This study explores the relationship between urbanization, energy consumption, and gross capital formation, while accounting for the roles of foreign direct investment (FDI) on economic growth using annual time-frequency data from 1970 to 2024 in Spain. This study leverages time-frequency domain by capturing short- and long-time dynamics, such as the Wavelet Coherent analysis and Wavelet Granger Causality (WGC). The results show urbanization has a direct causal impact on foreign direct investment, which aligns with the urbanization-induced FDI growth. Similarly, economic growth also exhibits causation on capital formation, as proposed by GCF, reflecting Spain's reliance on energy use to sustain investment. The Wavelet Granger Causality approach revealed that another vital channel is the causality from energy consumption (EC) to gross capital formation (GCF), reflecting Spain's heavy reliance on energy use to sustain investment during periods of industrial expansion, particularly the construction boom of the 1990s and early 2000s, when energy-intensive sectors played a central role in driving capital accumulation. The results call for a shift from Spain's historical reliance on energy-intensive, construction-driven, and externally financed growth toward a model centered on renewable energy adoption, energy-efficient investment, sustainable urban transformation, and enhanced domestic investment capacity.