m3s− 1 to 511,000 m3s− 1 in the considered settlements. The time to peak ranges from 11.3 to 17 h after the breach at these locations. We estimate that if a breach should happen, it would most likely inundate around 150,000 buildings, impact nearly 672,000 lives and flood 3,500 km of road downstream. Furthermore, dam breach elevation is found to be the most sensitive parameter to downstream floods. Hence, rather than structural measures, it is recommended that non-structural measures are implemented for minimizing the impacts of flood disasters at the study locations. The findings could be a useful reference for future dam projects in Nepal and other areas with similar hydrological and topographical conditions.